Nothing strikes fear in the hearts of the average, well-intended, law-abiding taxpayer like a letter that comes in the mail from the Internal Revenue Service. Many of the issed notices are just informational but appear threatening. However the CP2000 notice is one you will want to pay close attention to.
A CP 2000 notice comes from the IRS and is generated by a system mismatch of information between what has been reported directly to the IRS and what is reported on your tax return. The IRS compares the information reported by employers, banks, businesses and other payers on income documents like the Forms W-2, 1098, 1099, etc., with the income, credits and deductions you report on your income tax return.
Things to know:
A CP 2000 notice is not a bill. (*you’ll find the Notice/Letter name in the top right corner)
You need to respond to the notice usually within 30 days.
The notice may not be correct. It may be a 1099 was sent to the IRS erroneously.
The notice may be correct but how it changes your tax return may not be.
For example if you forgot to include self-employment income reported to the IRS with your tax return you may also have deductions allowed against this income.
If you did not include income from the sale of stocks the gain the IRS reports may not be correct.
If you agree completely with the notice you do not need to file an amended return.
You will be charged interest the longer you wait to pay.
You have options if you cannot pay in full.
HOWEVER, if you DO NOT AGREE or DON’T KNOW WHAT TO DO, you do not need to sign the form. You can call the IRS directly or consult a Settlement Officer at Republic Tax Relief ASAP before the notice deadline so that they can handle this matter on your behalf. You can also sign the disagreement portion of the response form however it is best to consult with a professional to ensure you fully understand what changes they are reporting.