Calculator beside scribbled notes on returns

If you get an IRS CP 2000 notice, it means that your tax return doesn’t match the income information on file with the IRS, such as Forms W-2 and 1099. CP2000 notices are not IRS audits but work rather the same way. Also known as an underreporter inquiry, this notice basically proposes taxes, penalties, or even interest that you might owe for missing income on your tax return. It’s crucial to assess and fully respond to the notice by the IRS deadline.

In some instances, you might not owe the full amount or even anything at all. It depends on whether or not you or your employer reported your income correctly or the information reported on the IRS CP2000 notice is wrong. So, what do you do when you get an IRS CP 2000 notice?

How to Respond to a CP2000 Notice

There’s a process of responding to a CP2000 notice before you even think of filling in any information in the IRS CP2000 response form. It’s highly recommended that you consult an experienced tax resolution attorney to help you investigate the notice more and get back to the IRS with concrete information within the specified amount of time. And, if it’s true that you owe the IRS penalties, you’ll have to take care of that. A knowledgeable tax attorney will advise you on the best tax relief options to consider to help you pay back taxes.

Here are the steps that you should take with the help of a tax expert:

Evaluate the Notice and Decide on the Right Response

Start by determining whether or not you owe more taxes. You can do this by checking whether you correctly reported the income mentioned in the IRS CP 2000 notice on your tax return.

  • Gather all the relevant financial information statements under your Social Security Number. These will be forms like 1099s and W-2s that report your income for the year. Compare them with your tax return to identify anything that you could have missed.
  • If you left off any income in your return, you’ll need to calculate again any additional tax that you owe the IRS. Don’t forget to factor in deductions that may come up from the new tax calculation.
  • After doing proper calculations, you can now determine whether you agree with the CP2000 notice or not. A tax resolution attorney can guide you through each of these steps to ensure you’re doing everything right.

Respond to the IRS

  • If you agree with the IRS CP 2000 notice, send back the IRS CP2000 response form to the IRS with the actual payment. If you’re not in a position to pay the full amount, you can request an installment agreement in your response form with the help of a tax attorney.
  • If you disagree or partially agree to the notice, you’ll have to compile documents supporting your position and mail them to the IRS. If the notice is incorrect, you can attach a corrected tax return. If accepted by the IRS, your return will be corrected.
  • If the IRS rejects your response, you can appeal the decision or even address the proposed penalties in the notice in your response under the guidance of a tax attorney.

How to Prevent Any Future Underreporting

Woman checking tax numbers with a large calculator

To reliably prevent any future underreporting, consider calling the IRS after around eight weeks to confirm that you resolved the tax return issue. It’s vital to analyze your information statements to determine if you made such mistakes in previous years. When filing future returns, make sure you have all relevant information gathered so you can make the correct calculations.

If you need expert help with your IRS CP2000 response form, don’t hesitate to consult our professional and experienced Southern California tax resolution attorneys at Delia Law. Contact us for a free consultation.

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