I received a CP2000 notice from the IRS. Now what?

April 30, 2020 by Robin Scott-Hutchens, EA
Woman reading CP2000 letter from the IRS

Few things will get your heart racing in a negative way like opening your mailbox to find a letter from the IRS inside. Your first instinct might be to bury it in a drawer without opening it. If you don’t open it, they don’t know you received it and will not be able to do anything about it. Right? Wrong.

The first step toward taking control is to open that envelope and see what sort of letter it is. If you have received a CP2000 notice from the IRS, it helps to understand what it is and how to handle it.

Here are a few essential things to know about a CP2000:

A CP2000 is a computer-generated notice. The IRS matching computer takes information reported by third parties (like employers and financial institutions) and compares it to the information reported on your filed tax return. If the computer cannot easily determine that your tax return and the third-party documents match up, a notice gets issued to you, the taxpayer. This notice alerts you to the difference and any potential tax that may be due because of the perceived error.

Another thing to understand about a CP2000 notice involves a keyword in that last sentence − “potential.” Nothing is set in stone yet. The IRS is giving you time to respond with your side of the story. How generous of them!

Finally, know that you do not have to handle this alone. Enlisting the help of a tax professional who is familiar with navigating this type of situation can be invaluable and relieve a considerable amount of stress. There are plans available that allow you to pre-purchase assistance like this.

But what happens if you receive a CP2000 or some other notice and have not previously purchased a package that provides such assistance? Have no fear! You can have your notice reviewed by a tax professional who can then recommend a course of action. TaxAudit provides such a service. It is called a letter evaluation. Your CP2000 notice or any other federal or state tax agency letter can be reviewed and recommendations made – all by a tax professional who is dedicated to providing a clear understanding of the road ahead. There’s no need to attempt to figure out what they are looking for or try to decipher the tax agency’s meaning. And there is no need to wait endlessly on the phone for an IRS agent to answer your questions.

So, if you receive a CP2000 notice from the IRS, the first thing to do is take a deep breath. Then seek out the expertise of a tax pro, such as the experts at TaxAudit. Don’t suffer through the process alone. There is a way to get immediate help.

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Robin Scott-Hutchens, EA
Corporate Trainer

 

Robin Scott-Hutchens is an Enrolled Agent who has worked in the tax industry for over a decade.   She has a Bachelor of Science degree in Accounting.  Her love of taxes has led her to prepare taxes with large corporations as well as private practice.  She joined TaxAudit in 2016 as an Audit Representative where she enjoyed working with taxpayers to help them navigate the stressful landscape of being audited.  She then moved to the Learning and Development Team at TaxAudit, where she now serves as a Corporate Trainer.  When she is not preparing tax returns or teaching tax concepts, she enjoys reading and writing about taxes, being outdoors, and petting any dog that will allow her to do so.


 

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