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April 7, 2017


CP 2000 Notices

As the tax season approaches, millions of taxpayers will receive unexpected notices from the IRS. Often, these notices, technically referred to as Notice CP 2000, state that the income or other information provided on the previous year’s income tax return has been adjusted by the IRS. This is the most common notice sent out to taxpayers by the IRS.

According to the IRS, Notice CP 2000 simply denotes proposed changes to your tax return. The changes are based on the IRS comparing the income, payments, credits and deductions on your returns with information provided to them by employers, banks and other payers through W-2, 1099 and other income reporting statements.

Essentially, the notice is a request to verify the amounts listed on your return because third parties have provided the IRS with different information.

What Should You Do?

Though the notice itself is not a bill, it is not a letter to be ignored. It is important to review the accuracy of your returns and respond by the due date listed on the notice. It is possible to get an extension in some cases, but you must promptly request more time to review your records. If you do not respond, the IRS will assume they are correct and process the adjustment along with any applicable interest and penalties.

As one might expect, these notices often contain errors. Computers review amounts provided to the IRS by third parties and compare those amounts with the total you have listed on your return. When a discrepancy is detected, a notice is generated and mailed out to the taxpayer.

A recent Forbes Magazine article listed some common errors found on these notices and the amounts the IRS suspected the taxpayers owed. Amounts varied from a few hundred dollars, to one case where they requested a payment of over $54,000 from one taxpayer. In some cases, the IRS received incorrect information from third party employers and in others the agency itself improperly calculated the tax that was due. In all cases reviewed in the report, the amount actually due from the taxpayer was far less than the amount requested by the IRS.

Working With an Attorney

Dealing with the IRS on your own can be a stressful and overwhelming experience. If you have received a notice from the IRS relating to back taxes or proposed changes to your tax returns, it is important not to panic. Contacting an experienced attorney knowledgeable in tax matters can also be a helpful step in determining what amount, if any, that you owe.