In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. For more information or to find an LITC near you, see the LITC page on the TAS website or Publication 4134, Low Income Taxpayer Clinic List. The first page of the notice provides a summary of proposed changes to your tax, a phone number to call for assistance, and the steps you should take to respond. Filing online can help you avoid mistakes and find credits and deductions you may qualify for. If you don’t respond, the IRS will send you a Notice of Deficiency and charge you a penalty in addition to any additional taxes or interest you owe as outlined in CP2000. If you disagree with the proposed changes in the CP2000 and send the IRS information supporting your claim, the IRS should take between 30 to 90 days to send you its decision.
What To Do if You Disagree With the Proposed Changes
In that case, you may want to seek help from an enrolled agent at a tax resolution company. These tax resolution specialists can help with any aspect of your taxes, including representing you before the IRS. If your CP2000 doesn’t come with a response form, it might come with alternative instructions for responding to the IRS. 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. If you’re feeling lost, the CP2000 includes a phone number you can call for more information.
Why Would Your Business Receive An IRS Notice CP2000?
Thoroughly read the CP2000 notice to understand the discrepancies the IRS has identified between your tax return and the information they have received from third-party sources. Keep in mind that the IRS can only accept additional information and correct a mistake over the phone if the mistake doesn’t increase or decrease your tax total. At Seattle Legal Services, PLLC, our team has the knowledge and experience to take control of the matter and achieve the best possible outcome.
First Step – Review the Proposed Changes
Again, if you wait, interest will accrue until the amount is paid in full. The income or payment information we received from third parties, such as employers or financial institutions, doesn’t match the information you reported on your tax return. This discrepancy may cause an increase or decrease in what is a cp2000 notice your tax or may not change it at all. The notice explains what information we used to determine the proposed changes to your tax return. Common reasons for receiving a CP2000 notice include not reporting income from all sources, such as wages, interest, dividends, pensions, or self-employment income.
- Once you respond to your CP2000, the IRS will send you a new, separate tax bill.
- If your request for an installment agreement is approved, you may be charged a user fee.
- If you want to contest the proposed changes, complete and return the response form indicating that you disagree.
- Respond within 30 days of the date of the notice or 60 days if you live outside the United States for a quick resolution.
- If you qualify for our assistance, which is always free, we will do everything possible to help you.
- They then assess how your reported income, credits, and deductions pair with their original data.
IRS CP2000 Notice – Responding to an Automated Under-Reported Letter
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. Keep in mind that the IRS can only accept additional information and correct a mistake over the phone if the mistake doesn’t increase or decrease your tax total. Your CP2000 might come with a response letter or form which explains the steps you need to take to approve and submit the proposed changes. So, keen on steering clear of those pesky CP2000 notices in the future?
Determine if the IRS is correct
If they do not include a response firm, they will include instructions on what you should do. Either way, you must respond within the time the notice indicates, usually 30 days from the date of the letter (not the date you received it) or 60 days if you were out of the country. That means the response must be delivered to the IRS within 30 days, it does not mean you have 30 days to mail it.
If you need more time
If your request for an installment agreement is approved, you may be charged a user fee. If you’re feeling less than 100% confident in undertaking any of the steps above, it’s best to contact a tax professional. If you agree with the proposed changes, complete, sign and date the Response form (we require both spouses’ signatures if you filed married filing jointly) and return it in the enclosed envelope. Interest continues to accrue until the amount due is paid in full. Payment of the proposed amount within 30 days will stop additional interest, and possibly, additional penalties, from accruing. You may pay the proposed amount or, if you return the Response form without payment, you can wait until the IRS adjusts your account and sends you a bill.
Additionally, this letter states that you have the opportunity to agree or disagree with the proposed change. If you partly agree with the changes proposed in the notice or fully disagree with all the changes specified in the notice, you can do so by checking the ‘Disagree’ box on the response form. You must also provide a clear written explanation + documentation and evidence (if required) to support your claims and submit the appeal before the IRS deadline. In some cases, the data provided to the Internal Revenue Service (IRS) by taxpayers does not match that of the recipient’s tax return.