CP21C Notice: The IRS Changed Your Return and Your Balance Is Now Zero

What a CP21C says

The IRS CP21C page says, “we made the changes you requested to your tax return for the tax year on the notice.” It adds, “You do not owe any amount and aren’t due a refund.”

IRM 3.14.1.3.2 calls this notice an “Adjustment Notice, Even Balance.” The change may have moved numbers on the return, but it left nothing to pay and nothing to send back.

IRM 21.6.7.4.1 says the notice carries a source code and one to three reason codes that explain the adjustment. Read that part of your notice closely. It tells you what the IRS changed and why.

What to do with it

Pull out your copy of the return. Compare it with the notice, and correct your copy. The IRS page tells you to do this.

If you disagree with the change, contact the IRS at the number shown in the “What you need to know” section of your notice. Have your return and the notice in front of you when you call.

The IRS page prints no reply date for this notice. That does not mean you should wait. Call while you still have the records fresh.

If you never asked for a change

Some people get a CP21C and do not remember asking for anything. The IRS page answers that: “Call us at the number shown in the ‘What you need to know’ section of your notice.” Ask what the IRS received that started the change.

IRM 3.14.1.6.18.1.2 lists the cause of a CP 21C as “A DP tax adjustment or a penalty recomputation.” DP stands for Data Processing. Ask which one yours was.

If you think someone else filed it, the IRS page gives the same number and points to its Identity Theft Central page.

If you need another change

The CP21C closes one change. It does not stop you from making another. The IRS page says, “You’ll need to file Form 1040-X, Amended U.S. Individual Income Tax Return.”

If you contact the IRS several times and get no answer, the page says to call the Taxpayer Advocate at 877-777-4778, or 800-829-4059 for TTY/TDD.

What people mistake a CP21C for

Many people expect money. A CP21C looks like a CP21B, which reports a change that leaves a refund. The CP21C leaves none. If you hoped for a refund from your change, call the number on the notice and ask why the balance came out to zero.

Others expect a bill. A CP21A reports a change that leaves a balance due. The CP21C does not.

Some people think it means the IRS audited them. The IRS page describes a change you requested, not an audit.

It also differs from a math error notice. There, the IRS changes the return on its own when it finds an error.

For tax professionals

“Zero” carries a small tolerance. IRM 3.14.1.6.18.1.2 sets the CP 21C trigger at an overpayment of less than $1 or a balance due of less than $5. So a client can hold a CP21C and still show a few dollars on the transcript.

No notice does not prove no adjustment. IRM 21.6.7.4.1 says the IRS issues none of these notices when the account sits at zero or a credit and a TC 290 .00 changes no tax, unless the account was in balance due status before the adjustment.

Pull the account transcript to match the notice to the posted transaction. Our transcript analyzer reads the codes, and the source and reason codes on the notice explain the change.

Common Questions