When submitting your tax return, the ideal outcome is that your return will be processed, and you will either pay your taxes or receive a refund for the amount you overpaid. However, even with the best laid plans, mistakes and oversights do occur. When the IRS receives a tax return that has different information from that reported by other entities such as your employer, bank, or loan holders, you may receive an IRS Notice CP2000.
What Is a CP2000 Notice?
The CP2000 Notice is a document the IRS sends to let you know they found discrepancies in your tax return. The notice gives you a chance to correct and clarify the information. It will outline the specific issues with your return and provide the next steps to take for your tax return to be amended or the issue resolved quickly. It can be unsettling to receive any IRS notification but try not to worry when you receive a CP2000 Notice. This isn’t an audit; it’s simply a request for clarification.
What Triggers a CP2000 Notice?
Taxpayers who receive these notices generally don’t end up owing anything extra or paying a penalty. It will all depend on your situation and what the IRS is claiming. It’s important to follow all necessary instructions and review your records carefully.Taxpayers who receive these notices generally don’t end up owing anything extra or paying a penalty. It will all depend on your situation and what the IRS is claiming. It’s important to follow all necessary instructions and review your records carefully.
What Should I Do If I Receive a CP2000 Notice?
In the CP2000 Notice, the IRS will usually suggest changes that can affect your refund or taxes owed. If you disagree with these changes or any of the other information provided, you have 30 days from the date of the letter to respond. Read the letter thoroughly, so you don’t miss any of the details or instructions. It is a good idea to contact the IRS at the phone number provided in order to get a clear understanding of the discrepancies and proposed changes.
1. Read the Letter Thoroughly
2. Sign If You Agree With the Notice
3. Respond If You Disagree With the Notice
4. Contact the 3rd Party
5. Report Identity Theft
There is a lot of identity theft surrounding the tax system. You may receive an IRS CP2000 Notice that reflects inaccurate information about you if someone filed a fraudulent tax return using your Social Security number. Immediately send a completed copy of Form 14039, Identity Theft Affidavit to the IRS if you suspect this is the case. Visit the IRS’s Identity Theft Central page for further instructions, including other ways to report tax crimes.
Keep in mind that if your response does not provide the IRS with sufficient information to resolve the issue, you may receive an IRS Notice CP3219A, Statutory Notice of Deficiency. With a CP3219A, the IRS provides additional information about the tax change and offers you the option to challenge the decision in tax court. If you choose to go this route, contact a tax attorney right away.
6. If You Aren’t Sure, Get Help
Potential Outcomes of Resolving CP2000 Notices
You can also include a request for an installment agreement or extension when you reply, options that are discussed more below.
The other possible outcome to resolve the CP2000 Notice is the IRS making your requested changes to your tax return. The IRS may accept your explanation and correct the records if you disagreed with the notice and provided details that proved your position. Just remember not to file an amended tax return because the IRS will make any corrections.
You can always appeal the decision if you disagreed and the IRS rejects your explanation. Work with a tax attorney to learn more about all the potential outcomes of resolving a CP2000 Notice.
Additional Considerations about Notice CP2000
Check Your Other Tax Returns
Ask for an Extension
Maintain Complete Files
If You've Sold Your Home in the Last 12 Months
Failing to report income earned from the sale of your home or other property can prompt a CP2000 Notice. The IRS still requires you to report this type of income on your tax return. This is one of the most common reasons for CP2000 Notices.
Submitting Power of Attorney
Be sure to submit Form 2848 the Power of Attorney Form or fill out section 3 of the response form to authorize your attorney or other involved parties to contact the IRS on your behalf.
Requesting a Payment Plan
FAQs About CP2000 Notices
Is a CP2000 Notice a Bill?
Can I Call the IRS About This Notice?
Should I File an Amended Tax Return When I Receive a CP2000 Notice?
Will I Have to Pay Interest?
How to Avoid Future Problems with IRS CP2000 Notices
Maintain Complete Records
Obtain All Documentation
Document All Income
Follow Return Instructions
Use Online Filing Services
What to Know About Fraudulent CP2000 Notices
Tax scammers have been known to send out fraudulent CP2000 Notices in attempts to obtain personal information and money from taxpayers. These fake notices will have an illegitimate address for the IRS; this is a huge red flag. They may also ask you to write a check to the IRS for payment. Please note: Any legitimate payments to the IRS will be made to the United States Treasury.
These fraudulent documents will often ask you to send payment immediately, without giving you the option to dispute the claims. The IRS will always allow you to dispute claims and pay only when the matter has been resolved.
You can call the IRS or visit the Understanding Your IRS Notice or Letter page to determine whether your notice is legitimate or not. Simply enter your form number to pull up the record. You can also contact a tax attorney for professional assistance in these matters.
Get Help With Your CP2000 Notice
When you receive a CP2000 Notice from the IRS, contact a tax attorney for assistance. Silver Tax Group is dedicated to helping our clients navigate even the most complex tax questions, investigations, tax returns, and legal proceedings. Our experienced team has the knowledge and experience necessary to guide you in the right direction and get the matter resolved quickly. To learn more about ways that we can help with your CP2000 Notice, contact us today!
Did You Recently Receive a CP2000 Notice?
We’ll discuss your current financial situation and put a plan together to resolve any potential issues and get you in good standing with the IRS.