What is IRS Notice CP2000?
We have noticed a significant increase in the number of Atlanta taxpayers receiving IRS Notice CP2000 in the mail. The IRS sends this notice when information from a third party source (such as a 1099 or W-2) does not match the information the taxpayer reported on their tax return.
Notice CP2000, also called a Notice of Underreported Income, is generated by the IRS Automated Underreported (AUR) function.
The IRS sends Notice CP2000 when a tax return’s information does not match the data reported to the IRS by third parties, such as banks, vendors, or employers. This data is typically in the form of a W-2 or 1099.
This notice is not a formal audit notification. It is simply a notice to see if the taxpayer agrees or disagrees with the proposed changes.
Taxpayers should always respond to the notice CP2000. Usually, the taxpayer has 30-days from the date printed on the notice to respond.
The IRS provides a phone number on each notice that they send out. IRS telephone assistants can explain the notice and what taxpayers need to do to resolve any issues.
The IRS will send a follow-up notice to taxpayers who do not respond to Notice CP2000, or if the IRS does not accept the additional information provided. This second notice is called a Statutory Notice of Deficiency.
The Statutory Notice of Deficiency provides detailed information about why the IRS proposes a tax change and how the IRS determined the change. The notice tells the taxpayers about their right to challenge the decision in Tax Court if they choose to do so. It is critical to respond to this notice within the required time period, in order to preserve legal rights.
To conclude, keep in mind that CP2000 mismatch notices are produced by computers and are sometimes incorrect. Therefore, carefully double check your tax returns with W-2’s, 1099’s, and other third party documents before you send in your payment.
Massey and Company CPA represents taxpayers who receive IRS Notices. To learn more, give us a call at 678-235-5460, or email us at firstname.lastname@example.org. You can also contact us through our website by visiting the home page. And you are welcome to visit us at our office in Atlanta!
Founded by Gary Massey, Massey and Company is a boutique, Atlanta-based CPA firm serving the needs of small businesses and their owners. We handle tax matters, IRS controversy, tax debts, back taxes, bookkeeping, and accounting. Our offices are in the Buckhead neighborhood of Atlanta and we welcome face-to-face visits.
Massey and Company CPA
P.O. Box 421396,
Atlanta, GA 30342