IRS Notice · CP88 · Refund Held · Decode

CP88: your refund is held, and the IRS says it will figure the year for you

A CP88 holds a refund you are owed because an older return is missing — and unlike its near-twin the CP63, it says the IRS will determine the tax rather than that it may. One word, and what it actually changes.

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A CP88 holds a refund you are owed because an older return is missing — and unlike its near-twin the CP63, it says the IRS will determine the tax rather than that it may. That is one word, and it is the only real difference between the two letters.

If you have looked this up already you will have found pages about the CP63 and wondered whether they apply. Mostly they do. The two notices do the same job in almost the same words: a refund on one year is held because a return for another year is missing and the IRS thinks tax may be due.

One word differs and we are not going to pretend it is more than that. A CP63 says the IRS may determine your tax for you. A CP88 says it will. "Please file your [year] tax return, or we'll determine your tax for you."

What it does not mean is that anything has already been decided. No tax has been assessed on the missing year and no amount is stated on this notice, because until a return exists there is nothing to state. The letter describes what is coming, not what has happened.

(800) 236-3741 — the line is answered 24 hours a day, seven days a week. The first call is free, with no obligation and no conditions.

Key takeaways

•A CP88 holds a refund for one year because a return for another year is missing. The IRS: "We're holding your tax refund because you haven't filed one or more tax returns, and we believe you may owe taxes."
•Your notice prints a date to file by. It is an absolute date. The IRS's own page publishes no day count and says only "File your personal tax return by the due date listed on your notice."
•The difference from a CP63 is one modal verb — will rather than may. Everything else about the two notices, and about what to do, is the same.
•The refund is held, not forfeited — but refunds expire on their own schedule, generally three years from the original due date of the year they belong to.
•Filing the missing return is the usual action — and not the only one. The IRS says it can release the refund on receiving the past-due returns or an explanation that you weren't required to file. There is no form for the release itself and nothing to appeal.
•If the missing year itself produces a refund, that year is older and its clock is further along.

What a CP88 is

A CP88 is a notice that the IRS is holding a refund pending an unfiled return. From the notice: "Our records show that you didn't file your [year] Form 1040. As a result, we're holding your [later year] tax refund until we can determine whether you owe additional taxes for [year]. Please file your [year] tax return, or we'll determine your tax for you."

The IRS's own summary: "We're holding your tax refund because you haven't filed one or more tax returns, and we believe you may owe taxes."

The mechanism is straightforward and it is not a penalty. Rather than pay out a refund on one year while an unquantified liability sits on another, the IRS holds the money until the second year is resolved.

The one word, and what it is worth

The CP88 and the CP63 are the same notice in substance. Same hold, same reason, same fix, same consequence section describing a computation from third-party records without deductions or credits you did not claim.

The difference:

	CP63	CP88
The sentence	…or we may determine your tax for you.	…or we'll determine your tax for you.
What it signals	The computation is available to the IRS	The computation is what happens next
What to do about it	File the missing return	File the missing return

We are not going to build a larger distinction than the documents support, and there are two honest reasons for that.

The first is that the action is identical. Whether the IRS may or will compute your year, the response is to file it yourself — because your return includes what theirs cannot.

The second is a caveat about these two notices that most published content skips. The CP88 specimen we read is from an older cycle than the CP63 specimen, and CP88 does not appear on the IRS's current index of notices for past-due returns. That may mean CP63 has largely replaced it. We found no IRS statement saying so, so we are not going to tell you that it has — if you are holding a CP88, it is your notice and this page treats it as current.

Sources: IRS Notice CP88 specimen, irs.gov, read 6 September 2026. IRS, "Understanding your CP88 notice," reviewed 6 September 2026.

Your clock

Your notice prints a file-by date, and it is an absolute date rather than a day count. The IRS publishes no standard period for this notice — its own page says only "File your personal tax return by the due date listed on your notice" — so the date on your copy is the operative one and there is no general rule to check it against.

That date is when the IRS may begin computing the year itself. It does not forfeit a right, and a return filed after it will still be accepted.

The date that cannot be missed belongs to you and is not on this letter. A refund expires generally three years from the original due date of the year it belongs to. Under IRC 6511 the claim must be filed within three years of filing the return or two years of when the tax was paid, whichever is later — and IRC 6513(b)(1) treats tax withheld from wages as paid on the original due date. So the clock on a wage earner's refund started without them, and when it closes the refund does not shrink; it goes to zero.

Both years in play here have one. The refund being held has its own expiry, and the missing year — if it turns out to carry a refund — has an older one.

