A CP2000 notice will come by mail on official IRS letterhead. Check out this IRS video to see an example and learn more about what to do. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.

• 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.
• If you don’t respond to a CP2000 notice by the deadline, the IRS will make the changes outlined in the CP2000 notice.
• The CP2000 mailing address varies based on where you live and your specific tax issue.
• Updated estimates are expected to be available by the release of the 30-comment notice from OMB.

Sometimes, the IRS can question deductions or credits you took that don’t match information statements filed under your Social Security Number. When your tax return doesn’t match income information the IRS has (like Forms W-2 cp2000 notice underreported income notice and 1099), the IRS sends a notice. It’s usually a CP2000 notice, also called an underreporter inquiry. You can speed the process up by responding to all notices quickly and waiving your right to petition the Tax Court.

How to Handle IRS CP2000 Notices (Underreporter Inquiry)

Once you agree to the tax, you’ll eventually receive a Notice of Deficiency. This notice gives you 90 days to petition Tax Court if you dispute the assessment. Once again, you can waive your right to petition the court and send the IRS your waiver if you want to speed up the process. You can see a summary of these forms in a table listing the payer, the amount you reported on your return, the amount on the form, and the difference. Keep in mind that the amount on your Form 1099 is not necessarily your taxable income if it is in the wrong amount, not correctly categorized, or offset by other deductions.

• Whether simple or complex, our team of licensed professionals are trained to work directly with the IRS, while keeping you updated every step of the way.
• Ensure you respond to the notice timely even if you pay online or set up a payment plan.
• In the end, the IRS may not process the Form 1040X as a reply.
• You can also choose to do nothing, but this will just delay the tax assessment.
• An IRS CP2000 notice typically means that the information submitted to the IRS does not match the taxpayer’s return.

Complete the form on page seven of your Letter CP 2000 to show whether you agree or disagree with the changes the IRS is proposing in the letter. If you disagree, explain why you disagree and provide any documents or information that supports your position. Make sure to submit all documents and information to the IRS by the due date to the address in the letter. If you fax the information, include your name and Social Security number or Taxpayer Identification Number on each page. If you agree with the tax changes, sign the response and return it in the
enclosed envelope.

Understanding the Changes to Your Return

Provide a signed statement explaining why you disagree and supply any documentation or missing forms to support your statement. No, the notice is a proposal and informs you of a discrepancy between the information we received, and the information reported on your tax return. If the discrepancy remains unresolved, or we don’t receive a response to the notice, you may receive a subsequent notice and a bill at a later date. This notice basically proposes taxes, and possibly penalties, you might owe for missing income on your return.

If you agree with our notice, follow the instructions to sign and return the response form in the envelope provided or fax it to the number shown on the notice. We require both spouses’ signatures if you filed married filing jointly. If you don’t respond to a CP2000 notice by the deadline, the IRS will make the changes outlined in the CP2000 notice. They will send you a bill for the taxes, interest, and penalties and will continue their collection process until you pay. If you receive a CP2000 letter from the IRS, it means your tax return did not match the information reported to the IRS by third parties. The most common situation is that you either forgot a W-2 or 1099 or did not enter the same amount as shown on the form.

Why does the IRS Send CP2000 notices?

During the 2020 and 2021 COVID-19 pandemic, the IRS didn’t follow the normal CP2000 schedule. During that time, the IRS issued millions of CP2000 notices, but they were sent at different times during the year. However, in 2022, the IRS went back to its normal three waves of CP2000 notices.

If it’s determined that they sent the IRS inaccurate information, ask them to submit the correct income and a statement as to why the error was made. Attach a copy of the corrected income document to your response to the IRS. The notice provides basic information for responding to a CP2000. You should read the notice carefully to understand what it says, where the unreported income comes from, and how it can affect tax payments. It’s helpful to attach supporting documentation, as well as a corrected tax return to help the IRS calculate the taxes you owe. But be sure to write “Corrected – for CP2000 response only – Do not process” at the top of the corrected return.