{"id":31080,"date":"2017-11-14T10:14:22","date_gmt":"2017-11-14T16:14:22","guid":{"rendered":"https:\/\/www.hrblock.com\/tax-center\/?p=31080"},"modified":"2019-01-04T13:42:34","modified_gmt":"2019-01-04T19:42:34","slug":"two-things-must-know-cp2000-notice","status":"publish","type":"post","link":"https:\/\/www.hrblock.com\/tax-center\/irs\/audits-and-tax-notices\/two-things-must-know-cp2000-notice\/","title":{"rendered":"Two Things You Must Know Before You Check the Box on Your CP2000 Notice"},"content":{"rendered":"

When you get a CP2000 notice in the mail from the IRS, it means that the IRS thinks you left income off your tax return. CP2000 notices feel a lot like an audit. But really, the IRS is just asking you to explain why there\u2019s a mismatch between your return and IRS records.<\/p>\n

There are lots of reasons to look closely at notices from the IRS. (See: Incorrect CP2000s Are More Common Than You Think<\/a>.) With CP2000 notices, it\u2019s also important to make sure you preserve all your rights when you respond to the IRS.<\/p>\n

The CP2000 notice comes with a response form so you can easily get back to the IRS. It\u2019s pretty convenient. But the response form has two shortcomings. So before you respond with a checkmark, you must know these important tips.<\/p>\n

1. Don\u2019t lose your right to fight an accuracy penalty.<\/h2>\n

You may agree with the IRS that you made a mistake on your tax return. But do you agree with the penalties<\/a> that the IRS is proposing?<\/p>\n

The IRS automatically charges accuracy or negligence penalties<\/a> if the IRS thinks you were negligent in underpaying taxes on your return. This penalty is 20% of the tax increase the IRS says you owe in the CP2000 notice.<\/p>\n

Maybe you had reasonable cause<\/a> for the mistake. If you check the box in the CP2000 notice agreeing to all the changes, you are agreeing to all the penalties, too.<\/p>\n

2. Don\u2019t lose your right to appeal.<\/h2>\n

The CP2000 is a complex notice. It can serve double duty as an initial request for information and a 30-day letter<\/a>. Generally, 30-day letters give you 30 days to request a conference with the IRS Office of Appeals<\/a> if you don\u2019t agree with the notice.<\/p>\n

If the IRS disagrees with your CP2000 response, the IRS usually sends a Statutory Notice of Deficiency (90-day letter)<\/a>. After you get that letter, you can\u2019t request an Appeals conference. You\u2019ll have 90 days to petition the U.S. Tax Court<\/a>. After the 90-day letter, you\u2019ll get a final bill from the IRS.<\/p>\n

What\u2019s so special about a conference with the IRS Office of Appeals? <\/strong><\/p>\n

Nobody wants to take the IRS to court \u2013 especially if someone at the IRS can informally take a second look at your dispute. An IRS Appeals officer can check the accuracy of the IRS tax examiner\u2019s determination about your CP2000 \u2013 and reverse the examiner\u2019s decision without requiring you to go to court.<\/p>\n

In fact, most Tax Court petitions end up back in IRS appeals, so why not request an appeal without having to go through the hassle of a time-consuming Tax Court petition and legal proceedings?<\/p>\n

IRS appeals conferences have these benefits:<\/p>\n