A IRS CP2000 notice is a specific type of notice sent by the Internal Revenue Service
(IRS) to taxpayers. The purpose of this notice is to inform taxpayers that there is a
discrepancy or inconsistency between the income, payments, or credits reported on
their tax return and the information the IRS has received from other sources, such as
employers, banks, or financial institutions.
When the IRS identifies such a discrepancy through their automated matching system,
they send the CP2000 notice to the taxpayer. The notice includes details of the
discrepancies found, along with proposed changes to the taxpayer’s return. It also
explains the amount of additional tax, penalties, and interest that may be due as a result
of these proposed changes.
Common reasons for receiving a CP2000 notice include:
- Unreported income: The IRS may have received information indicating that the
taxpayer failed to report all of their income, such as wages, interest, dividends, or
other taxable income. - Incorrect deductions or credits: The taxpayer may have claimed deductions or
credits that they were not eligible for or miscalculated their eligible deductions or
credits. - Inaccurate or missing information: The IRS may have identified errors or
omissions in the taxpayer’s return, such as missing Social Security numbers or
incorrect taxpayer identification numbers.
It’s essential for taxpayers who receive a CP2000 notice to carefully review the
information provided in the notice and compare it to their tax return. If they agree with
the proposed changes, they can follow the instructions in the notice to sign and return
the response form, or they can pay the additional tax due.
However, if the taxpayer disagrees with the proposed changes, they should respond to
the notice by providing documentation or an explanation to support their position. It is
crucial to respond within the specified time frame mentioned in the notice to avoid
further penalties and interest.
If you receive an IRS CP2000 notice, it is advisable to seek assistance from a tax
professional or tax advisor to ensure the appropriate steps are taken to resolve the
matter with the IRS.
