IRS CP 2000 Notice – Respond Like a Pro
Today we’re going to talk about the IRS CP 2000 Notice, specifically for accountants whose clients have received one.
However, this is good for individuals who have received the same notice. Either way, you don’t want to miss out on this information.
What is an IRS CP 2000 Notice?
It’s a notice for what’s called an underreporter exam or audit. And what’s happening here is IRS has detected there’s some information about income that was received and not put on the tax return.
Or possibly a tax return was not filed at all, but the IRS has this information. That is what is on an IRS CP 2000 Notice.
So, what do you need to know about it?
3 Things You Need to Know
1. It is not a tax bill.
It’s a proposal for a tax assessed, and that proposal will be based on income information and calculations that the IRS made.
They want you to respond to it. However, it’s not final. It is a proposal.
2. This notice and your response are time-sensitive.
Now, what happens in many cases? You, as the tax accountant, won’t even see this notice until months after your time to respond has expired.
Again, these things are time-sensitive. And if you don’t respond in time, well, the consequence may have already happened and may need to be undone.
Now that’s not something that accountants are trained to do. It’s more procedural steps, but you should know that part.
3. You may need the help of a tax attorney.
Sometimes these underreporter audits and the appropriate response is not just a matter of reporting the income.
Sometimes it does require a legal position. You have to state your legal authority.
It’s not always appropriate for an accountant to just plug in some numbers and send that information to the IRS. Sometimes you actually have to argue, and you have to provide a legal basis for that argument.
Now keep that in mind because you want to help your clients, but this isn’t always something that you should respond to.
Maybe your best response to your client is that you’re going to refer them to a tax attorney.
Now you can hire us at Tax Law Offices, or you can hire another company. But the most important thing is to find someone you trust. Find someone with a really good reputation.
But find someone quick and get on with it.
Because, again, everything is time-sensitive.
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