June 2, 2020

IRS Just Sent Me a CP 2000- Automatic Adjustment Notice- What Do I Need to Know?

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IRS Just Sent Me a CP 2000- Automatic Adjustment Notice- What Do I Need to Know?

The IRS has a series of audit letters, each has its own level on the stress gauge. Check out the links to learn more:

Notice of Audit and Examination Scheduled – Stress level is manageable, but the unknown is probably killing you.
IRS CP 2000- Automatic Adjustment Notice—Pretty mellow, usually just missing some items from the return.
IRS Letter 3391- 30 Day Non-filer Letter – Oops looks like you may not have filed a return! Stress level is still not too high, you may be embarrassed you missed a return.
IRS Letter 525- General 30 Day Letter – Proposed Adjustment- Usually a math error. Stress level is still manageable but getting higher because you likely owe.
IRS Letter 692- Request for Considering of Additional Findings – Usually a bigger problem than just a math error, you have some bigger mistakes. Stress level is starting to get up there because you may be concerned about other returns.
IRS Letter 915 – Letter to Transmit Examination Report. This letter is sent with the audit report after a correspondence audit. Stress level is usually up there but not like after a field audit.
IRS Letter 950- 30 Day Letter Straight Deficiency or Over Assessment - This letter is sent with the audit report after a field audit. Stress level is up there because you just got done with a field audit which was not a lot of fun.
IRS Letter 531- Notice of Deficiency- This is the IRS telling your they believe you definitely owe a debt. Stress level is high, and you are wondering about your options

This is a CP 2000. This is the first notice indicating there are discrepancies with your return. While technically it is an audit letter, however, it is more of the IRS’ way to make adjustments to your return based on information that the IRS has that does not agree with the return filed

There are four possible outcomes of a CP 2000 inquiry:

No-change to the filed return: the taxpayer will receive a CP 2005 stating there is no-change to the return filed.
Agreed change: the taxpayer files a response, includes the correct liability, and the tax is assessed. The IRS sends a CP 22 notice with the new balance owed.
Unagreed change: the taxpayer and the IRS disagree on the return discrepancy. If the taxpayer requested a timely appeal, they can have their case heard in the IRS Office of Appeals. With no request for appeal, the next steps for assessment will be a Statutory Notice of Deficiency (IRS Letter 3219) which provides the taxpayer the opportunity to go to Tax Court. It the taxpayer misses the 90-day deadline to petition the US Tax Court, the IRS will assess the tax and issue IRS letter CP 22.
Refund: in this case, the taxpayer takes a fresh look at their return and realizes they made errors that result in a refund. A common scenario is a taxpayer who fails to report a stock sale (Form 1099-B) yet has a basis in the stock that would indicate a loss. In this case, the IRS will adjust the account and send the refund.

What is my first step?

If you received a letter or notice, a decision must be made. Do you feel confident to handle this situation on your own? If it is a simple issue and you already know the answer, call, or write them. If the issue is more complicated, you need to hire a Certified Tax Resolution Specialist. The IRS or State will take full advantage of your lack of knowledge and experience.

What is Your Next Step?

The next step is to determine if the notice was sent in error. Do you have an outstanding tax liability? Do you have unfiled or incomplete returns?

Is There a Time Limit?

Yes, each letter or notice from the IRS or State will indicate a date that you MUST contact them by. If you need more time, call the number on the notice or letter and request an extension. DO NOT ALLOW the time to expire without contacting them or hiring a representative to contact them for you.

What You Don’t Want to Do!

What you don’t want to do is nothing. Your tax problems will only get worse if you ignore them. If you cannot pay, there are a number of potential solutions available to those who are otherwise in compliance. In compliance means having all tax returns filed and any balances paid or on a payment plan. If you have outstanding debts or unfiled returns, you need to get hire a Certified Tax Resolution Specialist.

Get Some Help

If you don’t know how to address the issue(s), have unfiled returns/unpaid balances or just done feel confident, let the experts at Legacy Tax & Resolution Services represent you. Work with our team of Certified Tax Resolution Specialists to resolve your issue(s) quickly. Best of all, you don’t have to talk to the IRS or State; we can speak on your behalf.

Stop the stress and resolve your problems Call 800-829-7483 TODAY