How to respond to an IRS letter from their Underreporter Unit. No matter what else you do, the first rule is to respond.
The Internal Revenue Service sends many letters with various letter numbers, CP numbers, and notice numbers too vast to count. One letter no one wants to receive is the CP 2000. This letter comes from the Automated Underreporter Branch (AUR) to inform you that there is a discrepancy between what appeared on your tax return and what your payers, i.e, your employer, the state, et al, reported. Though a few discrepancies may result in a refund, most result in a balance due to the IRS. After reviewing the long notice, which displays in detail the name of the payer, the amount reported, and whether some or none of the amount appeared on your return, you may do one of the following within 30 days of the date of the notice:
- Agree- Sign the notice and send full payment. Your account will be increased by the agreed upon amount. If any interest is due, which should not be the case if you responded within the 30 day time period.
2. Disagree in full-Do not sign the notice. This is if you agree. Mail or fax documentation to the IRS showing how and why you disagree. It may take 30 days or more (usually more) for a response. The best part about the CP 2000 is that there is a contact phone number that you can call to check the status. Good luck getting through to a live representative. If you don’t follow the prompts to the letter, you will never get a chance to speak to one. Most people give up before they hear the prompt that states hold on to speak to a representative. So to help those callers with the prompt order to get to a representative without having to think or pay critical attention to the prompt’s message, here it is. Just remember that each prompt message is long. Let it play all the way through then listen for the next prompt.
- Select Option 1
- Select Option 2
- Select Option 2
- Select Option 2
3. Disagree in part-Again, do not sign the notice. Send the amount that you agree with. Send or fax documentation to the number or address shown on the letter with respect to why you disagree. Allow at least 30 days or more for a response.
What if you agree but can’t send full payment? You may request an installment plan by completing Form 9465 and mailing it to the appropriate IRS Service Center for your area or you may call 1-800-829-0922 between the hours of 7am-10pm to request a preassessed installment agreement. A preassessed installment agreement is one in which the balance has not been formally assessed because the CP 2000 is not a bill, it is an inquiry to determine whether the information contained therein is accurate. If it is, after several weeks you will be officially assessed the balance, which means that the IRS can legally collect the balance due, including levying your wages and garnishing your bank account.
Whether you agree or disagree, make sure that you respond to the letter within the prescribed time period. Failure to do so will result in your being assessed by default.
If you have any questions, please contact the number shown on your notice between the hours of 7am to 8pm using the menu instruction prompts shown above. If you have lost or misplaced your notice, contact the IRS directly at 1-800-829-0922 to obtain the number to call and to secure another copy. If you are near a fax machine at the time of the call, the representative may be able to fax a copy to you.
Finally, the best way to avoid a CP 2000 is to check all the entries from your tax return against your income documents for accuracy and completeness. In the end, you’ll be glad you did.
Published in: Personal Finance