When addressing your taxes, the IRS may send you certain forms or notices. One of these is the CP2000 form. It’s important to know why you would get this and what it means moving forward.
First and foremost, this is a notice for underreported income. It essentially means that the Automated Underreporter system has found a discrepancy. You need to adjust your income in some way to eliminate this discrepancy.
How could this happen?
For example, say that you report your income as $80,000 for the year. The IRS examines your tax forms but also gets information from other sources—including your employer. If your employer reports that they paid you $100,000 during the year, then there’s a $20,000 discrepancy between what you claim you earned and what they claim they paid you.
When you get the CP2000 form, don’t think of it as a bill. It’s not going to tell you that you need to pay an additional amount of money or impose a financial fine. Instead, it’s just alerting you to the discrepancy and asking you to submit other documents to adjust your income. Perhaps you simply filled out your taxes incorrectly or forgot to include a portion of your income. It may be a quick matter of updating things so that the IRS can tell you how much you actually owe in taxes.
Of course, there’s also a chance that you believe your taxes are correct and that your employer is the one who filed an incorrect report. Regardless, it’s very important to know how to address this issue, what documentation you’ll need to submit and what steps to take moving forward so that you can resolve this issue with the IRS.