IRS CP2000 Notice – what should I do if I receive one?
The IRS CP2000 notice means that the income and/or payment information the IRS has on file for you does not match the information you reported in your tax return. It is just a proposed adjustment for either an underpayment or over payment and hopefully an over payment. It is not a bill….yet.
Most of the time though, a taxpayer gets into trouble by not reporting enough income or possibly their employer or 1099 work reported the income wrong. The best thing you can do when you receive this notice is to act on it if you have mistaken under reported income. If you do not, the proposed amount will be assessed and the IRS will quickly move into collection activity.
What if the information I reported is incorrect?
You can call in to the IRS to correct the tax return in question. However, to correct it this way, the mistaken reported information must not increase or decrease your tax.
What if I disagree or the information reported is wrong on the IRS CP2000 notice?
Follow the information on the IRS form if the information is wrong. You may also contact the person or business reporting the income information and ask them to correct it and provide the IRS with the updated information.
If you cannot get a business or person to change the reporting information or if someone is using your name and social security number, call the IRS and let them know the situation. The next step is to document and make a copy of all your attempts to rectify the situation, attach this and file with IRS Form 14039 Identity Theft Affidavit.
Additionally, if the IRS processed the reported information incorrectly, be sure to either write back to them according to the notice or call the IRS directly. It is important to file a timely, detailed and organized response by the due date in the notice. If your response is incomplete and confusing, the IRS representative is likely to just ignore your response and to move forward with a notice of deficiency and final bill for the proposed amount due.
Should I amend my return if I agree with the IRS CP2000 notice?
If the information displayed in the notice is correct, amending your return is not necessary. Just sign and agree and return the notice back to the IRS. If you forgot to include certain income (especially if you were self-employed), you should amend if you also forgot to include credits or expenses possibly related to that additional income. Just complete and submit a Form 1040-X, Amended U.S. Individual Income Tax Return.
If you lost your original return, you can request a return transcript on the IRS ”Get Transcript” page. You can also get one by calling the IRS directly or by completing and sending a Form 4506-T, Request for Transcript of Tax Return.
What if I agree to the underreporting of income and cannot pay the amount owed?
It is very difficult to deal with the IRS alone to resolve tax debt. The first step is to hire a tax attorney to resolve the debt and certainly not a tax relief company or CPA. Avoid tax relief companies at all costs as they are almost always dishonest and incompetent as to the IRS policies and procedures and the tax laws.
A tax attorney or tax law firm can assist you with the following tax resolution options: penalty abatement, a payment plan, an offer in compromise (IRS settlement for less than you owe), a currently not collectible status and more.
Issues in a CP2000 usually can be resolved quickly and simply. The San Diego Tax Attorneys at Delia Law have many years of tax resolution experience and will competently represent you before the IRS. Please call for a no-cost tax attorney consultation for tax resolution at (619) 639-3336. We look forward to helping you.
This blog post is not intended as legal advice and should be considered general information only.
IRS Form cp2000_english Example down load from this link.
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