What Certain IRS Notices Mean

What does it mean if a business receives a Notice CP2100 or CP2100A from the IRS? These notices tell recipients that the Form 1099 information returns they’ve submitted contain missing or incorrect Taxpayer Identification Numbers, names or both.

To respond, payers need to compare accounts listed on the notice with their own records and make corrections, if necessary. They may also need to amend backup withholding for payments made to payees. Typically, the IRS sends these notices twice a year, in April and in either September or October. As always, you should promptly respond to any IRS communication. Contact the office with questions.

San Jose: (408) 252-1800
Watsonville: (831) 726-8500

Verifying Your Identity When Calling the IRS

Sometimes, taxpayers must call the IRS about a tax matter. As part of the IRS’s ongoing efforts to keep taxpayer data secure from identity thieves, IRS phone assistors take great care to discuss personal information with the taxpayer or someone the taxpayer has authorized to speak on their behalf. Therefore, the IRS will ask taxpayers and their representatives to verify their identity when they call.

Calling the IRS About Your Own Tax Matter

You should have the following information ready before calling the IRS:

  • Social Security numbers (SSNs) and birth dates for those who were named on the tax return
  • An Individual Taxpayer Identification Number (ITIN) letter if you have one instead of an SSN
  • Your filing status: single, head of household, married filing jointly, or married filing separately
  • Your prior-year tax return, because phone assistors may need it to verify taxpayer identity with information from the return before answering certain questions
  • A copy of the tax return in question
  • Any IRS letters or notices you have received

Legally Designated Representatives

By law, IRS telephone assistors will speak only with the taxpayer or to the taxpayer’s legally designated representative. In other words, a taxpayer can grant authorization to a third party to help with federal tax matters. Depending on the authorization, the third party can be a family member, friend, tax professional, attorney, or business. The different types of third-party authorizations include:

  • Power of Attorney – Allow someone to represent you in tax matters before the IRS. This is different from a power of attorney for property who you authorize to manage your financial affairs. It must be an individual authorized to practice before the IRS.
  • Tax Information Authorization – Appoint anyone to review and receive your confidential tax information for the type of tax and years/periods you determine.
  • Third Party Designee – Designate a person on your tax form to discuss that specific tax return and year with the IRS.
  • Oral Disclosure – Authorize the IRS to disclose your tax information to a person you bring into a phone conversation or meeting with the IRS about a specific tax issue.

Note: Taxpayers must meet all of their tax obligations even when authorizing someone to represent them.

Calling on Behalf of Someone Else

If you are calling the IRS about someone else’s account, you should be prepared to verify your identity and provide information about the person you represent. Before calling about a third party, you should have the following information available:

  • Verbal or written authorization from the taxpayer to discuss the account
  • The ability to verify the taxpayer’s name, SSN or ITIN, tax period, and tax forms filed
  • Identity Protection PIN (IP PIN)
  • One of these forms, which is current, completed, and signed: Form 8821, Tax Information Authorization or Form 2848, Power of Attorney and Declaration of Representative

Keep in mind that if your tax professional is calling the IRS on your behalf, your tax pro will need to have this information about you, except generally a Preparer Tax Identification Number (PTIN) instead of an IP PIN.

Questions or Concerns?

If you have any questions or concerns about verifying your identity before calling the IRS, do not hesitate to contact the office for assistance.

San Jose: (408) 252-1800
Watsonville: (831) 726-8500

What To Do if You Receive an IRS CP2000 Notice

An IRS CP2000 notice is mailed to a taxpayer when income reported from third-party sources such as an employer, bank, or mortgage company does not match the income reported on the tax return.

It is not a tax bill or a formal audit notification; it merely informs you about the information the IRS has received and how it affects your tax. It is, however, important to pay attention to what your CP2000 notice states because interest accrues on your unpaid balance until you pay it in full.

What to Do

If you receive a CP2000 notice in the mail, complete the response form. If your notice doesn’t have a response form, then follow the notice instructions. Generally, you must respond within 30 days of the date printed on the notice. However, you may request additional time to respond, and if you cannot pay the full amount that you owe, you can set up a payment plan with the IRS.

If the information on the CP2000 notice is not correct, then check the notice response form for instructions on what to do next. You also may want to contact whoever reported the information and ask them to correct it.

If the information is wrong because someone else is using your name and social security number, please contact the IRS and let them know. You can also use the link on the IRS Identity theft information web page to learn more about what you can do.

If you do not respond, the IRS will send another notice. If the IRS does not accept the information provided, it will send IRS Notice CP3219A, Statutory Notice of Deficiency, which includes information about how to challenge the decision in Tax Court.

Do I Need To Amend My Return?

If the information displayed in the CP2000 notice is correct, you don’t need to amend your return unless you have additional income, credits, or expenses to report. If you agree with the IRS notice, follow the instructions to sign the response page and return it to the IRS in the envelope provided.

If you have additional income, credits, or expenses to report, complete and submit a Form 1040-X, Amended U.S. Individual Income Tax Return. If you need assistance with this, please call the office.

How To Avoid Receiving an IRS CP2000 Notice:

  • Keep accurate and detailed records.
  • Wait until you receive your income statements before filing your tax return.
  • Check the records you receive from your employer, mortgage company, bank, or other sources of income (W-2s, 1098s, 1099s, etc.) to ensure they are correct.
  • Include all your income on your tax return, including that from a second job or fees derived from the sharing economy (e.g., renting a spare room out on Airbnb).
  • Follow the instructions for reporting income, expenses, and deductions.
  • File an amended tax return for any information you receive after you’ve filed your return.
  • Use a professional tax preparer who will help you avoid mistakes and find credits and deductions you may qualify for.

If you have questions about IRS notices, help is just a phone call away.

San Jose: (408) 252-1800

Watsonville: (831) 726-8500