Currently non collectible status (CNC or IRS Hardship Program) stops IRS collection activity on the tax debt. But the taxpayer is required to check in with the IRS every few years to prove their continued inability to pay the tax. If you accidentally misreported your tax information, you may be able to call the IRS and make corrections over the phone so long as the correction won’t increase or decrease the tax you owe. If it does, then you’ll need to make your corrections in writing.

Review past federal returns and state tax returns to ensure you didn’t make the same mistake. If you agree with the notice of underreported income, it’s a good idea to go over the past few years of returns with a tax professional to amend those returns to reflect your income and deductions accurately. By being proactive, you may be able to avoid a 20% inaccuracy penalty and additional IRS notices.

What Is Form 1099-MISC?

They will include a statement indicating the reason for the disagreement. The taxpayer is required to respond, stating if they agree or disagree with the CP2000 and the proposed amount due. The taxpayer has 30-days from the date printed on the notice to respond. Responses should be sent by certified mail to the IRS AUR (Automated Under-Reporter) Department. You can call the IRS on the number provided in the CP2000 notice to talk to an examiner. You can resolve any issues at this point without further escalations.

If you can’t pay the full amount right away, you can set up a short-term payment plan or a long-term installment agreement with the IRS. Payment plans must be repaid in 180 days or less, while installment agreements require monthly payments. Usually, it means that you didn’t report all of your income properly. It could mean you underreported income for your self-employment taxes or freelance work you did as an independent contractor, for example.

What are my next steps?

Sometimes referred to as “phishing” scams, these are usually sent over email and include a fake CP2000 attachment. If you’re not sure how to proceed, you might need a bit more time. Contact the IRS what is a cp2000 notice via the number printed on your notice for any deadline extensions or questions about the appeals process. Sign the letter and send it back to the IRS, which will send you an updated tax bill.

And those expenses might be $30,000 — I’m just making up a figure, by the way — so your net business income would only be $20,000. Below are the steps you should take after you receive a CP2000 Notice. This guide from the IRS will help you gain insights on what to do when you receive a CP2000 notice. The following will explain in detail what CP2000 notice could mean, ways to handle it, and the best ways to address such communications. This guide will help you understand the CP2000 notice in detail + tips to handle such notices tactfully. View our interactive tax map to see where you are in the tax process.

If you disagree with the CP2000

You may also lose the ability to request a waiver of penalties in the future if you really make a mistake. Business Loan offers that appear on this site are from companies or affiliates from which solvable may receive compensation. Solvable does not include all Business Loan companies or all types of offers available in the marketplace. See the online Provider’s credit card application for details about terms and conditions. However all credit card information is presented without warranty. When you click on the “Apply Now” button, you can review the credit card terms and conditions on the provider’s website.

Not everyone does, but if you do qualify this often is the best option to resolve your tax debt. You or your tax pro will need to investigate the issue more and get back to the IRS within a certain amount of time. And, if the IRS says you owe penalties, that’s something you’ll need to take care of, too. The IRS also accepts faxes, and some tax professionals say this is a better way to respond because it’s faster and you know they got it. The CP2000 fax number also varies based on where you live and your specific tax issue.