CP05 Notice
The CP05 is an IRS notice informing you that your tax return has been selected for review and that your refund is being held while the IRS verifies your income, withholding, tax credits, or business income. No action is typically required, but understanding the process is important.
Why Did You Receive This Notice?
The IRS issued a CP05 notice to inform you that your tax return is undergoing a standard review. This process is automated and does not imply any wrongdoing on your part. It is often triggered by factors such as large withholding credits, significant deductions compared to your income, or inconsistencies with third-party data received by the IRS.
What Does this Mean for You?
The CP05 means your refund is temporarily on hold while the IRS reviews your return. The notice typically advises you to wait 60 days before contacting the IRS. During this time the IRS is matching your return against W-2s, 1099s, and other information in their systems. Most CP05 reviews are resolved without any additional action from the taxpayer.
What Happens If You Ignore It?
Your Options
- Wait for the IRS to complete the review: Most CP05 reviews resolve on their own within 60 days.
- Contact the IRS after 60 days: If you have not heard back or received your refund after 60 days, call the number on the notice.
- Gather your supporting documents: Have your W-2s, 1099s, and other income documents ready in case the IRS requests them.
- Check your refund status: Use the Where's My Refund tool at irs.gov to monitor your refund status.
Step-By-Step: What To Do Next
- Read the CP05 notice and note the review period, typically 60 days.
- Do not file an amended return or contact the IRS during the review period unless specifically asked to.
- Check Where's My Refund at irs.gov every few days to monitor your refund status.
- Gather your income documents (W-2s, 1099s) and have them ready in case a follow-up notice arrives.
- If you have not received your refund or heard from the IRS after 60 days, call the number on the CP05.
Can You Handle this Yourself?
A CP05 is one of the easiest notices to manage, in most cases, you simply wait. The IRS is doing a routine verification and will release your refund when complete. If you have not heard back after 60 days, calling the IRS with your return information handy is straightforward.
Expert Insight From Rockwater Tax
At Rockwater Tax, we tell clients who receive a CP05 not to panic, it is often a routine check. However, it is a signal worth paying attention to. If your return included anything unusual, large withholding credits, significant business losses, or substantial deductions relative to your income, the CP05 may be the beginning of a more detailed review. Use the waiting period to gather your documentation so you are prepared if a follow-up notice arrives.
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FAQ
Q: How long does a CP05 review take?
A: Typically 60 days, though it can take longer in some cases.
Q: Do I need to do anything when I receive a CP05?
A: In most cases, no, simply wait for the review to complete. Do not file an amended return during this period.
Q: Will my refund be delayed?
A: Yes, your refund will not be issued until the review is complete.
Q: What if the IRS finds a problem during the review?
A: They will send a follow-up notice explaining any proposed changes or requesting additional information.
