How to understand your CP60 Notice (The IRS misapplied a tax payment to your account)

[@theopinions47]

By law they can charge interest and penalties and if you fight it the interest will continue to accrue and if you set up a payment plan you will be charged for setting that up. The best thing to do is pay it or pay what you can while still fighting it. Fighting it and not setting up a payment is not good. Trust me if they are sending you this notice more than likely you owe it.

[@muchomacho9961]

We just got this letter referencing misapplied payment from 2015 for $89. They’ve also added over $6,500 in interest!! We’ve paid what they’ve asked and why should we be in the hook for over 6,500? Is this normal?

[@teachmepersonalfinance]

I'm not sure that I've seen a situation like this before. You should probably call the IRS to see what penalties they've applied, and to learn more about your account. Here are some questions that I would want to know: 1. How much of this is penalties? Generally, with unpaid taxes, there is a combination of interest and penalties added to the outstanding balance. While you can't really remove interest, you can request a penalty abatement with IRS Form 843 (see below), which I would recommend filing: IRS Form 843, Claim for Refund and Request for Abatement Article: www.teachmepersonalfinance.com/irs-form-843-instructions/ Video: kzbin.info/www/bejne/mJaqqJp4iJaMj6s 2. What is your current account situation? You can log into your IRS online account and pull up your balance for all tax years. Or you can file IRS Form 4506-T to request a tax transcript (see below): IRS Form 4506-T, Request for Transcript of Tax Return Article: www.teachmepersonalfinance.com/irs-form-4506-t-instructions/ Video: kzbin.info/www/bejne/qavYZ5KZfZqEprs 3. What correspondence has the IRS sent you in the past? You might be able to find this in your online tax account, or you can call the IRS to figure this out. You might also be able to request assistance from the taxpayer advocate service. You can do this online, or by filing IRS Form 911 (see below): IRS Form 911, Request for Taxpayer Advocate Service Assistance Article: www.teachmepersonalfinance.com/irs-form-911-instructions/ Video: kzbin.info/www/bejne/e3abYZ2pbKmKjJI

[@muchomacho9961]

@@teachmepersonalfinance ok will do, thank you. And the CP60 form I got says they misapplied $89 we paid and now we owe that, plus over $6,500 in interest. Everything I’m seeing is that they don’t/can’t remove interest and that’s an insane number. We’ve always paid what we were supposed to pay. And they say it’s due middle of October. I’ll call, but my layman’s logic is that we made no mistake. They did. We’ve always paid them what they said to pay them.