A CP25 notice means the IRS corrected your return because the estimated tax payments you listed didn't match the payments posted to your account. After the correction, you don't owe anything more and you aren't due a refund. Your account for that year shows a zero balance. If you agree, you don't need to respond. The notice matters mainly if you expected a refund, or if you think one of your payments is missing.
Why you got a CP25
The IRS checks the estimated payments on your return against the payments credited to your account for that tax year. When the amounts differ, it corrects the return. If the correction happens to land exactly at zero, with no refund and no balance due, you get a CP25.
A common example: your return claimed a refund, but part of the estimated payments you listed were never received or were applied to another year. Once the IRS removes them, the refund disappears, but you don't owe anything either.
Typical causes include:
- A typo on the estimated tax line of the return.
- A payment posted to the wrong tax year, or to a spouse's separate account.
- A smaller credit from the prior year than you expected.
- A payment that was returned by your bank.
How a CP25 compares with the related notices:
| Notice | Result of the estimated payment correction |
|---|---|
| CP23 | You now owe a balance |
| CP24 | You may have a credit or refund |
| CP25 | Zero balance: no refund, nothing owed |
What the CP25 says
Look for:
- The estimated payments the IRS credited for the year, with dates and amounts.
- Any prior-year overpayment applied to the year.
- "What we changed on your return."
- The zero balance after the change.
- A date to contact the IRS if you disagree, and the toll-free number under "Where to find more information."
What to do
- Compare each payment on the notice with your records, such as bank statements, payment confirmations and canceled checks.
- Check the prior-year credit against last year's return.
- Look at your IRS Online Account to see the payments posted to each year. A missing payment may be sitting in a different year.
- If you agree, you're done. Correct your own copy of the return, but don't send it to the IRS.
- If you disagree, call the number on the notice before the date shown.
If you agree
No response is required. Keep the notice with your tax records for that year.
It is still worth a few minutes of checking. If you expected a refund and the notice wiped it out, the money you thought you paid is either missing, sitting in a different tax year, or was never sent. Finding it now is much easier than trying to trace a payment years later, when bank records may be harder to get.
If you find a missing or misapplied payment
Call the number in the "Where to find more information" section. Have your return and documentation (such as canceled checks, bank statements or an amended return) ready. The IRS will discuss the issue and give you instructions. If it finds and moves your payment, you may end up with the refund you originally expected.
If you need another correction
To fix a different error on the return, file Form 1040-X. See our amended return guide.
If the missing payment turns up in the following year, that year may now show a larger credit than you expected. Check both years in your Online Account so a single misapplied payment doesn't cause two problems.
What happens if you ignore it
If the notice is correct, ignoring it is fine; there is nothing to pay and no refund coming. If you believe a payment is missing and you don't call by the date on the notice, you risk losing track of money you paid, and you may lose some formal rights to dispute the change. The IRS will still generally consider documents you send later. Older issues can sometimes be reopened through audit reconsideration.
Is this notice real?
CP25 is a standard IRS notice sent by mail, and it doesn't ask for money. If anyone contacts you about a CP25 asking for payment or bank details, treat it as a red flag. Verify by checking your IRS Online Account or calling the IRS at a number listed on irs.gov. See how to spot IRS scams.
Frequently asked questions
Do I owe anything?
No. A CP25 says your balance for the year is zero after the correction.
Why didn't I get the refund I claimed?
Most likely because some estimated payments you listed weren't found on your account for that year. Compare the notice's payment list with your records and call if one is missing.
How do I adjust my estimated payments for this year?
Use Form 1040-ES; Publication 505 explains the rules. Our self-employment tax calculator can help freelancers plan quarterly payments.
Can a CP25 lead to penalties?
A CP25 itself shows a zero balance, so there is nothing to pay for that year as a result of the change. If you paid too little during the year, though, an estimated tax penalty can still apply. The IRS explains that penalty in Tax Topic 306 and Form 2210.
How can I avoid this next time?
Before you file, check the estimated payments posted to the year in your Online Account and use those exact amounts on your return.
Sources
IRSV.com is an independent guide and is not affiliated with the IRS. This page is general information, not tax or legal advice. Rules change; confirm details on IRS.gov or with a tax professional. Found an error? Tell us.