The first move
If the notice involves withheld payroll tax, treat it as urgent. The trust fund recovery penalty makes owners and officers personally liable for the withheld portion.
What these letters have in common
Employment tax runs on its own calendar: deposits within days of each payroll, Form 941 quarterly, Form 940 annually, W-2s to Social Security by January 31. The IRS matches all of it. A CP207 says the deposit schedule on your 941 does not match the liability. A CP253 says W-2 totals do not match 941 totals. A CP161 is a balance due. CP136 and CP236 tell you your deposit frequency for next year.
The reason payroll notices are different is the trust fund: the income tax and FICA withheld from employees belong to the government from the moment they are withheld. Unpaid, the IRS can assess the trust fund recovery penalty (CP15B) against any responsible person, personally, and it survives the business's bankruptcy.
Business return corrections (CP101 to CP133, CP210, CP220) follow the same 60-day math error logic as individual returns.
What to gather
- The notice with the quarter or year it references
- Forms 941, 940, and W-3 for the period
- Deposit records with dates and amounts (EFTPS history)
- Payroll register for the period
- For W-2 mismatches: the W-3 and each W-2
How to write back
- First-time penalty abatement request letter: If you have filed and paid on time for the past three years, the IRS will usually remove a failure-to-file or failure-to-pay penalty once. This letter asks for it.
- CP14 response letter: A short letter that responds to a balance due notice: what you are paying, what you dispute, and what you are attaching.
- Payment plan request cover letter: A cover letter to accompany Form 9465 or an online payment plan confirmation, stating the balance, the proposed monthly amount, and the first payment date.
Notices in this family
| Notice | What it means |
|---|---|
| CP101 to CP108 | Business return corrected, balance due |
| CP111 to CP117 | Business return corrected, refund due |
| CP123 to CP138 | Business return corrected or credit adjusted |
| CP136 | Your federal tax deposit schedule for next year |
| CP145 | Business overpayment could not be applied as requested |
| CP147 | Business overpayment applied |
| CP160 to CP187 | Business balance due, reminders, and corrections |
| CP207 | Proposed deposit penalty; deposit schedule does not match liability |
| CP210 | Business return changed, balance due or refund |
| CP220 | Business return changed, balance due |
| CP225 | Business: payment applied to a different period |
| CP230 | Business: a change to a prior period affected this one |
| CP235 | Deposit penalty removed or reduced |
| CP236 | Your deposit frequency for the coming year |
| CP238 | Deposit penalty assessed |
| CP240 | W-2 totals reported to Social Security do not match your 941s; proposed changes |
| CP248 | Penalty for a deposit made by the wrong method |
| CP250A | Business filing requirement changed |
| CP250B | Business filing requirement changed |
| CP250C | Business filing requirement changed |
| CP251 | Business return figures do not match information returns |
| CP253 | W-2 and 941 totals do not match |
| CP260 | Business: a payment was reversed or removed from your account |
When to get help
Any unpaid trust fund balance, a CP15B, or a Letter 1153 (proposed trust fund penalty) requires professional help immediately. Responsible-person interviews happen fast.
Before you send anything
This is general information, not tax advice. Situations differ. Check with your tax advisor before you send anything. Nothing on this page creates a client relationship.