Understanding the CP-2000 Notice
Updated: Jan 21
What the CP-2000 notice is about
The income or payment information the IRS has on file doesn't match the information reported on your tax return. This discrepancy may cause an increase or decrease in your tax, or may not change it at all.
If you receive one of these notices and want help, you should talk to a Tax Attorney who can help you with a CP-2000 notice.
Why did I receive the CP-2000 notice?
The 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. A Tax Attorney can walk you through how to resolve this discrepancy.
Is the notice a bill?
No, it is a proposal and informs you about the information the IRS received, and how it affects your taxes. A Tax Lawyer can help you review this information and respond to the IRS.
The notice says my taxes will increase. Will I be charged interest on the money I owe?
If you owe money, interest accrues on your unpaid balance until you pay it in full. A tax Attorney can help you make that determination or argue your position to the IRS or the United States Tax Court.
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. If you need assistance with the notice then a tax attorney can help.
What happens if I can't pay the full amount I owe?
The Prescott Law Firm, LLC may be able to assist you in setting up a payment plan with the IRS.
What you need to do
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. A Tax Attorney can help you reply to a notice like this.
If you agree with the IRS notice, follow the instructions to sign the Response form and return it in the envelope provided. The IRS requires both spouses' signatures if you filed married filing jointly. If you have any questions about this process, a tax law firm can help you respond.
If the information another party provided to the IRS is wrong, contact the business or person reporting the information. Ask them to send you a corrected statement, then send the IRS a copy. If the reported information is incorrect and you need help a Tax Attorney can help you resolve the issue with the IRS.
You may want to
Make sure your other returns don't have the same mistake.
Contact the IRS with any unanswered questions you have or if you need additional time to respond to the notice. A tax lawyer can help protect you when you have that conversation with the IRS.
Keep a copy of the notice for your files.
Correct the copy of your tax return that you kept for your records.
Learn more about Offers in Compromise if you cannot pay the full amount of taxes owed. The Prescott Law Firm can help you with this.
Frequently asked questions
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 the notice, follow the instructions to sign the Response form and return it to the IRS in the envelope provided.
If you have additional income, credits or expenses to report, you may want to amend your tax return. The Prescott Law Firm can help you with this amendment.
Why did it take you so long to contact you about this?
The 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.
Tips for next year
You can avoid future 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.
If you are in Lexington, Columbia, or Irmo and you receive a CP-2000 IRS Notice, call The Prescott Law Firm, LLC today for help!