If you choose to file an amended tax return, be sure to include it with your CP2000 response form. The IRS website recommends writing “CP2000” at the top of your return and attaching it behind your completed response. 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). Then, you need to return the response form and include a signed statement explaining why you disagree with the proposed changes.

• Additionally, you will need to pay the understatement penalty, and interest will continue accruing on the amount you owe.
• If you need to review your tax return, you can always order a transcript directly from the IRS or partner with a service like 20/20 Tax Resolution.
• The adjustment may result in additional tax owed or a refund of taxes paid.
• You can find more information on the IRS identity theft information web page.
• Therefore, a taxpayer or their representative can prepare an amended tax return before the IRS sends the CP2000 notice.
• Penalties and interest will likely keep growing if you do not pay immediately.
• CP2000 is an IRS notice generated by an Automated Under-Reporter (AUR) Control System.

CP2000 response letter examples

That is why we recommend that you work with 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 what is a cp2000 notice your CP2000 IRS Notice has been issued as the result of fraudulent behavior. If you agree with our notice, follow the instructions to sign and return the response form in the envelope provided or fax it to the number shown on the notice.

Responding to the notice:

If you’re unsure about how to respond to a CP2000 or have complex tax issues, consider seeking the help of a qualified tax professional, such as a CPA or enrolled agent. They’re your guide through this maze, making sure you’ve got all the right paperwork and standing up for you in talks with the IRS whenever it’s necessary. It’s like having a superhero on your side but with a calculator instead of a cape. You may agree with the amount indicated on the IRS CP2000 notice but find you are unable to pay. Penalties and interest will likely keep growing if you do not pay immediately. If the amount you owe is a large one, you may want to discuss the following options with a tax professional.

• If you disagree with the IRS’s assessment, prepare a written response explaining why you believe their information is incorrect.
• Letter CP 2000 will show any amounts reported to the IRS by third parties that don’t match the amounts shown on your return.
• LITCs can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court.
• If you think you’ll have trouble paying your taxes or the NFTL filing will cause economic hardship, it’s helpful to know what your options are to address your tax debt.
• Keep accurate records throughout the year, and cross-reference your records with any 1099s or other income documents you receive.
• If you’re not sure how to proceed, you might need a bit more time.

What are my next steps?

In this case, your account is not collectible, which means the IRS cannot levy your bank account, garnish your wages, or take other collection action against you. The IRS may write off the liability if the debt expires while your account is currently not collectible. The above step will help you evaluate if there was a genuine error in reporting from your end or if the IRS sent the notice by mistake. Ignoring your CP2000 notice could bring you penalties and worse, audits from the IRS. Now that you can rest assured this document does not state you are being penalized, you can begin understanding your CP200. If the IRS relays that you’ve overreported, you may end up with more money back in your pocket.

This will allow IRS the ability to contact you directly and may shorten the time it takes to resolve any outstanding issues. If you realize you need to make corrections to your original tax return after receiving a CP2000, you may need to file an amended return using Form 1040-X. This is necessary if you have additional income, deductions, or credits to report that were not included on your original 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.
• Usually, it means that you didn’t report all of your income properly.
• The IRS sends a CP2000 notice six months after they add code 922 to the account transcript.
• Don’t let anything slip through the cracks when filing your return.
• The IRS matches the information you reported on your tax return with information reported to IRS by third parties such as employers, banks, businesses, and others.
• When the IRS sends you a CP2000 notice, the agency allows you to review the discrepancy and explain why you disagree with the notice.

Contact the IRS via the number printed on your notice for any deadline extensions or questions about the appeals process. 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.

Partnering with a reputable tax professional is crucial if you want the IRS to accept your OIC proposal. Ideally, you should consult a tax professional, especially if the CP2000 notice proposes a substantial amount. Schedule a consultation with us at Seattle Legal Services, PLLC, if you have received a CP2000 notice and do not know how to respond.

Steps to Amend Your Tax Return

Just access our accountant network and ask to be paired with an enrolled agent. Here’s a sample response letter to the CP2000 that you can download as a Word document. A CP2000 notice is generally less severe than an audit or tax bill. That said, navigating this communication with the IRS may require professional input, especially if the proposed amount is high or you have a complex tax situation. 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).

One key step is to make sure you’re withholding the correct amount of taxes from your paychecks. Review and update your Form W-4, Employee’s Withholding Certificate, with your employer as needed. Especially true for those who’ve recently tied the knot or welcomed a new bundle of joy into their lives. If the IRS is correct and you owe them money, you do not need to pay in full. You can request a payment plan, file an Offer In Compromise, request Currently Not Collectible status, and if it’s from your spouse, you may be eligible for injured spouse relief.

Beware of Tax Scams

The income information the IRS has on file for you, as provided by your employer, your bank, and any other third parties (via W-2s, 1098s, 1099s, and so on). Below we have sample CP2000 response letters that you can use to edit and send out for your response. Self-Employed and Stock Sale CP2000 letters are more likely to result in a larger balance than those for wage earners.