What happens if you do nothing

The IRS computes the missing year, and the held refund is offset against whatever it computes.

That is the worst arrangement of these facts. The IRS's figure is built from third-party records: every dollar anyone reported, none of the deductions or credits you did not claim, filing status set to single or married filing separately. The IRS states the consequence in its own words on the notices in this sequence: "This means you may not receive certain exemptions, deductions, or credits that you would otherwise receive if you filed your own return."

Then your refund pays for it. Money you were owed disappears into a liability computed without you, and the balance that remains after that is the one you are left arguing about.

Penalties accrue on any tax that turns out to be due — 5% of the unpaid tax per month or part of a month for failing to file, capped at 25%; 0.5% per month for failing to pay, also capped at 25%. Where both run in the same month the filing penalty is reduced by the payment penalty, so the combined figure is 5% a month, not 5.5%.

And there is a structural point worth knowing before you decide to wait. A return the IRS prepares for you does not start your limitation clocks. IRC 6501(b)(3) says so expressly, notwithstanding the provision that otherwise makes an IRS-prepared return "prima facie good and sufficient for all legal purposes." So letting them do it leaves the tax assessed and collectible while none of your own periods have begun.

What to do

Step one, and on most CP88s it is the whole job: pull the wage and income transcript for the missing year. It shows what was reported about you, and for a straightforward year it is most of the return.

1. Get the transcript for the year named on the notice.

2. File that return — or, if you were not required to file that year, tell the IRS so. Both resolve the year. There is nothing to request, appeal or negotiate beyond that.

3. Check whether the missing year produces a refund rather than a balance, which happens more often than people expect on a low-income year with withholding.

4. File by the printed date if you can, and after it if you cannot. Later is better than not.

5. Confirm whether other years are missing. The notice names the one blocking this refund; it is not a complete list.

What is harder than it looks here is knowing whether the IRS has already done what the letter threatens. A CP88 says the IRS will compute the year, and on an older account that may already have begun — or already have happened, on a year you have not thought about. The letter tells you what is coming; only the account tells you where the process has actually got to, and those two are not always the same thing on an account with several unfiled years.

Two things worth reading next, depending on where this goes. Unfiled back tax returns covers what the work involves once you know which years are missing. And what happens when the IRS files a substitute for return covers what "we'll determine your tax for you" means in practice.

The Non-Filer's First 30 Days

What to do first when there are several years and one of them is holding up your money. The ordering section is the useful one here — a refund being held is a reason to move on a specific year first, which is not the usual order.

A first name and an email address. It is a mailing list and we would rather say so. The figures move; this is how corrections reach you.

[ Get the sheet ]

Or call (800) 236-3741 and read us the two years on the notice. How far apart they are usually tells you whether this is one return or the visible edge of something wider. No charge, no obligation.

Katherine M. Johnson, CPA, CTRS

Katherine M. Johnson is a licensed CPA with over 30 years of experience and a Certified Tax Resolution Specialist (CTRS). She personally handles every case — representing individuals and businesses before the IRS and state revenue departments nationwide.

Read full bio

The Kentucky note

Kentucky operates its own refund offsets and its own filing enforcement, and neither follows the federal one. A federal refund released does not release a Kentucky one, and a Kentucky refund can be held for reasons that have nothing to do with your IRS account.

And where your CP88 threatens a computation you can still answer in your own time, the state's equivalent has to be answered in writing or the argument goes with it. Kentucky's Notice of Tax Due carries a 60-day protest window under KRS 131.110, running from the date of the notice rather than from receipt, and the protest must be in writing — a genuine forfeiture, which nothing on your CP88 is. And the Department of Revenue says a 25% cost-of-collection fee may be added to unpaid tax 60 days after the original notice date; the rate is set by KRS 131.440(1)(a)1 and that trigger is the department's administrative practice rather than statutory text.

So the federal letter in your hand is the more forgiving of your two possible problems. Kentucky's Notice of Tax Due sets out the state clocks.

What we see

People holding a CP88 usually want to know one thing before anything else: whether filing the old year will cost them the refund they are waiting for.

Sometimes it does, in whole or in part, and it is worth saying that the alternative is worse rather than better. The held refund is going to meet whatever the missing year produces either way. The only question is whether that number is one you computed or one built from a transcript — and a transcript contains everything reported about you and nothing that reduces it.

And on the part people apologize for: an unfiled year is not a character reference. The commonest reasons are dull — a document that never turned up, a year with a decision in it nobody wanted to make, a stretch when opening the mail was the hardest thing in the week. You are not the first person to have one, and the process asks for a return rather than a reason.

