IRS Notices

IRS CP23 Notice: Estimated Tax Payments Don't Match, Balance Due (2025)

By Angeline Balsitis, EA · Reviewed by Melissa Ly, EA · Updated July 9, 2025 · Editorial Standards

Why you got a CP23 notice

You filed your return and claimed a certain amount of estimated tax payments — the quarterly payments many self-employed people, retirees, and investors make during the year. When the IRS processed your return, the estimated payments it had on file didn't add up to what you claimed. So it adjusted your return to match its own records, and that adjustment left a balance due. The IRS explains the basics on its own page, Understanding your CP23 notice.

The mismatch usually comes from one of these:

• A payment was applied to the wrong tax year. A January quarterly payment, for example, can easily get credited to the wrong year.
• A quarterly payment was missed or made late — so you claimed four but only three posted.
• A payment landed under a spouse's Social Security number if you switched between joint and separate filing.
• You claimed an amount you meant to pay but didn't, or transposed a number when entering it.

One thing the CP23 is not: an audit. Nobody is questioning your income or deductions. This is the IRS reconciling the dollars you said you paid against the dollars it actually received.

What happens if you ignore it

A CP23 balance doesn't quietly disappear. If you don't pay or respond, the automated collection sequence takes over, and each notice carries more weight than the last:

1. CP23 — the adjustment and first bill. You are here. No enforcement yet.
2. CP501 / CP503 — reminder notices. Still bills, but the balance grows every month.
3. CP504 — Notice of Intent to Levy. The IRS can seize your state tax refund, and a federal tax lien becomes possible.
4. LT11 / Letter 1058 — Final Notice. After 30 days, the IRS can garnish wages and levy bank accounts. You still have formal appeal rights here — but fewer good choices than you have today.

The whole sequence is automated. IRS phone wait times are long and staffing is stretched, but the notices and liens are generated by computers that keep escalating whether or not a person ever reviews your file. That's why acting on the CP23 now — while it's just a bill — is the cheapest move you can make.

First: make sure the CP23 is actually right

Plenty of CP23 notices are wrong, or reflect a payment the IRS simply credited to the wrong place. Before you pay anything, spend ten minutes checking:

• Log into your IRS online account and look at the payment history. You'll see exactly which estimated payments posted, the dates, and which tax year each one was applied to.
• Match those against your own records — canceled checks, bank statements, or electronic confirmation numbers from IRS Direct Pay or EFTPS. Look closely at the tax year on each payment.
• Screen for scams: a real CP23 arrives by postal mail, never by email or text. Real IRS payments go only to the United States Treasury or through IRS.gov — anyone demanding gift cards, wire transfers, or a payment app is a criminal, not the IRS. Our guide on how to tell if an IRS letter is real walks through the tells.

If you find a payment the IRS didn't credit — say, a Q1 payment that landed on the prior year — that's almost always the cause, and it's fixable with proof.

If you disagree with the balance

If your records show you paid what you claimed, don't just pay the notice. Respond:

• Call the phone number printed in the top right corner of the notice, or respond in writing.
• Send proof — copies (never originals) of canceled checks, bank statements, or payment confirmations showing the date, amount, and tax year for each payment.
• Keep copies of everything you send, and note the date and who you spoke with.

If the issue is a payment applied to the wrong year, the IRS can usually move it to the correct year and wipe out the balance. Don't pay a bill you can document you already paid.

If the balance is correct but you can't pay

Sometimes the CP23 is right — you really did miss a quarterly payment. If so, the notice frames it as "pay now," but you have more options than that:

• Short-term payment plan — up to 180 extra days to pay in full, with no setup fee. Interest keeps running, but the notice sequence stops.
• Installment agreement — a monthly plan (details on the IRS payment plans page). For balances under $50,000, a streamlined installment agreement can usually be set up without detailed financial disclosure, over up to 72 months.
• First-time penalty abatement — if this is your first slip in years, the late-payment penalty may be removed entirely. See our first-time penalty abatement guide.
• Fix the underpayment penalty going forward — a missed quarterly often comes with an estimated-tax underpayment penalty. Our breakdown of the underpayment penalty for estimated taxes shows how it's calculated and how to avoid it next year.

How to respond, step by step

1. Read the notice carefully. Confirm the tax year and find the "pay by" date and the phone number in the top right corner.
2. Verify the payments against your IRS online account and your own bank records (see above).
3. If a payment is missing or misapplied: respond with proof by phone or in writing before the deadline, and keep copies.
4. If the balance is correct and you can pay: pay by the notice date at IRS.gov/payments to stop penalties and the notice sequence.
5. If it's correct and you can't pay in full: set up a short-term extension or installment agreement before the deadline. Even a plan you start today prevents everything that follows.
6. If the numbers are confusing or you owe more than $10,000: get a professional review first — the order you handle things in (proof, then penalties, then balance) changes what you end up paying.

CP23 notice questions, answered

This guide is general information, not tax or legal advice for your specific situation. Eligibility for IRS programs depends on individual facts and circumstances; no outcome is guaranteed.

Related: CP14 notice · how quarterly estimated taxes work · the order of IRS collection letters — or browse all guides.