What Happens if I Receive an IRS CP2000 Notice?

If you believe that someone is fraudulently using your name or social security number, you can download a Form 14039, Identity Theft Affidavit, from IRS.gov. Fill it out, and include it along with your response form, indicating that you believe you are the victim of identity theft. If your CP2000 notice does not contain a response form, follow the instructions on your letter to notify the IRS of your decision. To timely submit a tax court petition you must do so within 90 days of IRS Notice CP3219A if you are located in the US, and 150 days if you are located outside the US.

If you file an amended return, the IRS may not recognize your amended return as a CP2000 response. That’s because amended returns go to a different IRS department that doesn’t handle CP2000 responses. When you file a Form 1040X response, you may not be able to contest any proposed penalties or ask for an appeal.

What is an IRS CP2000 notice?

For instance, the IRS might have generated the notice because of a real discrepancy, but perhaps, you weren’t required to report the income. Usually, these notices are generated well after the April filing season, and any refund that was due to you will have already been issued. If you do not have a copy of your return, you can request one from the IRS by submitting a Form 4506-T, or Request for Transcript of Tax Return. These disparities are generally easy to remedy and are due to small errors like typos. But delaying your response or ignoring the notice could lead to complications and penalties. You can agree to the additional income, and request the Penalties to be forgiven.

Due to the differences in the tax records, the IRS automatically generates this statutory notice. When the IRS receives your tax return, it runs the return through an automated matching system. If this system finds a discrepancy, it flags your return with the 922 IRS code. Then, it generates a CP2000 after applying the 922 code to your account. The notice relates to the Affordable Care Act (ACA) and requests information regarding 2014 coverage. Have you received a notice from the Internal Revenue Service (IRS) stating that a difference was found in reported income, deductions, credits or payments?

What happens if I ignore the CP2000?

If there is a discrepancy, it could be caused by an error by you, a third party, or even the IRS computer system. A response to an IRS audit letter differs from a request for reconsideration letter. The request for reconsideration letter asks the IRS to reconsider the results of a completed audit or Substitute for Return. In contrast, an audit response letter is the correspondence you send when you have received an IRS audit letter. An IRS audit letter notifies you that your return has been selected for audit.

It shows a “proposed amount due” based on the discrepancy in your tax return. The IRS shares any information sent in a CP2000 notice with the states, sending the Indiana Department of Revenue (DOR) information on Indiana’s taxpayers. DOR then compares what is a cp2000 your 1040 with your IT-40 to detect any inconsistencies from what was filed at the federal level. If there is a difference in the amount filed and the amount adjusted by the IRS, DOR will adjust the taxpayer’s return and possibly issue a bill.

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If the IRS does not accept the information provided, it will send IRS Notice CP3219A, Statutory Notice of Deficiency, which includes information about how to challenge the decision in Tax Court. If some but not all of the discrepancies have been resolved, the IRS will send you a CP2000 notice with a new proposed tax calculation. If you believe that the information on the IRS CP2000 notice is incorrect because someone is using your name and social security, file a Form 14039, Identity Theft Affidavit.

• While it might be tempting to write the cover letter and put together the request package on your own, the discretionary nature of the reconsideration process calls for the expertise of a tax attorney.
• If you have additional income, credits, or expenses to report, complete and submit a Form 1040-X, Amended U.S. Individual Income Tax Return.
• If the IRS upholds the proposed assessment, the taxpayer will receive a separate Statutory Notice of Deficiency.
• If you agree with the IRS notice, follow the instructions to sign the response page and return it to the IRS in the envelope provided.
• If you believe that the information on the IRS CP2000 notice is incorrect because someone is using your name and social security, file a Form 14039, Identity Theft Affidavit.
• If the taxpayer’s documents agree with the proposed IRS changes, then the taxpayer should complete the response section of the notice and return it to the IRS.
• This response can be mailed to the IRS at the address on the CP2000 notice or transmitted to the fax number listed on the CP2000 notice.

Once you understand your position with the IRS, we can also help you enlist support to deal with the IRS. A tax professional from our trusted tax resolution partner can help you navigate the CP2000 notice and any taxes owed from it. Book a free call to learn how we can help you navigate your CP2000 notice. If you can’t pay the full amount right away, you can set up a short-term payment plan or a long-term installment agreement with the IRS. Payment plans must be repaid in 180 days or less, while installment agreements require monthly payments. You or your tax pro will need to investigate the issue more and get back to the IRS within a certain amount of time.

Most of the time there’s a 1099 or W2 you or your tax preparer forgot to include in your tax return. To request an audit reconsideration, a taxpayer must present evidence not considered in the initial audit or a completed delinquent return showing a different result. In addition, the taxpayer should not pay any assessment, and have exhausted all other options for questioning the IRS’s decision, such as filing a petition in Tax Court. The CP2000 notice will either be accompanied by a response form or contain instructions on the notice itself for further actions.

• Getting mail from the IRS can be a headache for even the most stalwart of taxpayers.
• You may agree with the amount indicated on the IRS CP2000 notice but find you are unable to pay.
• Identity theft cases can get overwhelming quickly, and maybe a real mess to sort out.
• Sometimes, the IRS can question deductions or credits you took that don’t match information statements filed under your Social Security Number.
• We require both spouses’ signatures if you filed married filing jointly.
• Taxpayers can file appeals arguing against both the determination and the penalties, and these appeals frequently address the situation completely or significantly reduce the amount owed.
• Book a free call to learn how we can help you navigate your CP2000 notice.
• The CP2000 is not just a notice that something doesn’t look right.

The worst thing you can do when you receive a CP2000 is to ignore it, which will almost certainly result in additional penalties and interest. It’s important to note that a CP2000 notice is no reason to panic. It’s quite common to get one, and they don’t always result in an increased bill. H&R Block has tax experts available in-office or virtually to get you https://www.bookstime.com/ on the right track with the IRS and save you time. Nobody wants to take the IRS to court – especially if someone at the IRS can informally take a second look at your dispute. An IRS Appeals officer can check the accuracy of the IRS tax examiner’s determination about your CP2000 – and reverse the examiner’s decision without requiring you to go to court.

Additionally, if taxpayers missed an information return and failed to report it on their income tax return, taxpayers should consider whether they should amend their tax return. For the Schedule C filer, additional income may mean deductions that can offset income. Taxpayers should assess their complete situations to understand how to respond to the IRS. Internal Revenue Service (“IRS”) Notice CP2000 is a computer-generated notification of additional tax for taxpayers who filed a federal individual income tax return. IRS Notice CP2000 effectively operates as an IRS audit of underreported income and is administered by the IRS AUR program to flag potential underreporters. It’s important to keep in mind that if you’ve left essential income information off your tax return once, there may be a problem within your information-gathering process that needs to be fixed.

If the information displayed in your CP2000 notice is correct, you generally do not need to amend your tax return. We recommend speaking to a tax professional anytime you are unsure if you need to amend or not. Receiving a CP2000 notice could mean that you forgot to report a source of income—maybe you filed your taxes before receiving all of your income statements—or that the IRS system has made a mistake.