Got an IRS Letter CP2000? What to Do
Have you received a letter from the IRS saying their records do not match your tax return? You may be wondering if that means you’re being audited.
If the letter you received is a CP2000 Proposed Changes to Your Tax Return, it is not an audit. The IRS is simply trying to resolve a discrepancy in their records. They received information from a third party–like your employer or a financial institution–that doesn’t match the information you reported on your tax return.
What to Do After Getting a CP2000 Letter
Start by reading the letter carefully. The IRS will explain the information they received. Then the letter will talk about how this affects your tax return. Sometimes the information may cause an increase or decrease in your taxes. There is also a chance it won’t cause any changes.
Complete the Response Form
Next, complete the notice response form. Indicate if you agree or disagree with the notice.
If you agree to the proposed changes, sign the form. Make sure you follow any additional instructions.
If you disagree with the proposed changes, check the “I do not agree” section of the response form and provide a signed statement about why you disagree along with supporting documentation.
Also, contact the business or institution who reported this inaccurate information. Ask for a corrected document or statement to explain the error. Include this with your response.
Mail Materials By the Deadline
Make photocopies of everything you plan to send. Do NOT send original documents! Keep copies of your response document for your records.
Mail your response using the enclosed envelope. You can also fax the information to the number listed on the letter. If you choose to fax, include your name, social security number, and tax year on each page.
Usually, you will have 30 days from the date printed on the letter to respond. Note: Some CP2000 Letters do not include a response form–just instructions about what to do. If you need more time, call the number on the notice to ask for an extension.
Do you have questions about the information on the CP2000 letter? Your letter has a phone number you can call. An IRS staff can further explain the letter and give details about what you need to do given your specific circumstance.
After Mailing Your CP2000 Response
The IRS will review any information you send. If your information is accepted, the IRS sends you a confirmation letter that the issue is resolved.
If only some of the information is accepted, the IRS will send you a revised CP2000 letter with a new proposed tax calculation. Be sure to respond to this the same way you did to your original CP2000 letter.
If your explanation is rejected (or you don’t respond) the IRS will send you a CP3291A Letter–a statutory notice of deficiency. This letter explains the proposed changes to your return and your right to challenge the proposal in court.
Avoid Future Problems
Nobody wants to receive notices from the IRS. You could prevent this by:
- Making sure all your tax records are accurate.
- Waiting until you get all your income statements before filing your tax returns.
- Checking the accuracy of all tax documents (Forms W-2, 1098, 1099).
- Including all your income sources on tax returns.
- Staying informed on tax laws about reporting income, expenses, and deductions.
- Filing an amended tax return (Form 1040-X) for any information you receive after you initially filed.
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