CP2000 Letter Response to IRS

The CP2000 is the most widely issued AUR notice. It is not a bill but does provide a proposed change to tax liability. We’re asking you to verify the income, credits and deductions reported on the tax return because they are different from the information received from other sources. The proposal is based on comparison of these items.

 

What is a CP2000 Notice?

The CP2000 would also reflect any corrections made to the original return after it was processed. The CP2000 notice summarizes the income, payments, credits and deductions reported by IRS payers, but not identified or fully reported on the tax return. It provides the name of the payer; the payer’s identifying number; what kind of document was issued, such as a W-2 or 1099; and the Social Security number of the person to whom it was issued.It is important to read and understand the notice and what issue or issues are being questioned.

 

Contacting IRS About CP2000

If you still have questions, please call the toll-free number on the top right of the notice or letter. Similar to Corr Exam, the Statutory Notice of Deficiency, or “90 day” letter, that is issued if no response is received to the prior notices will be sent via certified mail. It contains a copy of the CP2000 notice for your reference. The timeframes in AUR are similar to Correspondence Exam. If there is no response to the stat notice, the case would default and progress to Collection.

 

Responding to a CP2000 Notice from IRS

As in Corr Exam, you do not need to file an amended return in response to the CP2000. However, if you decide that an amended return is necessary, please ensure it is signed and sent to the correct address with the response page from the AUR notice. Sending an amended return to the Submission Processing site could delay processing of your case. Not signing the amended return could also delay the processing and resolution of the case. If you agree with the CP2000, check box A on the CP2000 response page and return it with payment made payable to the Department of Treasury. If you agree with the increase, but you can’t pay the entire balance, you may be eligible for an installment agreement. If you partially agree or disagree with the CP2000, check the corresponding box on the form and provide a narrative with backup documentation.

 

Tips on Responding to CP2000

It is important to remember that additional interest and applicable penalties will accrue on the account during the period of the extension if the tax increase is correct. In your response, there is some key information to note:

  • Do not net amounts. Income should be reported in full with expenses or losses shown separately, so we know how the taxable amount was determined.
  • Do not group income amounts. List multiple pairs and amounts when reporting an income type or deduction that is a total of more than one source.
  • Provide corrected payer documents. If you receive a corrected 1099 or W-2, please attach it to your original return or provide it with your response.
  • Report income on the correct line. Ensure income is reported on the correct line of the tax return designated for that income item. When reporting items on a line without a specific income designation, it is important to clearly identify the source of the reported amount. This is particularly important on line 21, “Other income,” of the Form 1040.
  • Include all backup schedules. These schedules detail computations of amounts shown on the tax return.

 

You may want to consult a tax lawyer if the CP2000 Notice is complicated.