IRS forms and letters, decoded

Tax talk is mostly numbers standing in for things. Taxpayers bring in forms they cannot tell apart, the IRS sends a letter with “CP” and three digits in the corner, and the preparer says “your MAGI is over the IRMAA line.” This page is the decoder; where a term has its own article here, the entry is a link.

Forms you receive

These arrive in January and February. Each is matched by computer against your return, which is why a forgotten 1099 produces a CP2000 eighteen months later.

• W-2. Wages and withholding; box 1 is taxable pay, box 2 tax paid.
• W-2G. Gambling wins over the reporting thresholds.
• 1099-NEC. Contractor pay; nothing withheld.
• 1099-MISC. Rents, prizes, royalties and settlements.
• 1099-K. Payouts from Venmo, PayPal, eBay and card processors.
• 1099-INT / 1099-DIV. Interest and dividends; box 1b is taxed at the lower qualified rate.
• 1099-B. Every brokerage sale, with cost basis if the broker has it.
• 1099-OID. Bond discount interest, taxed as it accrues.
• 1099-R. Money out of a retirement account, including rollovers; box 7 tells the story.
• 1099-G. Unemployment benefits and last year’s state refund.
• 1099-S. Real estate sold; report it even if the gain is excluded.
• 1099-C. Debt written off; income unless an exclusion applies.
• 982. Excludes canceled debt for bankruptcy or insolvency.
• 1099-Q. Money out of a 529 plan or Coverdell account.
• 1099-SA / 5498-SA. What came out of, and went into, an HSA.
• SSA-1099. Social Security benefits and the Medicare premiums withheld.
• 1098. Mortgage interest, points and mortgage insurance.
• 1098-T. Tuition billed and scholarships paid.
• 1098-E. Student loan interest; up to $2,500 deductible.
• 1095-A. Marketplace coverage and the advance premium credit.
• 5498. IRA contributions and year-end value; arrives in May.
• Schedule K-1. Your share of a partnership, S corporation or trust.

Forms that make up your return

The 1040 is two pages; everything else feeds a line on it. A simple return has three or four schedules; a complicated one can run to twenty.

• 1040. The return itself, two pages; the 1040-SR is the large-type version.
• Schedules 1, 2 and 3. Other income (1), other taxes (2), credits and payments (3).
• Schedule A. Itemized deductions.
• Schedule B. Payers of interest or dividends over $1,500.
• Schedule C. A sole proprietor’s income and expenses.
• Schedule D / 8949. Every capital asset sale, matched to the 1099-B.
• Schedule E. Rentals, royalties and K-1 income.
• Schedule F. The Schedule C for farms.
• Schedule SE. The 15.3% self-employment tax.
• Schedule 8812. The child tax credit.
• Schedule EIC. Qualifying children for the earned income credit.
• 2441. Child care so a parent can work.
• 8863. The American Opportunity and Lifetime Learning credits.
• 8889. HSA contributions, distributions and the deduction.
• 8962. Reconciles the Marketplace subsidy; the surprise bill.
• 8606. After-tax IRA money and Roth conversions; lose it and pay tax twice.
• 5329. The 10% early-withdrawal penalty, excess contributions, missed RMDs.
• 8880. The saver’s credit for lower-income retirement savers.
• 8995 / 8995-A. The 20% deduction for pass-through business income.
• 8829. The home office deduction, actual-expense method.
• 4562. Depreciation, Section 179 and bonus depreciation.
• 4797. Sale of a rental or business asset.
• 6252. A sale paid over several years, taxed as payments arrive.
• 8582. Limits passive losses and carries them forward.
• 8824. The 1031 exchange.
• 4684. Losses from a federally declared disaster.
• 8283. Donated property over $500.
• 6251. The alternative minimum tax.
• 8960. The 3.8% net investment income tax.
• 8959. The 0.9% additional Medicare tax above the same thresholds.
• 8615. The kiddie tax.
• Schedule H. The nanny tax, for household employees paid $2,800 or more.
• 2555. Excludes foreign wages earned abroad.
• 1116. Credit for income tax paid to another country.
• 8938. Foreign assets above the threshold; separate from the FBAR.
• FinCEN 114 (FBAR). Foreign accounts over $10,000; filed with Treasury.
• 8854. For anyone who gives up U.S. citizenship or a green card.
• 709. Gift tax return, filed by the giver for gifts over $19,000 to one person; almost never any tax.
• 706. Estate tax return, for estates over $15 million or portability.
• 1041. The income tax return of an estate or irrevocable trust.

