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Understanding and Responding to the IRS CP2000 Notice

what is a cp2000 notice

If the reported information doesn’t match the information that IRS already has on file, the system automatically notifies the filer about the mismatched information by generating a CP2000. 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. If the information displayed in your CP2000 notice is correct, you generally do not need to amend your tax return. We recommend speaking to a tax professional anytime you are unsure if you need to amend or not.

Payment Options for CP2000 Notices

In a nutshell, when there is an income information mismatch in the returns filed by you and the information that IRS already has on file, the AUR generates an automatic CP2000 notice. In short, this notice is an auto-generated report that means that you have made a mistake in the reporting of your income on your tax return. The Taxpayer Advocate Service is an independent organization within the IRS that helps taxpayers and protects taxpayers’ rights. If you qualify for our assistance, which is always free, we will do everything possible to help you.

Things To Know If You Disagree With The IRS On Your CP2000 Notice

what is a cp2000 notice

Because a computer system generated this notice, you are not dealing with a revenue officer. Also, a reasonable response to this notice is unlikely to trigger an audit or investigation, but your return may be subject to an examination. If you don’t respond to the CP2000 notice and what is a cp2000 notice don’t file a petition with the Tax Court within the 90-day period, the IRS is free to assess tax and penalize you for negligence. If the IRS doesn’t accept your response, you will receive a letter from the IRS explaining the reasons why your response/appeal cannot be accepted.

what is a cp2000 notice

The Right to Challenge the IRS’s Position and Be Heard

Upon responding to the CP2000 notice with your explanation, you can expect to wait up to eight weeks for a response from the IRS. If you do not receive any correspondence from the IRS, contact them and request an update. However, if the IRS relays that you’ve underreported, you’ll need to act. As an independent organization within the IRS, the Taxpayer Advocate Service helps taxpayers resolve problems and recommends changes that will prevent problems. 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 the amount reported by the third party to the IRS is incorrect or does not belong to you, you may need to contact the third party and ask that the item reported to the IRS be corrected.
  • If you’ve made a mistake in your filing, you’ll need to explain your mistake.
  • 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.
  • 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.
  • We also discuss your options if you agree with the changes but cannot afford the proposed amount due.
  • CP2000 Notice is simply a document the IRS sends proposing that you revisit your claimed income, payments, credits, or deductions.

IRS CP2000 Notice – Responding to an Automated Under-Reported Letter

If you can’t pay the full amount right away, you can set up a short-term payment plan or a long-term installment agreement with the IRS. Payment plans must be repaid in 180 days or less, while installment agreements require monthly payments. While a CP2000 notice may propose changes to the tax you owe, receiving this IRS letter is not a reason to panic.

Reasons for Receiving a CP2000 Notice

IRS Taxpayer Assistance Centers are located throughout the country if you prefer face-to-face help. After submitting your response, follow up with the IRS to ensure they have received your correspondence and to check on the status of your case. Maintain records of all communication with the IRS, including copies of your response and any supporting documents you provide. They will start an investigation and may be able to resolve it that way. Still submit a response to the CP2000 within the deadline stating that you believe you are a victim of identity theft.

  • The IRS is merely notifying you that the information did not match.
  • Sometimes referred to as “phishing” scams, these are usually sent over email and include a fake CP2000 attachment.
  • Although not frequent, there are fake CP2000 notices that are sent out by scammers to gather information.
  • You can return your response by mail or fax to the return address or fax number printed on the notice.
  • 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.
  • IRS Taxpayer Assistance Centers are located throughout the country if you prefer face-to-face help.

What to Do if You Agree but Cannot Pay the Entire Amount

If that happens, you will receive another CP2000 notice containing the updated proposed amount in this case. However, if the IRS disagrees with your explanation, you will receive a letter CP3219A (Statutory Notice of Deficiency). If you receive this letter, the IRS plans to bill your account for the proposed amount, and you have 90 days to respond. It can take anywhere from a month to three years for the case to be fully resolved. We recommend that you do not simply mail the response and leave it to the IRS, but instead reach out and ensure that your notice has indeed been received and is being processed. If you allow the notice to sit without action, it can become a bill and that bill can accrue penalties and interest.

If you suspect there might be a problem with the information your employer or bank has sent the IRS, contact the business or person who reported the information to double-check. Here’s a sample response letter to the CP2000 that you can download as a Word document. If you’re not sure how to proceed, you might need a bit more time.

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