We can generally accept your information over the phone for incorrectly reported information. If the IRS finds that you have several instances of misreporting, they may investigate and find that you owe more on previous returns, as well. That is why we recommend that you work with what is a cp2000 notice a tax professional for your tax preparation services and income tax service, so that you can ensure your taxes are filed without issue. They can also assist with tax fraud information, in the event that your CP2000 IRS Notice has been issued as the result of fraudulent behavior.
What To Do if You Agree With the Proposed Changes
CP2000 Notice is simply a document the IRS sends proposing that you revisit your claimed income, payments, credits, or deductions. These changes will either result in more taxes owed or a larger credit. If they do not receive a response, they will send a second letter called an IRS Notice CP3219A. IRS provides a phone number on the letter to assist taxpayers with any questions and explain further action required to settle discrepancies. At times, the mismatch is due to a simple but valid error or omission. For example, a taxpayer might have received $200,000 from a distribution from an IRA account, but forgot to report that on a tax return.
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If you used a tax preparer, they may be able to give you a copy of your return. Otherwise, you can get a copy of your return by completing and sending us a Form 4506, Request for Copy of Tax Return PDF. If you believe someone used your identity to claim expenses, resulting in inaccurate information on the CP2000 notice, you must file Form (Identity Theft Affidavit). How you should respond to the notice depends on whether you agree to the proposed changes.
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However, if IRS closes your case, you will be able to argue that you requested a time extension, and it was unreasonable for the IRS to close it. IRS released YouTube videos and dedicated a frequently asked questions page to help walk through common CP 2000 questions for those who received the letter and have questions. Although not frequent, there are fake CP2000 notices that are sent out by scammers to gather information.
Also, be aware that scammers may attempt to defraud you by contacting you over the phone or email. Know that the main form of communication by the IRS is by mail, and not by other contact methods. If you receive an email containing a CP2000 that you suspect might be a fake, forward it to and then delete it from your inbox. Fraudulent CP2000s sent out by scammers impersonating the IRS have become more common in recent years.
- Additionally, this letter states that you have the opportunity to agree or disagree with the proposed change.
- Partnering with a reputable tax professional is crucial if you want the IRS to accept your OIC proposal.
- To get a clearer picture, you may call the IRS directly for clarification.
- If you do not agree with the changes, you can check the relevant box on the response form (I don’t agree with some or all of the changes).
- No matter your situation, we’re here to guide you through the process of understanding and responding to your IRS CP2000 Notice.
Responding to a CP2000 notice in time is crucial, regardless of whether you agree with the proposed changes. By responding to this letter in time, you can avoid the substantial understatement tax penalty that the IRS lists under the proposed changes. While a CP2000 notice may propose changes to the tax you owe, receiving this IRS letter is not a reason to panic. In this post, our legal team at Seattle Legal Services, PLLC, outlines the steps you should take if you disagree with the proposed changes. We also discuss your options if you agree with the changes but cannot afford the proposed amount due. The Internal Revenue Service (IRS) sends this letter if the information on your return differs from the information the agency received from third parties.
Do I need to amend my tax return?
The IRS will then make corrections if both sets of data do not match. The IRS issues a CP2000 notice to reflect the changes they propose to make to your return. The notice provides you with a brief summary of the changes, as well as for instructions on what to do if you disagree. If you choose to file an amended tax return, be sure to include it with your CP2000 response form.
- Not everyone does, but if you do qualify this often is the best option to resolve your tax debt.
- We also discuss your options if you agree with the changes but cannot afford the proposed amount due.
- If it turns out they sent the IRS the wrong information, ask them for a corrected document or a statement to support why it is in error, then send the IRS a copy with your response.
- Use the enclosed envelope to send your Response form and any other necessary documents.
A CP2000 notice is automatically generated, so it isn’t always perfect. In fact, there are plenty of stories about taxpayers receiving incorrect CP2000 notices that don’t result in extra taxes. Provide a signed statement explaining why you disagree and supply any documentation to support your statement. Send it (along with the response form) to the IRS address printed on the CP2000. Usually, it means that you didn’t report all of your income properly. It could mean you underreported income for your self-employment taxes or freelance work you did as an independent contractor, for example.
Send the IRS a Response
They’re not offsetting total income with returns- which can trigger the discrepancy. Other scenarios, such as reporting different numbers on W-2 income, can trigger an IRS CP 2000 letter. A sole proprietor with a merchant account who fails to report the correct amount of gross receipts can also receive the letter.
