You received a CP23 because the IRS found that the estimated tax payments listed on your filed return do not match the payments recorded in your IRS account. This commonly happens when a payment was applied to the wrong tax year, a quarterly payment was missed, a payment was entered incorrectly on the return, or there was an IRS processing delay. The IRS adjusted your account based on their records, which created a balance you now need to address.

The CP23 means the IRS has corrected your account based on their records of your estimated tax payments and determined that you owe additional tax. The notice includes a line-by-line comparison of what you reported versus what the IRS shows on file, the resulting balance due, and any interest or penalties that have begun accruing. A payment deadline is also included.

Step 1: Compare the estimated payments shown in the CP23 to your own records — check your tax return, bank statements, and any IRS payment confirmation emails.

Step 2: Log into your IRS Online Account at irs.gov to review your full payment history for the tax year in question.

Step 3: Check whether any payments are missing from the IRS's records or applied to a different tax year.

Step 4: If the IRS is correct, pay the balance or apply for an installment agreement before the deadline on the notice.

Step 5: If the IRS made an error, call the number on the notice with your documentation. Request a correction and ask for a reference number.

Step 6: Keep copies of everything — the notice, your documentation, and any IRS correspondence.

A CP23 is one of the more manageable IRS notices to resolve on your own. Start by reviewing your IRS Online Account to see how your estimated payments were posted. If a payment is missing or applied to the wrong tax year, you can call the IRS directly to request a reallocation — this is a common fix and usually requires just one call with supporting documentation. If you agree with the balance, paying online through irs.gov is the quickest resolution.

At Rockwater Tax, we regularly see CP23 notices caused by fourth-quarter estimated payments being applied to the new tax year instead of the prior year. If you made a January payment that was intended for the prior year, the IRS may have posted it to the wrong period. Don't assume you owe the balance — verify your payment history first. If you do owe, paying quickly is always cheaper than waiting.

Q: What if my estimated payments were made but the IRS doesn't show them on the CP23?

A: This often happens when a payment is applied to the wrong tax year. Log into your IRS Online Account to verify how your payments were posted. If an error exists, call the IRS with your bank statement or payment confirmation.

Q: How long do I have to respond to a CP23?

A: You should respond or pay by the date listed on the notice, typically within 60 days. The longer you wait, the more interest and penalties accumulate.

Q: Can I appeal the CP23 if I disagree?

A: Yes. You have the right to dispute the adjustment by responding in writing within 60 days of the notice date, explaining your position and attaching documentation of your payments.