Real Solutions to IRS Debt and Related Problems

IRS CP2000 Letter FAQ

Q: What Is an IRS CP2000 Letter?

A: The IRS CP2000 letter provides notice of a discrepancy between what was reported to the IRS and your return. It also threatens changes to your return based on that discrepancy.

Q:How Many Tax Years Can the IRS Issue a CP2000 Letter For?

A: The IRS can issue a CP2000 letter for 3 years of returns based on the dates those returns were due to be filed or filed, whichever one came later.

Q: Can an IRS CP2000 Letter Become an IRS Audit?

A: Yes, the CP2000 can “morph” into an audit in certain situations. The taxpayer can request that it be treated as an audit as well.

Q: What if I Just Ignore the IRS CP2000 Letter?

A: Ignoring the IRS CP2000 would be a mistake unless you are certain that the changes the IRS is proposing to the return are correct.

Q: If I Owe as A Result of An IRS CP2000, Can I Use an IRS Collection Alternative?

A: Yes. When the CP2000 process is final and a bill is issued, you will want to determine whether you should pay it in full, or use a collection alternative.

Q: What if I Didn't Respond to The IRS CP2000 and Now Have a Debt?

A: If the new debt is incorrect, you can ask the IRS to “re-consider” the assessment.

Q: Can I Ask for IRS Penalty Non-Assessment when Responding to An IRS CP2000 Letter?

A: Yes. you will want to ensure you qualify for first-time penalty abatement or reasonable cause penalty and ask that the penalty(ies) not be assessed.

Q: What Is the Difference Between an IRS CP2501 Notice and IRS Cp2000 Notice?

A: The IRS typically sends the CP2501 notice first for a few different reasons.

Q: What Document Will I Receive to Tell Me the CP2000 Process Is Over?

A: It will depend on the outcome. The outcome of the CP2000 process will either be new debt or no change.

Q: Should I File an Amended IRS Return in Response to An IRS CP2000 Notice?

A: You should create a return for the purposes of comparing the correct return to the IRS proposed changes. But filing the return as an amended return in response may cause more problems.

Q: What Is the Process I Should Follow to Respond to An IRS CP2000 Letter?

A: There are a specific set of steps that should be followed in responding to an IRS CP2000 letter.