When a tax return’s information doesn’t match data reported (such as W2’s, 1099’s, 1098’s) to the IRS by employers, banks, investment broker and other third parties, the IRS will send a letter / notice to the taxpayer. The letter is called an IRS Notice CP 2000, and it gives detailed breakdown information about issues the IRS identified and provides steps taxpayers should take to resolve those issues.
The taxpayer must address these issues timely, failure to do so will result in an assessment of additional taxes, interest and penalties. It’s almost like a “grey-area” correspondence audit.
Get professional help with CP 2000 issues at 1-877-788-2937.
The IRS reminds taxpayers this letter isn’t a formal audit notification but a letter to see if the taxpayer agrees or disagrees with the proposed tax changes. Taxpayers should respond to the CP2000 letter, usually within 30 days from the date printed on the letter.
The IRS provides a phone number on each letter. IRS telephone assistors can explain the letter and what taxpayers need to do to resolve any discrepancies.
The IRS will send another letter to the taxpayer if the taxpayer doesn’t respond to the initial notice or if the IRS can’t accept the additional information provided. That follow-up letter is called an IRS Notice CP3219A, Statutory Notice of Deficiency. This letter gives detailed information about why the IRS proposes a tax change and how the agency determined the change. The letter tells taxpayers about their right to challenge the decision in Tax Court if they choose to do so. Even if they decide not to go to Tax Court, the IRS will continue to work with the taxpayer during the statutory notice time frame to help resolve the issue.
What you need to do when you receive a CP 2000 notice
- Read your notice carefully. It explains the information the IRS received and how it affects your tax return.
- Complete the notice Response form whether you agree or disagree with the notice. The response form explains what actions to take. (Your specific notice may not have a Response form. In that case, the notice will have instructions on what to do).
- If you agree with our notice, follow the instructions to sign the Response form and return it to us in the envelope provided. IRS require both spouses’ signatures if you filed married filing jointly.
- Contact the business or person reporting the information, if the information they provided to us is wrong. Ask them to send you a corrected statement, then send the IRS a copy.
FAQs CP 2000 notice help
Why did I receive the notice?
IRS received information from a third party (such as employers or financial institutions) that doesn’t match the information you reported on your tax return.
Is the notice a bill?
No, the notice is a proposal and informs you about the information we have received, and how it affects your tax.
What do I need to do?
Complete the notice Response form. (Follow the notice instructions if your notice doesn’t have a Response form.)
What do I do if the information is wrong or if I disagree?
The notice Response form has instructions on what to do if the new information is wrong. You also may want to contact whoever reported the information and ask them to correct it.
The information is wrong because someone else is using my name and social security number. What can I do?
You can complete and send to IRS Form 14039, Identity Theft Affidavit. You can also go to the IRS identity theft information web page to find out more about what you can do.
I reported the information but I reported it incorrectly. Can I call you to correct my return?
We can generally accept your information over the phone for incorrectly reported information.
Do I need to amend my return?
If the information displayed in the CP2000 notice is correct, you do not need to amend your return unless you have additional income, credits or expenses to report. If you agree with our notice, follow the instructions to sign the Response form and return it to us in the envelope provided.
If you have additional income, credits or expenses to report, you may want to complete and submit a Form 1040-X, Amended U.S. Individual Income Tax Return. You can get help at an IRS Taxpayer Assistance Center or hire a licensed power of attorney to represent you.
If you choose to file an amended return, write “CP2000” on top of your return and attach it behind your completed Response form.
How can I get a copy of my original return?
You can request a tax return transcript on IRS “Get Transcript” page. You can also get one by calling IRS automated phone application at 800-908-9946 or by completing and sending us a Form 4506-T, Request for Transcript of Tax Return.
If a transcript won’t do, ask for a copy of your return from your tax preparer if you used one. Otherwise, you can get a copy of your return by completing and sending to IRS Form 4506. IRS charge a fee for tax return copies.
How can I find an IRS Taxpayer Assistance Center?
IRS have centers located throughout the country. IRS website has directions on how to find the center nearest to you.
Why did it take IRS so long to contact me about this matter?
IRS computer systems match the information you report on your tax return to information reported by employers, banks, businesses, and others. This matching takes several months to complete.
The notice says my taxes will increase. Will I be charged interest on the money I owe?
Yes, interest accrues on your unpaid balance until you pay it in full.
What happens if I can’t pay the full amount I owe?
You can negotiate a payment plan with IRS if you can’t pay the full amount you owe.
Tips for next year
You can avoid future CP 2000 problems by:
- Keeping accurate and full records.
- Waiting until you get all of your income statements before filing your tax return.
- Checking the records you get from your employer, mortgage company, bank, or other sources of income (W-2s, 1098s, 1099s, etc.) to make sure they’re correct.
- Including all your income on your tax return.
- Following the instructions on how to report income, expenses and deductions.
- Filing an amended tax return for any information you receive after you’ve filed your return.
Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions you may qualify for. In many cases, you can file for free.
Your Rights As a Taxpayer – CP 2000 recepient
Some of your most important rights as a taxpayer are listed below:
The Right to Be Informed
Taxpayers have the right to know what they need to do to comply with the tax laws. They are entitled to clear explanations of the laws and IRS procedures in all tax forms, instructions, publications, notices, and correspondence. They have the right to be informed of IRS decisions about their tax accounts and to receive clear explanations of the outcomes.
The Right to Quality Service
Taxpayers have the right to receive prompt, courteous, and professional assistance in their dealings with the IRS, to be spoken to in a way they can easily understand, to receive clear and easily understandable communications from the IRS, and to speak to a supervisor about inadequate service.
The Right to Pay No More than the Correct Amount of Tax
Taxpayers have the right to pay only the amount of tax legally due, including interest and penalties, and to have the IRS apply all tax payments properly.
The Right to Challenge the IRS’s Position and Be Heard
Taxpayers have the right to raise objections and provide additional documentation in response to formal IRS actions
or proposed actions, to expect that the IRS will consider their timely objections and documentation promptly and fairly, and to receive a response if the IRS does not agree with their position.
The Right to Appeal an IRS Decision in an Independent Forum
Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties, and have the right to receive a written response regarding the Office of Appeals’ decision. Taxpayers generally have the right to take their cases to court.