CP2000 Letter:
Notice CP 2000 shows proposed changes to your income tax return. This proposal is based on a comparison of:
- income
- payments
- credits
- deductions
The above items are reported on your tax return with information provided to us by employers, banks, businesses, and other payers. The CP 2000 also reflects any corrections the IRS made to your original return when they processed it.
The CP 2000 is not a bill. The IRS is asking you to verify the income, credits, and deductions reported on your tax return because they're different from the information the IRS received from other sources. The IRS may even be proposing a decrease to your tax. The CP 2000 is only a proposal that offers you an opportunity to:
- disagree
- partially agree
- agree
with the proposed changes. The IRS hasn’t charged any additional tax at this time.
You should review the information in the column marked "Shown on Return" and compare it with the information shown in the column marked "Reported to IRS (or Proposed by IRS)." Did you receive the income? If you received the income, was it reported on your tax return? IRS employees search the tax return and try to locate all income. Sometimes, however, several income items are combined and the employees can't determine the source. If it wasn't reported on your tax return, was it an oversight? If so, don't file an amended return to report the income. Just check box "A" on the CP 2000 response page and return it with your check or money order made payable to the United States Treasury. If you agree with the increase but you can't pay the entire balance due, you may be able to request an installment agreement. If you didn't report the income for another reason, please explain.
It's important that you respond to the CP 2000 by the due date shown on the notice. If you don't, the IRS will assume the proposed changes are correct and continue processing the proposal ultimately to an assessment.
The law requires the IRS to charge interest on any tax that isn't paid by the return due date (Internal Revenue Code Section 6601). The IRS Restructuring and Reform Act of 1998, however, requires the IRS to notify taxpayers of the proposed discrepancies within 18 months of the original filing date in order to charge normal interest. The IRS may need to adjust the interest charge if we make initial contact after that time.
The law allows the IRS to reduce or remove interest on tax increases attributable to errors or delays the IRS made in the performance of ministerial acts (Tax Reform Act or 1986 - Ministerial Act provision). A ministerial act is a procedural, mechanical, or processing act that doesn't involve the exercise of judgment and occurs even though you did everything the IRS required you to do. If you believe you qualify for abatement of interest based on this provision, you should include your reasons in your response.
The law doesn't permit the IRS to reduce or remove interest for reasonable cause. Reasonable cause only applies to penalties and refers to an acceptable explanation of circumstances that prevented you from paying the tax when it was due.