The word people fix on in a CP88 is will, and it reads as though something has already been done to them. It has not been — but it does change the first thing we check, which is the account rather than the letter, because on an older file with several unfiled years a computation may already have run on one of them and no letter in the drawer will say which. After that it is the missing year itself: a transcript for it, and a look at whether anything on there is a gross figure — a property sale, a distribution, canceled debt — that will read far worse than it turns out to be. What we can usually say quickly is which of the two years on the notice is the one actually under time pressure, and it is often not the one people are watching. Two years read off the top of a notice is enough to begin with, which is less than most people have already spent worrying about it.

Katherine — you are welcome to modify the above paragraph with what you have actually seen.

If you would rather ask than read: (800) 236-3741. You do not have to have decided anything, and you do not have to have opened the rest of the envelopes.

Where this sits

Notice	What it is
CP59 → CP515 → CP516 → CP518	The requests for the missing return.
CP63	The same refund hold. The IRS may determine the tax.
CP88▶ You are here	The same refund hold. The IRS says it will determine the tax.
CP2566	The computation itself, with 30 days to respond.
CP3219N	Notice of Deficiency. 90 days, and the right expires.

See the full library →

Common questions

Is a CP88 worse than a CP63?

Marginally, and only in what it says about intent — will rather than may. Neither notice assesses anything, both hold a refund for the same reason, and the response to both is identical.

Will I lose the refund they're holding?

Not to the hold. It is held rather than forfeited. But a refund has its own expiry — generally three years from the original due date of its year — so a hold that runs long enough can outlive it. Filing the missing return is what ends the hold.

What if the missing year means I owe?

The held refund is applied against it. That is the ordinary outcome and it is usually better than paying from your own pocket. And your own return can contain what the IRS's computation cannot, for the reason the IRS itself gives on the notice.

Can I get the refund released without filing?

Not by asking for the release on its own. But the IRS says it can release a held refund once it has the past-due returns or an explanation that you weren't required to file — so if you were below the filing threshold for that year, the explanation is the route rather than a return. What does not exist is a way to release the money while the year stays unresolved.

The IRS says it will determine my tax. Has it already?

The notice describes what happens if you do not file; it does not report that it has been done. Whether a computation has actually begun on your account is a separate question and it is answered by the account rather than by the letter.

Where the honest answer is a different phone number

For a straightforward missing year — a W-2, maybe some interest — this is a late return and nothing more, and there are two places to take it that are not us. The IRS itself, at the number on your notice, will confirm exactly which years it is looking for, and that is the call most people should make first. And the free filing programs, staffed by IRS-certified volunteers — VITA for people who generally make $69,000 or less, for people with disabilities and for limited-English-speaking taxpayers, and TCE for people aged 60 and older. Ask first whether the site takes the year you need — these programs are built around the current season and prior-year preparation varies by location.

Here is where it stops being a filing job:

The missing year has self-employment or cash income, so the transcript is a starting point rather than the return.
The transcript shows a property sale, a retirement distribution or canceled debt — each a gross figure with no basis and no exclusions, each far worse on paper than in fact.
More than one year is missing and the order matters, particularly if one is close to expiring.
You suspect the IRS has already computed a year and you cannot tell from the letters which ones.
A business was involved, especially with employees, where the exposure runs on a separate track.

If you cannot tell which of those you are, that is answered by the transcript in a few minutes rather than by an engagement.

On the part that is actually hard, which is not the tax.

If you have not said this out loud to anyone, the call is the difficult step rather than the return. It is confidential. Nothing is reported because you called, and nothing reaches the IRS without a signed authorization from you. You can describe it, hear what it is, and leave it there.

And it is a real office in Georgetown, Kentucky — 240 Blossom Park Drive, Suite 3 — rather than a phone bank.

Here: Katherine works the account herself and you are not handed to a case manager. The first step is the transcript for the missing year. And if it is a W-2 year, that is what you are told on the first call — with the number for the free service.

The first call is free, it is thirty minutes, and there is no obligation at the end of it. All it needs to start is the two years printed on your notice.

(800) 236-3741 — answered 24 hours a day, seven days a week. After hours you reach an AI receptionist rather than voicemail: it answers common questions, takes your details, and books the first available thirty minutes.

Call (800) 236-3741 Book a time

This page explains how IRS notices and the rules behind them generally work. It is not tax or legal advice about your situation, and reading it does not create a client relationship. Figures are current as of the last-reviewed date above.

The NLTR Office ·

Reviewed by Katherine M. Johnson, CPA, CTRS