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

New Online Option for Certain IRS Notices

Taxpayers who receive certain notices requiring them to send information to the IRS can now submit their documentation online through IRS.gov. This new secure step will allow taxpayers or their tax professionals to upload documents electronically rather than mailing them in, helping reduce time and effort in resolving tax issues.

Initially, the online correspondence feature will be available to the more than 500,000 taxpayers each year who receive one of nine IRS notices. These notices are primarily sent to individual tax filers claiming various tax benefits, such as the Earned Income Tax Credit for low- and moderate-income workers, the Child Tax Credit for families with dependents, the Premium Tax Credit for those who obtain health coverage through the Health Insurance Marketplace and members of the military claiming combat zone tax benefits. Of note, taxpayers receiving these notices can respond securely to IRS online, regardless of whether they have an IRS Online Account.

How the Document Upload Tool works

The prototype for the Document Upload Tool was developed by IRS information technology specialists in 2021. Since then, the IRS has been testing this feature on a limited number of exam-related notices, and 38% of the responses to these notices have used the agency’s secure electronic communications rather than traditional mail.

Language on the notice informs the taxpayer to “Send us your documents using the Documentation Upload Tool within 30 days from the date of this notice.” It includes the link and a unique access code.

  • The taxpayer can open the link in any browser and then input their unique code, first and last name, and Social Security, Individual Taxpayer Identification, or Employee Identification number.
  • The taxpayer can then securely upload scans, photos, or digital copies of documents (maximum of 15 MB per file, up to 40 files).
  • The taxpayer receives a confirmation that the IRS received their documents, and the IRS employee assigned to the case can manage the transmitted documents.

What Notices Qualify?

Taxpayers who receive one of the following notices with the link and access code can choose to upload their documents:

  • CP04, relating to combat zone status.
  • CP05A, information request related to a refund.
  • CP06 and CP06A, relating to the Premium Tax Credit.
  • CP08, relating to the Child Tax Credit.
  • CP09, relating to claiming the Earned Income Tax Credit.
  • CP75, relating to the EITC.
  • CP75a, relating to the EITC.
  • CP75d, relating to the EITC and other credits.

Future Expansion Planned

This capability is expected to expand to dozens of other notices in the coming months and years. In addition, the IRS will offer digital correspondence on various other taxpayer interactions. During live phone calls with taxpayers, IRS employees can grant upload access by providing the link and unique access code.

Secure Digital Correspondence Offers a Better Solution

For taxpayers and tax professionals working with the IRS, this new capability reduces the correspondence burden, ensures tax compliance, and improves the customer experience. For IRS employees, this reduces paper correspondence, decreases processing time, and speeds case resolution.

Questions? Please, don’t hesitate to contact the office.

San Jose: (408) 252-1800

Watsonville: (831) 726-8500

IRS offers relief to California storm victims

Edit: On Friday, February 24, the IRS further extended the deadline for affected counties to 10/16. Read additional details in our latest post. As of this edit, the CA FTB has not yet announced conformity to the new October deadline. We will continue to update our blog with details as they become available.

The IRS announced on January 10th that California storm victims now have until May 15, 2023 to file various federal individual and business tax returns and make tax payments. Relief is automatically offered to individuals and households that reside or have a business in the following counties of California:

  • Alameda
  • Butte
  • Calaveras
  • Colusa
  • Contra Costa
  • El Dorado
  • Fresno
  • Glenn
  • Humboldt
  • Kings
  • Lake
  • Los Angeles
  • Madera
  • Marin
  • Mariposa
  • Mendocino
  • Merced
  • Mono
  • Monterey
  • Napa
  • Orange
  • Placer
  • Riverside
  • Sacramento
  • San Benito
  • San Bernardino
  • San Diego
  • San Francisco
  • San Joaquin
  • San Luis Obispo
  • San Mateo
  • Santa Barbara
  • Santa Clara
  • Santa Cruz
  • Siskiyou
  • Solano
  • Sonoma
  • Stanislaus
  • Sutter
  • Tehama
  • Trinity
  • Tulare
  • Ventura
  • Yolo
  • Yuba

Relief includes more time to file individual and business tax returns due on the March 15th or April 15th deadlines, Payroll tax returns due on the January 31st and April 30th deadlines, 4th quarter estimated tax payments due on January 17th and 1st quarter estimated tax payments due on April 15th. While the California Franchise Tax Board (FTB) has not yet announced any relief, historically they have matched the federal extensions in disaster declaration situations. As we await confirmation from the FTB as to whether California will conform to these extensions, right now the California 4th quarter estimated taxes are still due January 17th.

If you or your business reside in one of the impacted counties:
No action is required by you. Penalty relief for late filing is automatic and is based on the address you have used to file your tax returns in the past.

If you are outside the currently impacted counties:
You may be eligible for relief but it is not automatic. You can continue to watch this page (https://www.irs.gov/newsroom/tax-relief-in-disaster-situations) for more updates as new counties are added. We will also send updates as we learn of any changes to the impacted disaster declaration zone.

Both Wheeler Accountants offices are located in impacted counties (Santa Clara and Santa Cruz) and we have been experiencing flooding and power outages this week along with many other Californians. The IRS permits taxpayers who live or reside outside the disaster declaration area, but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area to be eligible for relief, but it is not automatic. Thus as a client of our firm you are eligible for relief by contacting the IRS at 866-562-5227. We will not automatically call the IRS on your behalf and we will proceed to complete your work in accordance with the traditional deadlines unless we hear from you that you would like to be eligible for the postponement.

Other state income tax returns for California residents in a federally declared disaster county may not be granted an extension. For multi-state returns, federal conformity to federally declared disaster extensions will need to be examined on a case by case basis.

We strongly encourage all clients to continue to submit tax documentation to our office as you normally would to ensure a smooth filing season and to allow us to provide the best possible service to you. The start of tax filing season including filing to obtain refunds due is not delayed by the disaster declaration.

If you have suffered economic loss as a result of the California storms please consult your tax team here at Wheeler as you may be eligible to deduct any losses on either your 2023 or 2022 tax returns, even if the loss occurred in 2023.