Forms for dealing with the IRS

• W-4. Tells your employer how much to withhold.
• W-4P / W-4R. The W-4 for pensions and IRA distributions.
• W-9. Signed before a business pays you as a contractor.
• W-7. ITIN application, for someone without a Social Security number.
• SS-4. The EIN application; free, and online in ten minutes.
• 1040-ES. Quarterly payments when there is no withholding.
• 2210. Figures the underpayment penalty and claims the exceptions.
• 4868. Six more months to file, not to pay.
• 1040-X. Amends a filed return; three years to claim a refund.
• 8822. Change of address; see below.
• 8822-B. The same form for a business or an EIN.
• 9465. A monthly payment plan.
• 656 / 433-A (OIC). Offer in compromise: settling for less than you owe.
• 433-F. The shorter financial statement.
• 433-A. The full financial statement.
• 2848. Power of attorney; a representative speaks to the IRS for you.
• 8821. Lets a preparer see your IRS transcripts without representing you.
• 56. Tells the IRS you are the executor, trustee or guardian.
• 4506-T / 4506-C. A free transcript of what the IRS has on file.
• 843. Asks for a penalty to be removed.
• 8379. Injured spouse: recovers your share of a refund taken for a spouse’s debt.
• 8857. Innocent spouse: relief from tax caused by a spouse’s error or fraud.
• 14039. Identity theft affidavit, when someone else used your Social Security number.
• 15227. The paper way to get an IP PIN.
• 8332. Lets the other parent claim the child.
• 8888. Splits a refund among accounts.
• 12153. Requests a hearing after a levy or lien notice.
• CP2000. A notice, not a form; see below.

Form 8822: the one everyone forgets

The IRS writes to the address on your last return. Move, and every notice goes to the old house, including the one that starts a 90-day clock. A notice mailed to your “last known address” counts as delivered whether you saw it or not. Form 8822 closes the gap: one page, old address, new address, signatures. It is mailed to the IRS and takes four to six weeks. No e-filing, no fee.

IRS letters and notices

Every IRS letter has a number in the upper right corner: “CP” for computer notices, “Letter” for ones a person sends, “LT” for automated collection. Three rules: open it, do not ignore it, and show it to your preparer before you answer. Balance-due notices come in order: CP14, CP501, CP503, CP504, then LT11. The IRS never calls, texts or emails first; a call about an “arrest warrant” is a scam.

• CP14. The first bill for unpaid tax; pay within 21 days.
• CP501. First reminder; same balance, more interest.
• CP503. Second reminder; warns that a lien may be filed.
• CP504. The “urgent” notice; the IRS can take your state refund. Not yet final.
• LT11 / Letter 1058 / CP90. The real final notice: thirty days to request a hearing, then levy.
• CP91 / CP298. The LT11 for Social Security benefits (15% levy).
• Letter 3172. A lien has been filed; thirty days to request a hearing.
• CP523. Installment agreement default; 30 days to fix.
• CP71 / CP71C. Annual statement of what is owed.
• LT38. Collection notices resuming after the pandemic pause.
• LT16. Please call about an unpaid balance or unfiled return.
• LT26 / CP59 / CP63. Income documents and no return; CP63 holds a refund until you file.
• CP2566 / CP3219N. Substitute for return, with no deductions; ninety days to file the real one.
• CP49. Your refund paid an older IRS balance.
• Letter 3179C. Refund taken for child support, student loans or state tax.
• CP11. Math error, balance due; sixty days to ask for a reversal.
• CP12. Math error, refund changed; sixty days to dispute.
• CP21 / CP22. A change you asked for (21) or the IRS made (22).
• CP23. Estimated payments do not match IRS records.
• CP24. Same as CP23, but it produced a refund.
• Letter 12C. Something is missing, often a signature or Form 8962.
• CP2000. Unreported income matched to a W-2, 1099 or K-1; not an audit, 30 days to answer.
• CP2501. The step before a CP2000.
• CP3219A / Letter 3219. Notice of deficiency, the 90-day letter; Tax Court is the last resort, no extensions.
• Letter 525 / Letter 915. The 30-day letter: the audit result; agree or appeal.
• Letter 2205 / 2202. The opening letter of an audit.
• Letter 566 / CP75 / CP75A. A mail audit of one item; thirty days.
• CP79. A credit was denied; Form 8862 may be required next time.
• Letter 105C / 106C. Refund claim denied; two years to sue.
• CP05 / CP05A. Refund on hold while income is verified; CP05A asks for documents.
• Letter 5071C / 4883C / 5747C / 6330C. Verify your identity online, by phone or in person; the refund waits.
• CP01 / CP01A. CP01 closes an identity-theft case; CP01A brings the new IP PIN each winter.
• Letter 4464C. Withholding under review for 60 days; no action unless asked.
• CP53. The bank refused the direct deposit.
• CP09 / CP27. You may qualify for the earned income credit.
• CP08. Same, for the refundable child credit.
• CP60. A misapplied payment was removed; the balance is back.
• Letter 2645C. Interim letter: an answer in 60 days. Often arrives twice.
• Letter 2626C. The answer to your letter.
• Letter 3503C / 854C. Penalty abatement approved (3503C) or denied (854C).
• Letter 5157 / Form 656 correspondence. Correspondence on an offer in compromise.
• CP508C. Passport blocked for “seriously delinquent” debt; CP508R reverses it.
• CP40 / Letter 4228. Balance sent to a private collection agency; scammers imitate this one.
• CP161. The CP14 for a business return.
• Letter 1153. Trust fund penalty: payroll taxes assessed on you personally; sixty days to appeal.
• CP136 / CP138. Payroll deposit schedule, and a payroll overpayment.
• Letter 226-J. The ACA penalty for a large employer.
• CP575. Assigned your EIN; keep it forever.
• Notice 1444 / 1462. Informational: a payment sent to you (1444), or your rights (1462).

