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The Dreaded CP2000 Notice

Oct 10, 2019

Many of us have gotten these – the dreaded CP2000 Notice from the IRS. You may not recognize it as a CP2000 Notice, but it is the notice that points out information provided on your return does not match with information the IRS has obtained from other sources (Forms 1099, 1099R, 1098, etc.).

Don’t panic. Half of these notices are incorrect and can be resolved in a simple response that provides an explanation that is supported by documentation. (Tip: Always send copies of documents to the IRS and mail all items to the IRS via certified mail.) Also, this is not a formal audit notification, but a notice to see if the taxpayer agrees or disagrees with the proposed tax changes. Taxpayers should respond to the CP2000 within 30 days from the date printed on the notice. If a timely response can't be made, taxpayers should call the toll-free number shown on the notice and request additional time to respond.

In the event that you do not respond in a timely manner or if your response/additional information provided is unacceptable, the IRS will, generally, send a notice called an IRS Notice CP3219A, Statutory Notice of Deficiency. This notice gives detailed information about why the IRS has proposed a tax change and how it was determined. This notice is a ticket to U.S. Tax Court for the taxpayer and the IRS. Normally, the taxpayer has 90 days (which is not extendable) to petition the Court. If the taxpayer fails to resolve the issue or petition the Court within the 90 day window, the tax is formally assessed and the IRS will commence the collection enforcement campaign -- which has given it the “toughest collection agency on earth” reputation.  

If you want to learn more about resolving issues with IRS, register for our continuing webinar series (1 hour each, from Noon to 1PM, Eastern) on Dealing with the IRS.

October 24, 2019 – Payment Plan Alternatives

November 21, 2019 – Offer-in Compromise

December 10, 2019 – Collection Due Process Hearing

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Daniel Gibson

Daniel Gibson provides accounting, tax planning and consulting services to real estate and services industries and is a member of the AICPA and New Jersey Society of Certified Public Accountants.

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