Understanding Your IRS CP2000 Notice

The IRS CP2000 is like a reminder from the IRS. It pops into your mailbox when there's a difference between what you reported on your taxes and what others told the IRS. Don't worry, It's not a bill. It just suggests a "proposed amount due" based on that difference. And rest assured, A CP2000 is not an audit.

Reasons why you may have received a CP2000:

• Unreported Income: Failure to report income from sources like a second job, freelance work, or contract work (e.g., Form 1099-NEC or 1099-MISC).
   
• Investment Income Discrepancies: Omission or incorrect reporting of interest, dividends, or capital gains (e.g., Form 1099-INT, 1099-DIV, or 1099-B).
   
• Incorrect Wages or Salary Reporting: Discrepancies in wages reported by an employer (e.g., Form W-2).
   
• Unreported Retirement Income: Missing or mismatched information on distributions from retirement accounts (e.g., Form 1099-R).
   
• Incorrect Deductions or Credits: Claiming deductions or credits that the IRS cannot verify with provided income data.
   
• Unreported Unemployment Benefits: Failure to include unemployment compensation (e.g., Form 1099-G).
   
• Social Security Income: Discrepancies in reporting Social Security benefits (e.g., Form SSA-1099).
   
• Alimony Reporting Errors: Issues with alimony payments or receipts, particularly for agreements subject to post-2018 tax rules.
   
• Errors in Reported Self-Employment Income: Underreporting or discrepancies in self-employment income.
   
• Incorrect Information Matching: Mistakes in IRS data or misreported information from third parties, like banks or employers.

Next steps:

Don't overlook that CP2000 notice from the IRS—take action based on whether you agree with the suggested changes. Typically, the notice includes a response form; if not, you'll need to write a letter. Here's the breakdown: If you disagree, reach out to the IRS within about a month using the form or a signed statement with relevant documents. If you're on the fence, send in the form or a statement, including an amended return showing changes you agree with. If you're okay with the changes, wait for the notice of deficiency, but consider asking for a penalty waiver in a letter to the IRS, attaching the necessary documents.

Still need a little help?

Take our word for it: don't procrastinate! If you do, you might end up owing even more due to penalties and interest. If you're feeling unsure about what to do or if things seem too complicated, don't worry! You can always reach out to a local tax pro for some help. Or, if you prefer, you can chat with our team at Protection Plus to see if our on-demand option works for you. We'll walk you through everything you need to do and can even handle talking to the IRS if it's necessary. Check out our on-demand availability here: https://taxprotectionplus.com/contact-us.