I represent taxpayers in Bucks and Montgomery county PA with tax issues. Today's topic is what is a IRS Notice CP2000 and what do I do about it?
I have recently seen an uptick in IRS notices CP2000s. A CP2000 notice results when the IRS records (W-2 or 1099 information for example) do not match what is showing on your tax return. The CP2000 notice will propose changes to your tax return. This does not mean you are being audited, but a discrepancy on your return that needs to be resolved. You should review the proposed changes. If you do not agree with the changes, it is very important to respond by the due date (30 day letter). Include a copy of the CP2000 notice and return supporting documentation on why you do not agree with the proposed change. You do not have to file an amended return for that tax year.
If the IRS agrees with your supporting documentation, the IRS will send a letter confirming the issue has been resolved. If the IRS does not accept your explanation or does not even look at your supporting documentation, the IRS will send you CP3219A: Statutory Notice of Deficiency. Once the Notice of Deficiency has been issued, the IRS assumes the proposed changes are now final. A taxpayer can challenge the changes to the tax return in US tax court. If the case has not been heard by the Appeals division, your case will go to Appeals before actually going to US tax court. If you do not want challenge in US tax court, you can challenge the liability with audit reconsideration or file a Doubt as to Liability offer. The downside of these alternatives is you are at the adminstrative mercy of the IRS. The Appeals divsion is often the best option for taxpayers.
I realize the IRS notices can be overwhelming and frustrating. It is important to understand the IRS process so you can challenge the proposed changes the proper way. If you or someone you know have a tax issue, please call me at 215-316-3437 or email me at email@example.com.
1016 Mill Creek Drive - Feasterville, PA 19053
215-316-3437 P 215-953-8650 F