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Saturday, Dec. 7, 2013
IRS CP2000 NoticePosted Tuesday, May 1, 2012, at 4:00 PM
You filed your tax return on time (or requested an extension) and life is good. Oh My! What's this in the mail? A letter from the IRS. It's a CP200o notice (Notice of Proposed Adjustment for Underpayment/Overpayment). This is one of the Top 40 IRS notices mailed to taxpayers. The IRS sent out 9,397,615 CP200o notices for the 2009 tax year.
So why did you receive this notice? The IRS has noticed a discrepancy in the income you reported on your tax return and the income reported to the IRS by employers, banks, etc. As a result, the IRS is proposing a change to your tax return that normally means an increased tax liability.
So what should you do? Do not ignore the notice. If you clearly understand wherein lies the difference (you forgot to include income reported on a 1099-misc form, etc.), then pay the liability (including interest and penalty). If there are extenuating circumstances that resulted in your failure to include the 1099-misc on your tax return, then you should consider requesting an abatement of interest and penalty.
What if you do not agree with the notice. Remember, this is not a bill. However, if you fail to respond to the notice, the IRS will process the proposed changes and send you a bill. You have 30 days from the date on the notice (not the date you receive the correspondence) to respond. After that deadline, you have lost your opportunity to dispute the tax liability and you are only left with figuring out how to pay for it.
You may be the victim of an erroneous W-2 or worst yet -- identity theft (additional wages reported to the IRS on your social security number).
If the proposed change is significant, then you will want to consult with a tax professional.
If you have specific questions about IRS tax problems, post those questions here or send an email to firstname.lastname@example.org (all communication regarding tax matters is confidential to the fullest extent of the law). To learn more about tax problems and how to resolve them, visit www.IRSSURVIVAL.com (if you do not see your specific issue listed or you cannot find an answer to your specific problem, send an email or call 573-275-9055 or 855-IRS-SURVIVAL.
IRS Circular 230 Notice: To ensure compliance with requirements imposed by the IRS, we inform you that, unless specifically indicated otherwise, any tax advise in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any tax-related matter addressed herein.
Taxes, Liens and Levies, Oh My!!
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Alan is a CPA and a Certified Fraud Examiner (CFE) with the firm Begley, Young, Unterreiner & White, LLC located in Cape Girardeau. He is a member of the American Institute of Certified Public Accountants, the Missouri Society of Certified Public Accountants and the Association of Certified Fraud Examiners. Alan obtained his MBA from Southeast Missouri State University, and is also a Certified QuickBooks ProAdvisor who provides support to clients on the use of QuickBooks. Alan's firm works with a variety of small businesses and not-for-profit organizations providing accounting and payroll services, compilations, reviews and audits, estate and tax planning and tax preparation. Alan can be reached at 334-2845 (office) and 275-9055 (cell) or you can email him at email@example.com.