The IRS is merely notifying you that the information did not match. The notice doesn’t necessarily mean that the IRS is trying to fine you with penalties. It’s when you ignore a CP2000 the IRS penalizes you for willful disregard of underreporting. 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.
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Remember, amending your return after a what is a cp2000 notice is not an admission of guilt. It’s just a way to make things right and get back on track with the IRS. View our interactive tax map to see where you are in the tax process.
CP2000 notices are computer-generated
And Topic no. 308 for more information about amended returns. If you agree and would like to apply for an installment agreement plan by mail, send your signed response form and a completed Form 9465, Installment Agreement Request PDF. Our computer systems match the information you report on your tax return to information reported to IRS by third parties, such as, financial institutions, employers, and other businesses.
Don’t have time to deal with the CP2000 yourself?
- To ensure the information is sent to the proper area for processing, mail or fax the information to the address or fax number shown on the notice.
- Include your phone number with area code and the best time of day to call.
- 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.
- You can make your payment by mailing a check to the “United States Treasury” if the taxpayer agrees additional tax is owed.
- The adjustment may result in additional tax owed or a refund of taxes paid.
- Most often a CP2000 is triggered by a 1099 or W2 that was reported to the IRS, but which you did not include in your tax return.
Book a free call to learn how we can help you and discuss your options for navigating your CP2000 notice. If your CP2000 doesn’t come with a response form, it might come with alternative instructions for responding to the IRS. Usually, it means that you didn’t report all of your income properly. It could mean you underreported income for your self-employment taxes or freelance work you did as an independent contractor, for example.
- It’s important to read the notice carefully because it provides instructions about what to do next.
- If you’re unsure about how to respond to a CP2000 or have complex tax issues, consider seeking the help of a qualified tax professional, such as a CPA or enrolled agent.
- Secondly, you can start reviewing the issues flagged by the IRS.
- The IRS website recommends writing “CP2000” at the top of your return and attaching it behind your completed response.
- 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.
Don’t file an amended return (Form 1040-X) for the tax year shown on page one of your notice. Once we receive your response, we’ll make the corrections for you. If you notice the same type of error occurring in another tax year, file an amended return for that year to prevent or reduce the accrual of penalties.
What if the information the IRS has on file is incorrect?
It’s quite common to get one, and they don’t always result in an increased bill. If we don’t hear from you by the response date on the notice, we’ll send you a Statutory Notice of Deficiency. Our customer success team helps 100,000+ businesses find the right solutions for their inquiries. You too can resolve any issues instantly with a simple consultation.
Most common events that frequently result in a CP2000 notice
- CP2000 notices are output by a computer system that detects something is off with your filed tax return.
- We can also help you enlist expert support to negotiate with the IRS.
- It’s quite common to get one, and they don’t always result in an increased bill.
- If you disagree, explain why you disagree and provide any documents or information that supports your position.
- Below we have sample CP2000 response letters that you can use to edit and send out for your response.
You can resolve any issues at this point without further escalations. Most likely, the IRS staff wants to help you discuss the changes proposed in the notice. If you’re still not satisfied with the resolutions offered by the examiner, you can ask to speak to the manager.
- For example, if your Form W-2 indicates that you earned $25,000 in wages, but you reported $24,000 on your Form 1040, you’d likely receive a CP2000.
- Our customer success team helps 100,000+ businesses find the right solutions for their inquiries.
- You too can resolve any issues instantly with a simple consultation.
- If you agree and would like to apply for an installment agreement plan by mail, send your signed response form and a completed Form 9465, Installment Agreement Request PDF.
- When you’ve put in hours of work into preparing and filing your 1099 information forms, the only thing you look forward to is a clear report from the IRS.
This system automatically reads and validates the returns you file to match the income information the IRS already has on file. If the income information you report, matches the IRS records, the returns will be processed for the next steps. 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. Keep accurate records throughout the year, and cross-reference your records with any 1099s or other income documents you receive.
I’m worried I made the same mistake on another return. What should I do?
If it does not change the tax balance higher or lower, you can often call in and get the adjustment. Getting through to the IRS can be difficult sometimes and it may be easier to just mail a response. If the tax balance changes based on the information you are going to provide, you or your representative need to mail in response. 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.