CP60 Notice
The CP60 is an IRS notice informing you that a payment that was previously applied to your tax account has been reversed or removed due to an error. As a result, you now have a balance due for the amount of the removed payment.
Why Did You Receive This Notice?
You received a CP60 because the IRS removed a payment from your account that had been incorrectly applied — either it was posted to your account in error, the payment was returned by your bank, or there was a processing mistake. The payment removal created a new balance on your account that the IRS is now asking you to address.
What Does this Mean for You?
The CP60 means your tax account balance has changed because a payment was reversed. You now owe the amount that was removed, plus any interest that has accrued since the original payment date. The notice includes the amount removed, the reason for the removal, and your new balance due.
What Happens If You Ignore It?
Your Options
- Review the reversal: Before paying, confirm the payment removal was valid. Sometimes the IRS reverses payments in error. Check your bank records to confirm whether the original payment actually cleared.
- Pay the balance: If the reversal was correct (e.g., the payment bounced), pay the balance by the deadline to stop interest and penalties.
- Dispute the reversal: If you believe the IRS removed a valid payment in error, call the number on the notice with your bank statement showing the payment was processed and ask the IRS to correct the mistake.
Step-By-Step: What To Do Next
Step 1: Read the CP60 and note the payment amount that was removed and the stated reason.
Step 2: Check your bank account or records to determine whether the original payment actually cleared.
Step 3: If the payment cleared and the reversal was an IRS error, call the IRS with your bank statement as proof.
Step 4: If the payment bounced or was not made, pay the balance by the due date on the notice.
Step 5: Set up an installment agreement if you cannot pay in full.
Can You Handle this Yourself?
Start by checking your bank records to determine whether the original payment actually cleared your account. If it did, the reversal is an IRS error and a single call with your documentation can usually resolve it. If the payment bounced or wasn't made, paying the balance promptly online at irs.gov is the fastest fix.
Expert Insight From Rockwater Tax
At Rockwater Tax, we treat CP60 notices as a prompt to investigate before paying. We've seen cases where the IRS reversed legitimate payments due to processing errors — clients who simply paid again ended up with duplicate payments on their account and had to request refunds. Always verify your bank records first.
Need a hand?
FAQ
Q: Why would the IRS remove a payment I already made?
A: Common reasons include the payment being applied to the wrong account, the bank returning the payment (NSF), or an IRS processing error that incorrectly matched the payment to another taxpayer's account.
Q: What if my bank shows the payment cleared but the IRS reversed it?
A: Call the IRS with your bank statement as proof. This is a known error scenario and the IRS can reinstate the payment once it's verified.
Q: How quickly do I need to respond to a CP60?
A: Pay or contact the IRS by the deadline on the notice to avoid additional penalties and interest.
