Notice of Underreported Income – CP-2000

This is the most common notice the IRS sends out. In our experience, the IRS usually sends these notices out 10 months to 2 years after your return was filed. If you forgot to put a W-2 or a 1099 on your tax return this is the notice you will receive. Most times they are correct, but not always. We have seen cases where the taxpayer's identity has been stolen by an illegal alien who is working under their Social Security Number. The Audit Detective Deluxe Analysis is a great tool for checking to see if this happened not only for the year in question, but the other years as well.

The IRS compares the information reported by employers, banks, businesses and other payers on forms W-2, 1098, 1099, etc., with income and deductions reported on your income tax return. If you failed to report any income, payments, and/or credits (or if you overstated certain deductions) on an income tax return, you may receive a Notice CP-2000.

The notice will show the adjustments proposed by the IRS, the amounts you reported on your original return, and the amounts reported to the IRS by the payer. The notice will also provide the name of the payer, the payer's ID number, the type of document that was issued (i.e., W-2, 1099), and the social security number of the person to whom the document was issued. Based on the adjustments, the notice proposes either an increase or decrease to your tax liability (or the amount to be refunded to you).