Business forms

• 1065. Partnership return; the partners pay the tax.
• 1120-S. S corporation return; due March 15.
• 1120. C corporation return; taxed at 21%.
• 2553. The S election; late elections allowed.
• 8832. Lets an LLC be taxed as a corporation.
• 7004. Six-month extension for business returns.
• 941 / 940. Quarterly payroll tax and annual federal unemployment.
• 1099-NEC (as payer). Due January 31 for contractors paid $2,000 or more.
• 8594. Splits the price when a business is sold.
• 3115. Change in accounting method.
• 4562. Depreciation and Section 179.
• 7203. S corporation shareholder basis.

Acronyms and section numbers

• AGI. Adjusted gross income; what phase-outs key off.
• MAGI. Modified AGI; defined differently for IRA, Medicare and Marketplace rules.
• AMT. Alternative minimum tax.
• NIIT. Net investment income tax, the 3.8% surtax.
• EITC / EIC. Earned income tax credit.
• CTC / ACTC. Child tax credit / additional (refundable) child tax credit.
• AOTC / LLC. American Opportunity and Lifetime Learning credits.
• QBI. Qualified business income; the 20% deduction.
• SSTB. Specified service business; loses the QBI deduction at higher incomes.
• HOH / MFJ / MFS / QSS. The filing statuses.
• HSA / FSA. Health savings account / flexible spending account.
• IRA / SEP / SIMPLE. Retirement accounts, including the self-employed versions.
• RMD. Required minimum distribution, starting at 73.
• QCD. Qualified charitable distribution; a gift from an IRA that counts toward the RMD.
• IRMAA. Medicare premium surcharge, based on the return from two years ago.
• QDRO. Court order splitting a retirement plan in divorce.
• DAF. Donor-advised fund.
• SALT. State and local tax deduction, capped at $40,000.
• PMI. Private mortgage insurance.
• OIC. Offer in compromise.
• CNC. Currently not collectible; hardship status.
• CSED. Collection statute expiration date; the ten-year limit.
• CDP. Collection due process; the hearing after a levy notice.
• POA. Power of attorney, Form 2848.
• FBAR. Foreign bank account report, FinCEN Form 114.
• FEIE. Foreign earned income exclusion, Form 2555.
• FTC. Foreign tax credit, Form 1116.
• IP PIN. Identity protection PIN; locks your Social Security number.
• ITIN / EIN / TIN / SSN. The taxpayer identification numbers.
• PTIN / EA / CPA. Preparer tax ID; enrolled agent; certified public accountant.
• NOL. Net operating loss.
• PAL. Passive activity loss.
• OID. Original issue discount.
• AFR. Applicable federal rate; minimum interest on a family loan.
• TCJA. Tax Cuts and Jobs Act of 2017.
• OBBBA. One Big Beautiful Bill Act of 2025.
• QOF. Qualified opportunity fund.
• QSBS. Qualified small business stock.
• ISO / NQSO / RSU / ESPP. The four kinds of equity pay, each taxed differently.
• 1031 / 121 / 179. Like-kind exchange, home-sale exclusion, equipment write-off.