Should You Show Your IRS Form CP 2000 To An Enrolled Agent

Should You Show Your IRS Form CP 2000 To An Enrolled Agent

Ever wonder what happens when you receive a 1099 or other tax form after you have already filed your return? Usually these errors are caught by the sophisticated computer system used by the IRS. When errors are found, the IRS sends form CP 2000 to inform the recipient of changes the IRS is proposing to their tax return because information they reported on it doesn't match what was reported to service by their employers, banks, and other payers. The IRS sends a CP 2000 to provide detailed information about those differences, the changes proposed, and what to do if they agree or disagree with the proposal. The CP 2000 reflects any corrections the made to your original return, and considers those changes in a recalculation of the tax due. It is possible that these changes result in a decrease in tax due, but usually an increase is the result.

An individual may receive the following documents along with the CP 2000:

Notice 609, Privacy Act Notice

Publication 5, Your Appeal Rights and How to Prepare a Protest if You Don't Agree

Publication 1, Your Rights as a Taxpayer

Publication 594, What You Should Know About The IRS Collection Process

The CP 2000 is only a proposal that offers you an opportunity to disagree, partially agree, or agree with the proposed changes. The IRS has not charged any additional tax at this point. It's important that you respond to the CP 2000 by the due date shown on the notice. If you don't, the IRS assumes the proposed changes are correct and will continue processing the proposal ultimately to an assessment. If you can't respond by the due date on the notice because you need more time to research your records, you can call the IRS to request an extension. Generally, they will allow an extension 30 days beyond the response date shown on the notice. It's important to remember that additional interest and any applicable penalties will accrue on the account during the period of the extension if the tax increase is correct.

When dealing with IRS notices, the experience of an enrolled agent can be beneficial in preparing a response. Enrolled agents are tax specialists, who earn the privilege to practice before the IRS directly from the federal government by passing the enrolled agent exam, also known as the IRS Special Enrollment Exam

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