Tax Dictionary – Underreported Business Income
Business Automated Underreporter cases are drawn from two primary sources:
- The Business Master File which contains information reported to the IRS by taxpayers
- The Information Return Master File which contains information submitted by payers
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If the IRS finds that the information provided to them by third parties such as credit card merchants, banks and other payers does not match the information reported on the business’s tax return, they will send a underreporter notice such as Letter 2030 or 2531. These notices request that you review the tax return and verify the information requested. You may need to contact the payer if the information the IRS has on file is not correct or is different from the information on the form you received from the payer.
Learn more about notice LT40, why you received it, and how to handle an IRS bill for unpaid tax with help from the tax experts at H&R Block.
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