CP 2000 – We Are Proposing Changes To Your Return

The CP 2000 notice will be sent to you when the IRS is proposing adjustments to your tax return after receiving different information from the banks, employer or other payers. In this notice, you will find detailed information about the differences, the adjustments that the IRS has proposed and the steps that you can take when you agree or disagree with the adjustments. In very simple words, CP 2000 is sent to the recipient (i.e. you) when the tax return reported by you is not the same as the return reported by your employer or banks.

Some of the documents that may be enclosed with the CP 2000 are:

What You Should Know About The IRS Collection Process (Publication 594)?
Privacy Act Notice (Notice 609).
Your Rights as a Taxpayer (Publication 1).

Your Appeal Rights and How to Prepare a Protest if You Don’t Agree (Publication 5).

Many people are not aware about what the notice CP 2000 is. It is basically a notice that is sent to a tax payer to notify him or her about the changes in his or her tax account for a specified tax period. The proposed adjustments are made on the basis of the deductions reported on the tax return, income, credits and payments. Generally, the people who give this information to the Internal Revenue Service are payers, banks, employers, or businesses. CP 2000 will also show the changes, if any, made by the IRS at the time of processing the tax return. Generally, you can say that, the CP 2000 notice is a proposal and you can either agree or disagree with. The proposed adjustments usually increase the tax amount but there are very few cases where the IRS may propose a decrease in the tax amount.

There will be a deadline mentioned in the CP2000,before which you will have to respond to the IRS. If you fail to give them a response, then they will assume that you agree with the changes that they have proposed. In case you feel that you will not be able to give them a response before the date mentioned in the notice, you can always call the IRS and ask for more time. They may give you an additional thirty days time to look for all the records that you need.

If you received CP2000, it means that you have omitted income from your return or the amount of income or expenses on your return does not match the amount reported to the IRS. The following pages will provide an explanation of the changes followed by a detailed listing of the items that were left off your return or did not match the amounts reported to the IRS. Respond immediately, with all the proof you have to sway them to your way of thinking. Do not shortcut your proof.