Got a CP2000? We'll help you read it and draft your answer.
Got an IRS CP2000 notice? Read it before you pay.
Answer four questions. After that, we open your CP2000 with you.
Use this on the day the IRS letter arrives.
Got a CP2000? We'll help you read it and draft your answer.
Answer four questions. After that, we open your CP2000 with you.
Use this on the day the IRS letter arrives.
A CP2000 means the income on your return doesn't match what your employers, banks and other payers reported to the IRS. It isn't a bill. It's a proposed change to your return, and you get to answer it. Answer by the date printed on your notice. The IRS asks for an answer within 30 days of the notice date, or 60 days if you live outside the United States.
It's normal to feel scared when this letter arrives. Here's what it is, what the date means and what happens if you don't answer.
The IRS compares your return with the W-2s, 1099s and other forms that payers send in. When they don't match, it sends a CP2000 that shows the change it wants to make. The change can raise your tax, lower it or leave it the same. It isn't a bill yet. The IRS hasn't made the change, and it's waiting for your answer.
Your notice gives the date your answer is due. That's usually 30 days from the notice date, or 60 days if you live outside the United States. If you need more time, you can ask for it by mail, by fax or by calling the number on the notice. Ask early, and keep a note of when you asked.
If the IRS doesn't hear from you by the date, it keeps going with the change. It sends a statutory notice of deficiency by certified mail. That letter gives you 90 days to go to the U.S. Tax Court. If you don't, the IRS assesses the tax and sends a bill. Interest keeps adding up until the balance is paid.
The call is 30 minutes, and it is free. On the call, Steven Palmieri reads the notice and that year's return side by side. He tells you whether the IRS is right, wrong or partly right about the income on the notice. You leave knowing what to put in your response and which documents to attach. You also learn what to change so next year's return matches the forms before it's filed. That planning is part of the monthly bookkeeping and tax work. Other firms sell a plan like it as a $15,000 project. You will be talking to the Steven Palmieri practice.
The response form gives you three ways to answer. Pick the one that fits what you find when you check the notice against your return.
Sign and date the response form. If you filed a joint return, both of you sign. Send it back by the date on the notice. You can pay the amount now, ask for a payment plan or wait for the bill. Interest keeps growing until the balance is paid, so waiting costs more.
Mark the box that says you don't agree with some or all of the changes. Then explain which items are right and which aren't. Send copies of the papers that back up each item you dispute. The IRS can send a new notice that covers only the items still open.
Mark the box that says you don't agree, and write a signed statement that explains why. Send copies of records that show your numbers are right, such as a corrected 1099. If the IRS accepts what you sent, it mails you a letter saying it accepts your return as filed. Keep that letter with your tax records.
It makes sense to be angry. You paid someone to get the return right. Here are three ways the numbers end up not matching.
Every W-2, 1099, 1098 and brokerage statement you get also goes to the IRS. Checking those forms against the finished return takes about an hour. On many returns, that hour gets skipped. That skipped hour is why this letter showed up.
The return was filed, and then the calls stopped. Nobody asked what else came in your mail after it was filed. Now the notice is in your hands, and the person who prepared the return is hard to reach.
Signing the form and paying can end the worry in ten minutes. But some people pay tax that way on income that was already on the return in another place. Some pay on income that was reported twice. Others pay tax on the full price of something they sold because the IRS never saw what they paid for it. Have someone check the notice before you agree.
The IRS doesn't call it one. It calls it a tax return review by mail. A computer program compares your return with the forms your employers, banks and other payers sent in. Then an IRS examiner looks at the mismatch and sends the notice. You answer it in writing. Getting a CP2000 doesn't take away your right to disagree with it.
Only if the notice is right. You can agree with all of it, agree with part of it, or disagree and send papers that back up your numbers. Check the notice against your return before you decide. The IRS builds the proposal from forms. Forms can be sent twice, show up in the wrong year, or be missing what you paid for something you sold.
