A CP05 notice from the IRS typically indicates a review of income, withholding, or tax credits that takes up to 60 days to complete. While the IRS advises waiting this period, some reviews can take 45 to 180 days, depending on the complexity of the verification needed.
IRS Refund Delays: Understanding 60-Day Review Process Unclear refund status and limited IRS communication cause taxpayer frustration. When the IRS places a refund under a 60-day review, it may delay processing to verify information. This review typically lasts up to 60 days from the notice date.
The CP05 notice is mailed to taxpayers to notify them that the IRS needs more time to verify your income, income tax withholding, tax credits and/or business income.
they will take 60 days just to tell you they need more information which is more than likely the 3 most recent paystubs from that year and then take an additional 60 days to verify that. that's 4 months in total or just about.
You don't need to take any action. Please do not call us until 60 days after the notice date and only if you haven't received your refund or heard from us by then.
If you filed the tax return
We could take up to 60 days to complete this review. Please don't contact us prior to 60 days from the date of this notice since we won't be able to provide you any additional information. You can check your refund status at www.irs.gov/refunds or the IRS2Go mobile app for smart phones.
One-time forgiveness, officially known as First-Time Penalty Abatement (FTA), is an IRS program that allows qualified taxpayers to have certain penalties removed from their tax accounts.
This review is not an audit or inquiry, but frequently just a way to review your tax return information against other third-party tax reporting records. Generally, no immediate action is required upon the receipt of a CP05.
A request for expedited processing must be made in writing and must fully explain the compelling reason. Granting expedited processing is at the discretion of the IRS.
If the IRS is reviewing your return, it may have questions about your wages and withholding, or credits or expenses shown on your tax return. The review process could take anywhere from 45 to 180 days, depending on the number and types of issues the IRS is reviewing.
Why you received IRS Notice CP05. The IRS selected your return for review to verify one or more items on the return. The IRS is holding your refund pending the outcome of the review.
Your refund
It may take up to 9 weeks to process your return after you verify it.
To avoid receiving a CP05 notice, ensure that your tax return is accurate. Double-check your information, provide all necessary documentation, and stay informed about inflation adjustments to avoid any mistakes. If you're claiming child tax credits, the CP05 notice may require you to verify your claims.
The IRS doesn't have a strict maximum time limit for issuing refunds, but generally processes e-filed returns with direct deposit within 21 days, while paper returns take 6 weeks or more, with longer waits for those claiming certain credits (EITC/ACTC) or if errors occur. If the IRS holds your refund for more than 45 days past the tax deadline (or filing date if late), they owe you interest, but significant delays (months) can happen for complex issues or extra reviews, sometimes requiring a mailed notice.
Get your refund faster
Legal answer: Three years
Technically, except in cases of fraud or a back tax return, the IRS has three years from the date you filed your return (or April 15, whichever is later) to charge you (or, “assess”) additional taxes. This three-year timeframe is called the assessment statute of limitations.
The IRS has no maximum time limit when it comes to processing tax refunds, but after 45 days, it is required to pay interest on your refund. In most cases, you can expect the IRS to issue your tax refund within 21 days of filing your tax return.
Usually, it takes 4-5 weeks for the refund to be credited to the account of the taxpayer. However, if refund is not received during this duration, the taxpayer must check for intimation regarding discrepancies in ITR; check email for any notification from the IT department regarding the refund.
With Notice CP05 they don't request anything of you until they have finished their review of your return. Notice CP05A asks you to supply the IRS with documentation to support certain items on your return.
If it still says "processing" that's actually a good thing. If your tax return ever is chosen for further review, or an actual audit, then the website should indicate that, and also let you know to expect an IRS notice or letter by mail. (You haven't observed a message like that, have you?)
The IRS $600 rule refers to a change in reporting requirements for third-party payment apps (like Venmo, PayPal) for taxable income from goods and services, where platforms must send a Form 1099-K if you receive over $600 in a year, intended to capture gig economy/side hustle income, though delays and phased implementation have adjusted the timeline, with current rules for 2024 using a higher threshold ($5,000) before fully phasing to $600 for future years, but remember all taxable income, regardless of form, must always be reported.
The IRS 7-year rule primarily applies to keeping records for claiming a deduction for bad debts or losses from worthless securities, allowing a longer period to file for a credit or refund, but it's not a universal audit limit; it's often a recommended safe buffer for general record-keeping, with the standard IRS audit period usually being 3 years, extending to 6 years for substantial income omission (over 25%) or foreign income issues, and indefinitely for fraud.