CP44 Notice: The IRS Is Holding Your Refund While It Checks for Other Tax Debts

What a CP44 says

The IRS CP44 page puts it in two sentences: “There’s a delay sending your refund. We’re checking to see if you owe other federal taxes.”

The page explains why: the IRS may apply your refund to a balance on another account for which you are liable. The law allows that. IRC §6402(a) says the IRS “may credit the amount of such overpayment, including any interest allowed thereon, against any liability in respect of an internal revenue tax on the part of the person who made the overpayment.”

So the question the IRS is answering is narrow. Do you owe another federal tax, on another account or for another period, that this refund should pay first?

What to do, and how long to wait

Nothing. The CP44 page says, “You don’t need to do anything.” It also says, “Within 8 weeks, we’ll either” send your refund, including any applicable interest, or mail you another notice that explains how the IRS applied your refund to other federal taxes you owe.

Keep the notice. If a second notice says the IRS applied your refund to a debt you do not recognize, that notice is the one to answer. Our guide to refund offsets explains how to tell which kind of debt took a refund and whom to call about it.

What happens inside the IRS

IRM 5.19.10.3.12 describes the process. When a TC 130 posts to your account, it freezes refunds. When a refund at or above a dollar amount the IRM does not publish comes due, the freeze holds it. The IRS mails you a notice titled “Delay in Processing Your Refund,” and at the same time opens a case at its Atlanta collection office for an individual account.

An employee then looks for a balance. If there is none, the employee releases the freeze and the refund goes out. If the balance falls below another amount the IRM does not publish, the employee releases the refund instead of moving it. If the balance is larger, the employee moves the credit to the tax period whose collection deadline ends first and sends Letter 678-C, Refund/Overpayment Applied Elsewhere. Our CSED estimator explains how that collection deadline works.

The IRM adds that no dollar limit caps the refund the IRS can release under this process.

What people mistake a CP44 for

Many people read it as a bill. It is not one. The CP44 asks you for nothing, and it does not say you owe. It says the IRS is checking.

Others take it for an offset for a student loan, child support or a state debt. The CP44 page talks only about other federal taxes. A different program handles non-tax debts, and our refund offset guide covers it.

Some people think they lost the whole refund. If the IRS finds a smaller debt, it keeps only enough to pay it. The CP44 page says, “We’ll send you any remaining amount, including any applicable interest.”

For tax professionals

The TC 130 is the transcript marker to look for. IRM 5.19.10.3.12 closes the case without moving the credit in several situations, including an open offer in compromise, a bankruptcy freeze, or an open criminal investigation. In those situations the IRM tells staff to close the CP44 case and move nothing.

When the employee moves the credit, the IRM tells staff to use it on the period with the earliest collection statute expiration date, and not to release the freeze until the client has paid every balance. That keeps the freeze on the account while any balance remains.

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