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Tax and IRS terms, explained plainly.

No jargon, no fine print. Just what these terms actually mean, grouped by where you're likely to run into them.

Records and documents

Account transcript: An IRS record showing the full transaction history for a tax year, including assessments, payments, penalties, and interest.
Return transcript: An IRS record showing most line items from your originally filed return, as the IRS processed it.
Wage and income transcript: An IRS record showing income reported to the IRS by employers and other payers, such as W-2s and 1099s.
Record of account: A combined document that includes both the account transcript and the return transcript for a single tax year.
Transcript: A general term for any summary of tax return or account information the IRS makes available to taxpayers.

Assessment: The formal recording of a tax liability by the IRS after a return is processed or a substitute return is prepared.
Failure-to-file penalty: A penalty charged when a required tax return is filed after its due date.
Failure-to-pay penalty: A penalty charged when tax owed is not paid in full by its due date, regardless of when the return was filed.
Substitute for Return (SFR): A return the IRS prepares on a taxpayer’s behalf when a required return goes unfiled, generally without deductions or credits the taxpayer might otherwise claim.

CP14: The IRS notice sent when a processed return shows a balance due — typically the first notice in a collection sequence.
CP2000: A notice sent when income reported to the IRS by a third party does not match what was reported on a filed return.
CP504: A more urgent notice warning that the IRS may levy a state tax refund or other assets if a balance remains unpaid.
Lien: A legal claim the IRS places against property when a tax debt goes unpaid, which can affect the ability to sell or refinance that property.
Levy: The actual seizure of property or funds — such as wages or a bank account balance — to satisfy an unpaid tax debt.
CSED: Collection Statute Expiration Date — the date after which the IRS generally can no longer legally collect a specific tax debt.

Offer in Compromise: An agreement that lets a taxpayer settle a tax debt for less than the full amount owed, based on demonstrated inability to pay in full.
Installment agreement: A payment plan that lets a taxpayer pay an outstanding balance over time instead of in one lump sum.
Currently not collectible: A status the IRS can assign to an account when a taxpayer demonstrates they cannot currently pay, which pauses active collection.

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