The IRS sends a CP2000 notice to taxpayers when the income or payment information on file with the IRS doesn’t match the information that was reported on your tax return. Due to that difference, there may be an increase, decrease, or no change to the tax reported. Taxpayers come into our Richardson TX office and want to know how to properly respond to the notice. Read further to learn more on effectively dealing with the CP2000 Notice.
What Should You Do?
- First, make sure you open your mail. While this sounds like sarcasm, in reality, many of the problems that I assist taxpayers with could have been resolved easily if addressed timely. The IRS is bad news and many people don’t want bad news. Don’t be that person. Open your mail!
- Read the notice carefully. You need to understand what the IRS does not believe match and how it impacts your tax liability.
- If you agree with the IRS, follow the instructions. If you owe additional taxes, either pay the tax owed or work with the IRS to set up a payment plan.
- If you don’t agree with the IRS, respond to the notice with the information that supports your position. Follow directions and respond to the proper IRS division.
- If an outside party is responsible for reporting information incorrectly to the IRS, contact them directly and request that they send a corrected statement. An example would be if a company sent a Form 1099-MISC to you in error or for the wrong amount.
- Address the issues timely as requested on the notice. If you don’t respond timely, it is likely to be escalated to the next step. Eventually, you may be levied or have a Federal Tax Lien placed on your assets. Address the Issue Timely!
- If you don’t understand the issue and need help, either contact the IRS to answer your questions or seek outside help. Do NOT ignore the Notice!
When a taxpayer received a CP2000 Notice, it can be intimidating, but the notice is simply stating that the IRS has conflicting information between the tax return and other information in their database. If the taxpayer reads the notice and follows the directions on the notice in a timely manner, they should be able to resolve the issue in a fair manner.
Do You Need Help?