IRS CP2000 Letter Notice of Proposed Changes

The IRS receives a copy of your W-2 and 1099s from your employer and financial institutions each year. About a year after you file your tax return the IRS computers compare the information on your tax return with the information that third parties provided.

For example when you file your 2015 tax return in 2016, in 2017 the IRS computers will compare your 2015 tax return that you filed with the 2015 information that the IRS received from your employers, financial institutions, and vendors to determine if there are any discrepancies.

If the IRS finds any discrepancies where it believes you omitted income, the IRS will issue a CP2000 letter, Notice of Proposed Changes. This letter is a proposal by the IRS to change your tax return that was filed because the IRS believes you filed it icorrectly. The letter does not mean the IRS is 100% correct. Actually sometimes they are wrong and it is up to you to tell them and explain to them why it is wrong so that they do not charge you additional tax.

When you receive a CP2000 letter it is important to review the letter and contact a tax professional or the IRS for an explanation, however, never accept the IRS' explanation without ever consulting a tax professional. The CP2000 letter will normally give you a thirty day deadline to respond, however, if you miss this deadline do not panic because the IRS will send another letter to you. 

A Taxpayer typically will be given a number of options to choose regarding a CP2000 letter:

I agree with all the proposed changes by the IRS.

I agree with some of the proposed changes by the IRS.

I do not agree with any of the changes proposed by the IRS.

If you select either the second or third option you will have to submit documents to support your position.

For assistance with a CP2000 letter call (321) 951-0036 to speak to a CPA.

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