For example, the income you listed on your return might not match the income on your W-2 that was provided to the IRS by your employer. You should verify the information provided by the IRS, compare it with your documentation, and either agree and pay for the proposed changes or disagree and provide supporting details. 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.
Respond to the Notice Within the Specified Timeframe
In conclusion, responding to an IRS CP2000 notice doesn’t have to be a daunting task. Ensure you understand the information and implications, confirm your financial documents, and address the notice promptly and correctly. Whether you agree or disagree with the proposed changes, a timely and appropriate response is critical to preventing further issues with the IRS.
Don’t have time to deal with the CP2000 yourself?
Once you respond to your CP2000, the IRS will send you a new, separate tax bill. 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. Once you have drafted your response and gathered all of the necessary documentation, you what is a cp2000 notice should submit your response to the IRS. You may submit your response by mail or electronically, depending on the instructions provided in the notice. Once you have gathered all of the necessary information and determined whether the discrepancies are accurate, you should draft your response to the IRS.
Resolve an IRS CP20000 Notice: Actions and Timing Explained
- 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.
- If the IRS determines that you owe additional taxes or penalties, you should pay them as soon as possible to avoid any further interest or penalties.
- Work with a licensed tax professional who does tax resolution work.
- 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.
- However, the IRS might determine that you still have some owed taxes, and you’ll be given a deadline by which to pay them.
Determine if you agree or disagree with the proposed changes and how you should respond. On the Response form, indicate whether you agree or disagree with all, some, or none of the proposed changes. If you would like to authorize someone other than yourself to contact the IRS concerning the notice, include the information requested in the Authorization section of the Response form. Filing online can help you avoid mistakes and find credits and deductions you may qualify for. Ensure you respond to the notice timely even if you pay online or set up a payment plan. If you disagree or partially agree with the proposed changes, the IRS will assess your explanation and supporting documents.
- If you’ve lost the envelope or it wasn’t enclosed, please send your response to the address listed on the first page of the Response form.
- Responding to the IRS letter CP2000 can be a daunting task, but it is important that you take the necessary steps to address any discrepancies found by the IRS.
- 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’ve received a CP2000 notice from the IRS and need help sorting out your taxes, Bench (that’s us!) has a specialized team who can help.
- If the IRS relays that you’ve overreported, you may end up with more money back in your pocket.
If the agency accepts your explanation, it will send you a letter stating that they have put the matter to bed. A small percentage of taxpayers who submit an offer in compromise are successful. Partnering with a reputable tax professional is crucial if you want the IRS to accept your OIC proposal. The Internal Revenue Service (IRS) sends this letter if the information on your return differs from the information the agency received from third parties. You may agree with the amount indicated on the IRS CP2000 notice but find you are unable to pay.
It might increase or decrease the amount of tax you owe or not change it at all. 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. The letter shows who reported the item that doesn’t match your return, the amount of the item, and explains how the item affects your tax return. The IRS is proposing to correct your return by adjusting the items listed in Letter CP 2000 unless you provide the IRS with information that shows why the amounts on your return are correct.
- In that case, the “shown on return” column that corresponds to nonemployee compensation will show a zero amount.
- If you cannot pay in full, you may want to consider the IRS’s payment plan.
- These tax resolution specialists can help with any aspect of your taxes, including representing you before the IRS.
- Check your records against the IRS’s explanation in the notice to determine why the discrepancy arose.
- 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.
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 can’t meet the deadline, call the number on the notice to ask for additional time to send a response. If you do not respond, the IRS will send out letter 3219A Notice of Deficiency. If the IRS determines that you owe additional taxes or penalties, you should pay them as soon as possible to avoid any further interest or penalties.