US taxpayers must file a tax return with the IRS every year in April (or October if you request an extension). When you fail to file your return as required, the IRS will send several notices to remind you to file. One of these letters is the CP518 notice or Final Reminder for Missing and Unfiled Taxes.
This post discusses everything you need to know about an IRS CP518 and what to do when you receive one.
What Is a CP518 Notice and Why Did I Receive It?
An IRS CP518 notice is the final reminder that the IRS sends to taxpayers who have not filed their taxes. You receive this notice when you have ignored previous requests to submit your unfiled return. These prior notices can include the CP59 notice.
If you do not respond to the final notice, the IRS can file a tax return on your behalf, and you may miss out on certain credits and deductions or lose your refund.
What Do I Do When I Receive a CP518 Notice?
CP518 notices contain instructions for the steps to take based on your specific unfiled taxes situation.
If you need to file, follow these steps:
- File your tax return as soon as possible. This involves completing and signing tax returns and schedules for the tax years requested. In many cases you may be able to e-file: https://irs.gov/filing/e-file-options.
- Include all payments for any taxes due or pay online using the IRS payment portal: https://irs.gov/payments. If you cannot pay all your taxes in full, pay whatever amount you can now and apply for an IRS payment plan or other tax relief for the remaining balance.
- Provide an explanation as to why you are filing late.
What If I Receive a CP518 and Don’t Need to File a Return?
If you do not think you need to file a tax return, do the following:
- Complete IRS Form 15103 (Form 1040 Return Delinquency).
- Provide a detailed explanation as to why you do not have to file a return.
- Sign and mail the 15103 form to the IRS.
What If I Receive a CP518 and Already Filed My Return?
Sometimes you may receive a CP518 notice even after filing your tax return. The following are the steps to take if this situation applies to you:
- If you submitted your return more than eight weeks ago, complete Form 15103 and enclose a copy of your tax return as proof. Ensure the copy you are sending is signed and dated.
- Nothing is required if you filed your return within the last eight weeks. It means the IRS may have sent the notice before receiving your return. However, as a precaution, consider calling them to check the status of your tax return.
How Much Time Do I Have to Respond to My CP518 Notice?
Each CP518 notice typically contains a time limit to respond to the IRS. If you require more time to file, call the IRS at the phone number listed on the notice and request an extension. Since CP518 is a final notice, you will want to respond ASAP before the IRS files a substitute return on your behalf.
What Happens If I Don’t Respond to My CP518 Notice?
If you ignore the CP518 notice, the IRS will file a substitute return to determine the taxes you owe, plus penalties and interest. The IRS uses financial information from your employer, banks, and other sources to prepare a return on your behalf.
If you wait over three years from the original filing deadline to file your returns, you may also lose your refund.
What Is the Difference Between a CP518 Notice and a CP59 Notice?
A CP59 notice is the first notice the IRS sends when it has no record that you filed a prior year’s tax return. On the other hand, a CP518 notice is the last notice the IRS sends to remind you of your unfiled tax returns. As mentioned earlier, the IRS may prepare a return for you if you ignore the CP518 notice.
If you have received a CP518 notice from the IRS, do not wait to respond or file missing taxes. If you do not know how to address your unfiled taxes, consider scheduling a free call to see how we can help. You can also call us at (866) 568-4593.
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