global Tax IRS Alert: Incorrect CP161 Notices Issued for Certain Trust Returns May 22, 2025 The IRS has identified a programming error that caused some CP161 balance due notices to be sent in error for 2024 Form 1041 trust returns. If you received one of these notices, here's what to know. These notices incorrectly assess estimated tax penalties, even in cases where no payment was required, such as trusts that elected estate treatment or had no prior-year tax liability.According to the National Association of Tax Professionals, the IRS is aware of the issue and is working to automatically correct affected accounts within the next month. No action is required at this time unless the penalties are not reversed after that period.If you’ve received one of these notices, please do not make a payment. Instead, reach out to your KLR Tax professional for guidance.