IRS NOTICE REFERENCE
Understanding your CP538 notice
This is the second notice telling you we haven’t received payment for taxes owed on your Form 1040, U.S. Individual Income Tax Return , with interest or dividend income. If we don’t hear from you by the date on your noti…
General information only. Not legal or tax advice.
Notice details
- Notice code
- CP538
- Category
- Underreporter / income matching
- Severity tier
- Tier 2 — Action or response expected. The IRS has taken or proposed an action and expects a response or payment.
- Governing law
- §6201; §6212 (Internal Revenue Code sections)
- Source
- IRS.gov — Understanding Your IRS Notice
What this notice is
This is the second notice telling you we haven’t received payment for taxes owed on your Form 1040, U.S. Individual Income Tax Return , with interest or dividend income. If we don’t hear from you by the date on your notice, we’ll begin (or continue) backup withholding (BWH).
Source: IRS.gov. Reproduced for reference. General information — not legal or tax advice.
What the IRS says to do
Review your filed Form 1040 for underreported interest or dividend income. File Form 1040-X, Amended U.S. Individual Income Tax Return , for any underreported interest or dividend income. File Form 1040-X, Amended U.S. Individual Income Tax Return , for any underreported interest or dividend income. Pay all taxes owed on your interest or dividend income from Form 1040 . Use your online account to view your balance and more.
This is the IRS’s own guidance reproduced from the IRS notice page. It describes the IRS’s process — it is not legal or tax advice from TaxRiskOS.
Governing IRS procedure (Internal Revenue Manual)
The IRS’s own internal procedures for handling this notice type are documented in the Internal Revenue Manual:
- IRM 4.19.3 — 4.19.3 IMF Automated Underreporter Program
- IRM 4.19.2 — 4.19.2 IMF Automated Underreporter (AUR) Control
Reference to published IRS procedure. General information — not legal or tax advice.
Official IRS reference
Read the official notice page on IRS.gov: https://www.irs.gov/individuals/understanding-your-cp538-notice
Related tools
TaxRiskOS is workflow software for practitioners — it captures the notice, computes the deadline, surfaces the escalation tier, and builds a document checklist. It documents process; it does not give advice or draft responses.
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