What is an IRS Notice CP2000?
The IRS Notice CP2000 is a letter sent to notify a taxpayer that the income or payment information the IRS has on file does not match the information reported on the tax return. This discrepancy may cause an increase or decrease in your tax or may not change it at all.
Why did the IRS send you a CP2000 Notice?
- The IRS received information from a third party (such as employers or financial institutions) that does not match the information you reported on your tax return.
What should you do next?
There are multiple options of how to respond to this notice.
- If you believe that the changes made are correct and you have the available funds to pay it, then you should send a check for the full amount to the IRS per the instructions listed on the CP2000.
- If you believe the proposed changes were made in error, you will need to prepare a response to the IRS with supporting documentation proving your contention. If the IRS accepts your explanation, the IRS will correct your return..
- If you agree with the preposed changes, but are not able to pay the full balance listed on the CP2000 there are a few options available to you.
- Installment Agreement – a monthly payment program.
- Offer in Compromise – a one-time lump sum payment negotiated down from the current amount you owe based on your assets and your ability to pay.
- CNC (Currently not Collectible) – this puts you in a not collectible status with the IRS and requires you provide a full financial profile to the IRS.
- First time penalty abatement – this can lower the amount you owe by discharging penalties acquired for not paying the IRS in a timely manner. (Must meet eligibility requirements.)
If you have received a IRS Notice CP2000 or currently owe taxes to the IRS or a State Tax agency, please CONTACT US to discuss how we can assist in resolving your tax debt. Britt & Burroughs is a Tax Law Firm that focuses its practice on settling tax debts.