Educational notice: This page explains, in general terms, what an IRS CP10 notice is and why someone might receive it. It is not tax advice and is not affiliated with or endorsed by the IRS.

CP10 notice explained (What it means when the IRS changes your Earned Income Credit)

CP10 notice explained: A CP10 notice generally means the IRS changed (often reduced or removed) the amount of Earned Income Credit (EIC/EITC) shown on your tax return. In plain English: “We adjusted your Earned Income Credit, so your refund changed.”

This page explains what CP10 usually signals, why it happens, how it’s different from CP12 and CP75, what to look for on the notice, and what to do if you agree or disagree. Everything here is educational and general.

What Is a CP10 Notice (Plain English)?

CP10 is commonly described as a notice the IRS sends when it adjusts the Earned Income Credit on your return. Because the Earned Income Credit often affects the refund amount, a CP10 notice can feel like a direct hit to your refund.

The notice is typically the IRS telling you: “We changed the credit amount, and here is your updated result.”

Takeaway: CP10 usually means the IRS adjusted your Earned Income Credit, which can change your refund.

Why Would the IRS Adjust the Earned Income Credit?

The Earned Income Credit has specific rules and eligibility requirements. CP10 can show up when the IRS believes the credit amount claimed doesn’t match what the IRS thinks is allowed based on the information available.

Common general reasons include:

  • Income or filing status issues that affect EIC eligibility or amount
  • Dependent information that changes qualification
  • Information mismatches between the return and other data the IRS has
  • Processing corrections where the IRS recalculates the credit

This does not automatically mean anything “criminal” is going on. But it does mean the IRS believes the credit amount should be different.

Takeaway: CP10 is usually triggered when the IRS believes the Earned Income Credit amount should be recalculated or limited.

CP10 vs CP12 (Both Change Refunds, But the Topic Is Different)

A CP12 notice is commonly associated with a general correction that changes your refund. CP10 is more specific: it is commonly tied to a change to the Earned Income Credit.

If you received CP10, the IRS is usually pointing to the EIC calculation or eligibility as the reason your refund changed.

Takeaway: CP12 is a broader “we corrected your return”; CP10 is commonly “we adjusted your Earned Income Credit.”

CP10 vs CP75 (Adjustment vs Verification Hold)

A CP75 notice is generally more of a “we need to verify” situation before finalizing certain items. CP10 is commonly the IRS saying it already adjusted the Earned Income Credit and updated your result.

Takeaway: CP75 often signals a verification process; CP10 commonly signals an EIC adjustment was applied.

Does CP10 Mean You’re Being Audited?

Usually no. CP10 is generally in the “return adjustment” category. People often use the word “audit” as a catch-all for any IRS letter, but many IRS notices are not audits.

For the simple explanation in plain English: Does an IRS letter mean an audit?

Takeaway: CP10 is typically an adjustment notice, not a traditional audit notice.

What If CP10 Reduced Your Refund?

When the Earned Income Credit is reduced, the refund often drops. That’s why CP10 feels personal. The notice should explain the adjustment in general terms and show updated amounts.

If your biggest fear is “can they keep my refund,” this page breaks it down: Can the IRS take your tax refund?

Takeaway: If CP10 reduced your refund, the key is understanding the EIC adjustment and whether it is correct.

What If You Disagree With the CP10 Change?

This site is educational, not personal advice, but here’s the general approach:

  • Read the notice carefully and identify what the IRS changed.
  • Compare it to your return and your supporting information (income records and dependent details).
  • Follow the notice instructions for disputing/appealing, including deadlines.
  • Keep copies of everything you send and proof of when you sent it.

If you’re tempted to ignore it, don’t. Here’s why: What happens if you ignore an IRS letter?

Takeaway: If you disagree with CP10, deadlines matter—respond the right way and keep documentation.

Can CP10 Lead to Balance Due Letters?

In many cases, CP10 reduces a refund, but depending on the return and the adjustment, it can also create a balance due. If that happens, you may later see balance due notices like: CP14, CP501, CP503, and CP504.

If you want the bigger map of how those letters usually progress: IRS balance due letters explained

Takeaway: CP10 often changes refunds, but in some situations it can lead into the balance-due letter path.

Real-World Example (How CP10 Plays Out)

Someone files a return expecting a $3,200 refund. Then CP10 arrives saying the IRS adjusted the Earned Income Credit and the refund is now $1,700. The person feels blindsided and assumes the IRS is accusing them of fraud.

Educationally, the best next step is to slow down and identify exactly what the IRS adjusted and why. Sometimes the IRS is correct. Sometimes the taxpayer has documentation that supports the original amount.

Takeaway: CP10 feels intense because it hits the refund—but the real issue is the EIC calculation/eligibility behind the adjustment.

Helpful Related Pages

Frequently Asked Questions

What is a CP10 notice from the IRS?

A CP10 notice generally means the IRS adjusted the Earned Income Credit (EIC/EITC) on your tax return, which can change your refund amount.

Does CP10 mean I’m being audited?

Usually no. CP10 is typically an adjustment notice, not a traditional audit notice. See: Does an IRS letter mean an audit?

Is CP10 the same as CP12?

Not exactly. CP12 is commonly a general correction notice that changes your refund. CP10 is commonly tied specifically to the Earned Income Credit adjustment.

What should I do if CP10 reduced my refund?

Generally, review what the IRS changed, compare it to your return and documentation, and follow the notice instructions if you disagree. If your concern is “can they keep my refund,” start here: Can the IRS take your tax refund?

What happens if I ignore a CP10 notice?

Ignoring IRS letters can lead to missed deadlines and follow-up notices. See: What happens if you ignore an IRS letter?

This page is for general educational purposes only and does not provide tax or legal advice. WhatThisIRSLetterMeans.com is not affiliated with the IRS or any government agency.