Underpaid Tax – CP 161

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CP 161 – Don’t trust their records.  Obtain your wages and income transcripts and see exactly what they are doing.  If you agree to incorrect adjustments because the amount is small, they may keep sending adjustments.  I’ve seen it happen!  Contact Form

Underpaid Tax – IRS Notice CP 161

The CP 161 notice is not the same as the math error notice. This notice will display the amount of underpaid tax, as per the records of the IRS. In this notice, you will find information about the tax that you have reported; the amount of payment that the Service or IRS has applied and it also shows the amount that is pending. Many people confuse the CP 161 notice to be a math error notice but this is not the math error notice.

The CP 161 will display the amount that is due as per the records of the IRS or the Internal Revenue Service. In the middle part of this notice, you will find information on the underpaid tax amount, the credits applied by the IRS and the balance due.

As soon as you receive the CP 161 notice, you should check the payments list that the Service has applied. Most of the time, the reason for the balance due may be because of a misapplied payment. In case your records agree with the amount shown in this notice, then you should make the payment for the balance due as soon as possible. Many people fail to pay the amount that is due before the deadline and in such a situation, interest and penalties will be charged.

Basically, there will be three sections in the CP 161 notice:

  • Header Section: This section will include your Social Security Number, Notice Number, the IRS contact number and the notice date.
  • Body Section: This section will include tables that will display the difference between the total amount claimed according to the tax return and the records of payments of the IRS. You will also find the amount of balance that is due in this part of the CP 161 notice. In case the amount as per your records is similar to the amount as per the records of the IRS, you will have to make the payment for the balance due.
  • Response Section: At the end or bottom of the CP 161, you may find a coupon to include your payment.

If the records that you have do not agree with the records shown by the IRS, then you should get in touch with them regarding the underpaid tax notice as soon as possible.

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