What was changed
The notice lists the specific change. Common CP12 triggers: EIC calculation, Child Tax Credit, education credits, dependent issues, or transcription errors. The IRS usually gets the math right, but not always.
Why the IRS can do this without an audit
Math-error authority lets the IRS fix arithmetic mistakes, transposed numbers, and credits claimed without a required SSN or schedule, immediately and without examination. It's efficient when the error is real. The tradeoff is that the same authority sometimes removes credits people were actually entitled to, most often when a dependent's SSN was mistyped or a schedule didn't transmit with an e-filed return.
If you disagree
You have 60 days to contest the change. Respond in writing with documentation. If the 60 days pass without contest, the change becomes final. A timely request has real teeth: the IRS must reverse the math-error assessment and, if it still believes you're wrong, pursue the issue through regular deficiency procedures with full appeal rights. Miss the window and reclaiming the credit means filing an amended return and waiting.
Before you accept the new number
Compare the notice line by line against your copy of the return. If the IRS removed a credit, check the reason: a corrected SSN or a missing form can be fixed, and the credit restored. If your refund went up, verify that too; an IRS error in your favor gets clawed back later with interest, and it's cheaper to straighten out now.
Common questions
- Can I cash the refund check if I disagree?
- Yes, cashing it doesn't waive your right to dispute. But respond within 60 days to preserve the argument.
- Is a CP12 an audit?
- No. It's a correction made during return processing under math-error authority. Nothing else on your return is under examination.
- The IRS removed a credit for a dependent I'm entitled to. Now what?
- Usually the cause is an SSN or name mismatch with Social Security records. Respond within the 60 days with the correct information and documentation; the credit gets restored without an amended return.
- What if my refund went up instead of down?
- Verify the IRS is right before spending the difference. If their change is wrong, the money will be reclaimed later with interest.
Related
IRS Notice & Letter Response
Responding to IRS notices (CP2000, CP14, CP504, LT11 and others) within the deadline, with proper documentation. You get a copy of the entire response packet.
Amended Tax Returns
File Form 1040-X to correct a prior year return within the three-year window. We handle federal and state amendments for missed income, deductions, or credits.
Responding to an IRS CP2000 Notice
A CP2000 is an automated IRS underreporter inquiry: third-party income doesn't match your return. You have 30 days to respond. How to agree or dispute.
Related tax topics
Responding to an IRS Notice of Deficiency
The Notice of Deficiency (90-day letter) is your window to petition Tax Court without paying first. Pay, petition within 90 days, or the tax becomes final.
Responding to an IRS Letter 525
Letter 525 is the 30-day letter after an audit. A written protest within 30 days preserves your right to IRS Appeals, where most audit disputes settle.
IRS Audit Reconsideration
Audit reconsideration reopens a default audit assessment when you have new documentation or never received the original notice. What Form 12661 requires.
Offer in Compromise
An Offer in Compromise settles IRS debt for less than the full amount. Eligibility is narrow and documentation is heavy. KG Tax prepares and submits Form 656.