CP108 Notice: The IRS Could Not Tell Where to Apply Your Payment

What CP108 means

The IRS page for this notice says: “We received a payment from you, but we couldn’t determine the correct form or tax year to apply it to.” The form is the kind of return the payment belongs to, such as a quarterly payroll return, and the tax year or quarter is the period it covers.

CP108 reports a choice the IRS made about your payment, so you can confirm it or correct it.

If the IRS applied the payment correctly

The IRS page is direct: “If we applied the payment correctly, there is nothing you need to do. You don’t need to contact us.”

To decide, compare the form and period on the notice with your own record of the payment, such as your bank statement, the payment confirmation, or the voucher you sent. Keep the notice with your tax records either way.

If the IRS applied it to the wrong form or tax year

Tell the IRS where the payment belongs. The IRS page gives two ways: call the phone number on your notice, or fill out Form 15108, Correction to Your Federal Tax Deposit, the IRS form for fixing where a tax deposit went, and send it to the address on the notice.

Either way, have the notice in hand, along with the payment date, the amount and the form and period you meant to pay. For any other correction to your account, the IRS page says to file an amended return.

What people mistake CP108 for

Some people read CP108 as a sign the IRS lost their payment. It did not: the notice says the IRS received it. Others think they must call the IRS no matter what. The IRS page says you need not contact the IRS if it applied the payment correctly.

And some treat CP108 as a balance-due notice, like CP14. CP108 reports where a payment went. If you still owe tax once the payment sits in the right place, see the questions below.

For practitioners: what to check first

Pull the account transcripts for both the period where the IRS posted the payment and the period the client intended; the transcript analyzer can help you read them. A payment on the wrong module can leave the intended period showing a balance due while the other period shows a credit.

Then match the payment record: amount, date, the form and period entered on the payment or voucher, and the taxpayer identification number. Correct the posting by phone or on Form 15108 at the notice address, as the IRS page directs.

Last, separate a misapplied payment from a return error. The IRS page routes any other correction to the account through an amended return, not through Form 15108.

Common Questions