Yes, it can. The IRS says the difference it found may raise your tax, lower it or not change it at all. Some notices show a refund. If yours does and it asks for your signature, sign the form and send it back. The IRS says to expect the refund in 6 to 8 weeks if you don't owe other debts it has to collect.
Go by the response date printed on your notice. The IRS asks for an answer within 30 days of the notice date, or 60 days if you live outside the United States. If you answer by then, you can still argue with the proposed change. If the date passes without an answer, the IRS sends a statutory notice of deficiency by certified mail. That letter gives you 90 days to file a petition with the U.S. Tax Court. If you don't, the IRS assesses the tax and sends you a bill.
You can ask for it. Send your request by upload, fax or mail, the same ways you'd send an answer. You can also call the number on the notice. More time isn't automatic, so ask well before the date. Write down when you asked and who you spoke to.
We need every page of the CP2000. That includes the response form and the pages that list the forms the IRS received. We also need your return for the tax year on the notice. With both in front of us, 30 minutes is usually enough to find where the gap started.
Start with the response form that came with your notice. Fill it in and sign it to show whether you agree, partly agree or disagree. If you disagree with anything, add a signed statement that explains why. Attach copies of the papers that back you up. That could be a corrected form, a record of what you paid for something you sold, or the page of your return where the income already shows up. Send copies and keep your originals. On the call, we help you put this package together.
Use the mailing address and fax number printed on your notice. The mailing address is in the top left corner of the first page. The IRS also lets you upload your answer with its Document Upload Tool, and it says that's the fastest way. The tool takes photos or scans as JPG, PNG or PDF files. The right address depends on which IRS office sent your notice, so an address from a forum may be wrong for yours.
Yes, if you filed a joint return. The IRS needs both signatures on the CP2000 response form, whether you agree or disagree.
Yes. The amount on a CP2000 usually includes interest from the return's due date to 30 days after the notice date. Penalties may also apply, even when the notice doesn't show them. If you agree and pay within 30 days, you stop more interest from adding up, and possibly more penalties. If you disagree but still want to stop interest, the IRS lets you pay the amount and mark it as a "6603 deposit".
Sign the response form and send it back by the date anyway. You can apply for a payment plan, which the IRS calls an installment agreement, with Form 9465. If the plan is approved, you may be charged a user fee. If you agree but don't pay or set up a plan, the IRS sends you a bill.
Usually not. The IRS asks you to answer the notice itself. It says you don't need to amend if you agree and have nothing else to report. File a Form 1040-X only if the notice is right and you also have other income, credits or expenses to report. In that case, write "CP2000" at the top of the 1040-X and send it with your response form. A 1040-X sent in place of a response can make you miss the date.
Check your returns for your other tax years. If one has the same mistake, the IRS says to file an amended return for that year. Doing it now can prevent or reduce penalties on that year.
The IRS normally contacts you the first time by U.S. mail. It sends email or text messages only if you signed up for them. A direct message on social media is never from the IRS. A real CP2000 shows the tax year and lists each form it compared, with the payer's name. If you aren't sure, look up the notice number on irs.gov before you reply or pay.
No honest person can promise that. If the IRS is right, the tax is owed. Then the goal is to pay only the amount you really owe. We read the notice against your return and help you draft a response from your documents. We can also keep your books each month and plan your taxes, so the same letter doesn't come back next year.
No. Steven Palmieri isn't a CPA, an enrolled agent or an attorney. He doesn't speak to the IRS for you or go with you to an appeal. He helps you read the notice and draft your answer, and you sign and send it yourself. If you want someone to deal with the IRS for you, you can name them in the Authorization section of the response form. You can also give a tax professional a power of attorney on Form 2848. You may also qualify for free help from the Taxpayer Advocate Service or a Low Income Taxpayer Clinic.
They are the letters that can come before and after a CP2000. A CP2501 can come first. It asks about the same kind of mismatch before the IRS proposes a change in tax. A CP3219A is a statutory notice of deficiency. It can follow a CP2000 that was never settled. It gives you 90 days and the right to file a petition with the U.S. Tax Court. It's easier to settle a mismatch at the CP2000 stage, before the date on your notice passes.