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How Does Someone Respond To The CP2000 Notice?

A response to a CP2000 notice has to be in writing. The best way to respond to the notice is to address every single issue listed on the notice, stating whether you agree or disagree with each issue, and also make sure to provide documentation to substantiate your position.

Should I Call the IRS Myself?

You can call the IRS yourself. However, the IRS expects you to provide a written response to a CP2000 notice in a substantial majority of the cases. Most IRS representatives in the automated underreported unit will not be able to make the corrections you are requesting over the phone.

Is It An Audit?

A CP2000 notice is technically not considered an audit. However, if the IRS continues to disagree with you, they will issue a Notice of Deficiency and you may have to file a petition with tax court to dispute the notice. This means the notice can turn into a full audit if the IRS continues to scrutinize the disputed amount and then, the case will be assigned to an IRS appeals officer to try to resolve the matter.

What Penalties Might I Be Facing If My Tax Return Does Not Match Income Information The IRS Has?

If the amount the IRS is proposing to assess exceeds $5,000, the CP2000 notice will automatically include a 20% accuracy-related penalty. The penalty can also be disputed, even if you agree with the other adjustments on the CP2000 notice.

Can I Contest The CP2000 Determination?

Yes, you will always have the opportunity to contest the CP2000 notice. This will need to be done in writing and you also will have appeal rights if you continue to disagree with the IRS determination.

What Documentation Or Evidence Will I Need To Support My Claim?

It depends on the issues involved. For example, if the IRS is claiming you received a retirement distribution that was taxable, but you rolled over your retirement account to a different plan, which is not taxable, you will need to provide an explanation as well as your retirement plan statements from your old plan administrator. You will also need to provide statements from your new plan administrator to show the rollover occurred within the 60-day allowable rollover period.

Do I Need An Attorney To Guide Me Through The Process After I Have Received The CP2000 Notice From The Internal Revenue Service?

Some notices are very simple and just need a single statement or other documents of proof to respond. However, oftentimes, the disputed issues on the notice relates to a complex tax position claimed on the tax returns. In more complex notices, it is definitely a good idea to consult with an attorney to prepare the best response possible.

For more information on Responding To the IRS’ CP2000 Notice, a free initial consultation is your best step. Get the information and legal answers you are seeking by calling (714) 321-3369 today.

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