IRS Notice CP2000 states, "Proposed changes to your [year] Form 1040 - Amount Due: [$amount]". The IRS uses Notice CP2000 to inform you of proposed changes to your return based on information they have received from various third-party sources. Usually, the extra items are income, which increases your tax.
Look carefully at the parts of the Notice CP2000 detailing the extra items that were missing from your return to see if you agree. If not, go to the line of your return which is being questioned to see if any problems are apparent. The IRS information is not often wrong but lacks offsetting proof in mitigation. You'll have to do some research to contest the IRS. TaxHelpLaw will show you what evidence to gather!
The IRS uses Notice CP2030 to inform businesses of proposed changes to a return. The primary problem that businesses face is that the IRS will cruelly penalize them for errors & it is difficult to extricate the business from the ballooning debt. Notice CP2030 is essentially the same in effect as Notice CP2531. Both indicate that the IRS has information that did not appear on the business tax return.
This is not a bill and not an audit but is a math adjustment based on third party records. The IRS could audit you later.
If you fought the IRS through the whole procedure you would likely end up in Tax Court. But, the usual method of handling a Notice CP2000 is to either: 1) respond in writing to the IRS at the address on the letter or, 2) file an amended return addressing the items questioned by the IRS in the Notice CP2000.
We believe it is usually better to file an amended return since that initiates a process the IRS must follow, whereas letters to the IRS are often poorly written, lost or misinterpreted by the IRS. However, filing an amended return starts new limitations periods for audits, collections, bankruptcy, etc. So, be careful!!
When you respond to the IRS be very cautious with your statements and what you send them. These will be used against you! Please follow the Prep Steps for IRS Notice CP2000 and see Mr. Hopkins in Colorado Springs or Pueblo before proceeding. You only have 60 days to respond!
There are several types of IRS Notice CP2000:
