IRS CP2000 notices are one of the most common notices. You typically get a CP2000 notice when there’s a discrepancy with what you reported on your tax return and what was officially reported to the IRS by others. Usually, these notices results in an increase in the tax you owed, but sometimes there may be no change or the IRS may owe you money.
CP2000 notice IS NOT A BILL. It is a proposal. You have three options when answering a CP2000 notice, 1. agree and pay the proposed amount in full, 2. disagree and provide proof, 3. hire an accountant to figure it out for you.
If you agree with the notice, follow the instructions included on the notice and response form. If required, include a check for the amount you owe with your social security number written on the memo line. If you can’t pay the entire amount, you may be eligible for an installment agreement which can be made over the phone or online.
If you disagree with the notice, follow the instructions included on the notice and response form. Instead of sending a check, you will need to provide a statement explaining why you disagree and proof that you’re right with your response form. The IRS will then review your statement and send you another notice. It may be a few months before you receive your second notice.
If you decide to get help from an accountant, bring the notice, your tax return from the year in question, and all your supporting documents with you to your meeting. Your accountant may have you sign either the authorization on the response form or Form 2848 ( Power of Attorney and Declaration of Representative). They will do the research, write a response, and send everything to the IRS on your behalf.
Have a question about your notice? Let me know!