Blog by BR Accounting and Tax Service

CP2000 Letters Abound!

  • BR Accounting And Tax Service

Categories: Accounting Services , Bookkeeping Services , Individual Tax Preparation , Individual Taxes , IRS Audits , Payroll Services , Small Business Accounting , Small Business Tax Preparation , Tax Accountant , Tax Planning , Tax Preparer , Tax Professional , Tax Resolution

I hope you have managed to stay safe and well! We focus on resolving tax issues in Prince William County and throughout the lower Northern Virginia area.

As the IRS works its way back to a level of respectable service, this could prove apprehensive for taxpayers. I’ll explain. I have it on pretty good authority that the IRS is expected to start putting regular collection efforts back into place starting some time in the month of June of this year. That means at least a trickle of agents knocking on business doors, collections calls, and you guessed it correspondence audits (or CP2000 Letters). If you decide to ignore this letter, you can expect to receive a notice of deficiency, which will start to “harden” the case against you in signal to the IRS (however wrongly it may be) that the potentially astronomical amounts of tax listed on these forms, is indeed legitimate. Lack of response to the notice of deficiency, may result in you petitioning the US Tax Court (which you’ll do to protect your rights if you’re smart) to try and resolve the matter originally listed on the CP2000 Letter.

If you’re confused by anything listed or stated in the letter be sure to setup a block of time to call the IRS and have the provide you with clarification on whatever may be baffling you. Make sure to FAX your responses to the letters. You want to avoid mailing anything to the IRS unless its something that you have already sent digitally in some form or fashion and you’re just making sure, the agency as a whole or the individual agent you’re dealing with has received the information. The letter will often tell you that there is no need for an amendment to the tax year in question, however, that is for you to determine. I personally would file an amendment if the matter in question involved me being able to legally deduct expenses/credits in relation to the information being reported in the letter. If you do decide to file an amendment, make sure and go that extra mile by composing your own letter in response to the CP2000 Letter, and include a copy of the amendment on Form 1040X (that you hopefully filed electronically), and fax everything along with your documentation to the number listed in the letter.

If ever you’re feeling overwhelmed or you’d rather be doing something else with your time, just remember we’re here to help you with all of your tax preparation, resolution/representation needs. Now and in the future. Don’t put off addressing your tax situation. Feel free to contact us with any questions you may have in approaching your specific tax scenario.