What the notice means
IRM 3.14.1.3.2 lists the CP22A as “Adjustment Notice, Balance Due (not in TDA status prior to the adjustment).” Its sibling notices are the CP21A (balance due where the module was already in taxpayer delinquent account status), the CP21B (overpaid) and the CP21C (even balance). IRM 21.5.2.4.20 describes the purpose: “The IRS issues an adjustment notice when it takes action on a taxpayer's account.” The IRS CP22A page puts it simply: the IRS made changes to the return and the taxpayer owes because of them.
The notice explains the change in coded language. IRM 21.6.7.4.1: “The explanation is specified on the notice by use of one source code (SC) and one to three reason codes (RC).” Each code prints as a sentence on the notice.
Why the client got it
The source code tells you who started the change. IRM 21.6.7.4.1.2 assigns them roughly as follows:
| Source code | When the IRS uses it |
|---|---|
| SC 1 | The adjustment is exactly what the taxpayer requested on a claim or amended return |
| SC 2 | The taxpayer replied to a math error notice, or the adjustment came from an internally generated notice |
| SC 3 | New legislation changed the law too late for the forms or applied retroactively |
| SC 4 | The adjustment corrects an error by an IRS employee |
| SC 5 | Generated for carryback claims |
| SC 6 | The taxpayer made a math error on a claim or amended return |
| SC 7 | Offset reversals and related credit transactions |
The reason codes tell you which items changed. Exhibit 21.6.7-1 lists them; examples include filing status codes 001 to 005, 007 for wages, 008 for interest or dividends, 012 for business income and 018 for Schedule E income. If the codes do not match what the client expected, the transcript (TC 290 or 291 with the same date) and the amended return should explain the difference.
A common CP22A follows a Form 1040-X that reported more tax than originally shown: if the IRS processes it exactly as requested, the source code is SC 1 and the notice bills the additional tax. Others follow IRS-initiated corrections, such as an internally generated notice (SC 2) or the correction of an IRS employee error (SC 4).
Deadlines and what happens if they pass
The IRS page says: “If you agree with the changes we made, pay the amount you owe by the date printed on your notice.” Interest accrues if the balance is not paid in full by the date on the payment coupon, and a late payment penalty applies. There is no 60-day abatement right for an ordinary adjustment as there is for a math error assessment under IRC 6213(b); disagreement is handled by contacting the IRS, a claim, or reconsideration, depending on how the adjustment arose.
| If the client... | What follows |
|---|---|
| Pays by the notice date | Account closes; interest stops |
| Sets up a payment plan | IRS page: a payment plan, temporary collection delay or offer in compromise are options |
| Does nothing | Balance due notices continue (CP501, CP503, CP504) |
How to respond
- Read the source and reason codes printed on the notice. Match them to the table above and to Exhibit 21.6.7-1.
- Pull the account transcript for the period and find the adjustment transaction and date. See reading an account transcript and the transcript code decoder.
- Compare with what was filed. If the client filed a Form 1040-X, check whether the IRS processed it exactly as requested (SC 1) or changed it (SC 6 suggests the IRS found a math error on the amended return).
- If the client disagrees, call the toll-free number on the notice, as the IRS page instructs. The page suggests mentioning that the call concerns a CP22A with a balance due and having the notice and the return at hand.
- If another correction is needed, the IRS page says to file Form 1040-X.
- If the client agrees but cannot pay, set up a payment plan (see installment agreements). If circumstances beyond the client's control prevent payment, the IRS page says contacting the IRS by the payment due date may allow removal of the late payment penalty. See the failure to pay penalty.
- If repeated contacts fail, the IRS page points to the Taxpayer Advocate Service (see Form 911).
IRM 21.5.2.4.20 says no CP22A issues for a zero-amount adjustment that changes only non-tax data when the account balance is zero, but “a CP 21A or CP 22A is issued if the account was in balance due status before the adjustment was input.” A notice with no change in tax can still arrive on an account that already owed.
What the IRS does next
If the balance is unpaid, the account follows the normal collection notice stream. If the client calls and the IRS agrees the adjustment was wrong, Accounts Management reverses or corrects it, usually with another adjustment notice. If the disagreement concerns an assessment the client never had a chance to dispute, a later CDP hearing may be available once a levy notice issues. For adjustments based on an examination, see audit reconsideration.
Related notices
- CP11: math error on the original return with a balance due.
- CP14: balance due on the return as filed.
- CP2000: an underreporter proposal, which can prompt an amended return and a later CP22A.
Questions practitioners ask
Why did we get a CP22A instead of a CP21A?
IRM 3.14.1.3.2: the CP22A is used when the module was not in taxpayer delinquent account status before the adjustment; the CP21A is used when it was.
The client's amended return showed more tax. Is the CP22A a penalty notice?
No. It bills the additional tax from the processed amendment, plus interest and any late payment penalty the IRS computes. Penalty relief can be requested separately.
How do we read the codes on the notice?
The source code (IRM 21.6.7.4.1.2) explains why the adjustment was made; the reason codes (Exhibit 21.6.7-1) identify the items changed. The notice prints the corresponding text.
Can we use the 60-day math error abatement rule?
Not for an ordinary adjustment. IRC 6213(b) applies to math error assessments. If the CP22A reflects a math error on an amended return (SC 6), ask Accounts Management how it was treated.