Responding to a CP2000 Notice

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veeceeone
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Responding to a CP2000 Notice

Post by veeceeone » Sun Jul 07, 2019 5:53 pm

I received a CP2000 Notice recently. I have figured out the reason for the problems and prepared a response. I have read here that a faxed response reaches the correct unit in IRS the fastest and would like to fax my response. However, I am not sure that this will create proof that I responded in time.

Is there a way to create such a proof? Can I send a form of my creation for the IRS to fax back to me? Will they do it? I have also thought about faxing and then sending a backup copy via US Mail? Is this a good idea or will this just muck up things?

Thanks.

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whodidntante
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Re: Responding to a CP2000 Notice

Post by whodidntante » Sun Jul 07, 2019 6:03 pm

I am also getting audited, I disagree with the changes to my tax return that the IRS proposed, and I wrote the response yesterday. I plan to make a copy and mail it on Monday. Not registered mail or anything. I don't think the consequence is that horrible if they somehow don't get it, but I could be wrong. I will follow your thread with interest (but hopefully without penalties and interest :happy).

regularguy455
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Re: Responding to a CP2000 Notice

Post by regularguy455 » Sun Jul 07, 2019 6:33 pm

I had a CP2000 a few years back. I made a copy of the response and paid for delivery confirmation. Didn’t have any issues.

armeliusc
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Re: Responding to a CP2000 Notice

Post by armeliusc » Sun Jul 07, 2019 7:13 pm

I have gotten a CP2000 notice twice in the last 10 years. The first time was my mistake and I agreed with their correction and simply paid the extra tax. The second time was last year, I made the mistake of not filing the correct forms, but there was no tax consequence so I had to respond. I simply typed up my response, provided some evidence, and filled in what would have been the correct form.

I scanned everything as some kind of proof and simply mailed them with regular mail. Few weeks after the IRS responded that they had closed the case.

I would not worry about just using regular mail. I would not both mail and fax, as it would confuse things. Follow their instruction to the letter. In my CP2000 there is no option to fax, so I just mail it in.

mcraepat9
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Re: Responding to a CP2000 Notice

Post by mcraepat9 » Sun Jul 07, 2019 7:38 pm

veeceeone wrote:
Sun Jul 07, 2019 5:53 pm
I received a CP2000 Notice recently. I have figured out the reason for the problems and prepared a response. I have read here that a faxed response reaches the correct unit in IRS the fastest and would like to fax my response. However, I am not sure that this will create proof that I responded in time.

Is there a way to create such a proof? Can I send a form of my creation for the IRS to fax back to me? Will they do it? I have also thought about faxing and then sending a backup copy via US Mail? Is this a good idea or will this just muck up things?

Thanks.
Keep a scanned copy and send it certified mail return receipt. This has worked for all communication I’ve had with the IRS.
Amateur investors are not cool-headed logicians.

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AerialWombat
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Re: Responding to a CP2000 Notice

Post by AerialWombat » Sun Jul 07, 2019 7:47 pm

Send it certified mail return receipt. Keep the physical green card when it returns.
“Life doesn’t come with a warranty.” -Michael LeBoeuf

HawkeyePierce
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Re: Responding to a CP2000 Notice

Post by HawkeyePierce » Sun Jul 07, 2019 7:57 pm

I had a CP2000 a couple years ago and like others I found it easy to handle. I mailed in my response and a few months later got a letter from the IRS closing the issue and saying I owed no further tax.

Topic Author
veeceeone
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Re: Responding to a CP2000 Notice

Post by veeceeone » Sun Jul 07, 2019 8:08 pm

HawkeyePierce wrote:
Sun Jul 07, 2019 7:57 pm
I had a CP2000 a couple years ago and like others I found it easy to handle. I mailed in my response and a few months later got a letter from the IRS closing the issue and saying I owed no further tax.
Do you remember how many months it took? Thanks.

HawkeyePierce
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Re: Responding to a CP2000 Notice

Post by HawkeyePierce » Sun Jul 07, 2019 8:14 pm

veeceeone wrote:
Sun Jul 07, 2019 8:08 pm
HawkeyePierce wrote:
Sun Jul 07, 2019 7:57 pm
I had a CP2000 a couple years ago and like others I found it easy to handle. I mailed in my response and a few months later got a letter from the IRS closing the issue and saying I owed no further tax.
Do you remember how many months it took? Thanks.
I think it took about 3 months but I received mine and responded during tax season which may have delayed things.

Katietsu
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Re: Responding to a CP2000 Notice

Post by Katietsu » Sun Jul 07, 2019 8:29 pm

If this is a routine CP2000 notice, I would not go out of my way for proof that you responded. I know that it probably requests a response within 30 days. But if you do not answer, they will send another copy asking you again to respond within 30 days. If you got to that point, then you can get proof of the second response.

If you are ready to fax it, I would just do it.

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veeceeone
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Re: Responding to a CP2000 Notice

Post by veeceeone » Sun Jul 07, 2019 8:43 pm

armeliusc wrote:
Sun Jul 07, 2019 7:13 pm
In my CP2000 there is no option to fax, so I just mail it in.
There is a fax number in my CP2000. The following video mentions the fax option at Tim 1:25 or so:

https://www.youtube.com/watch?v=3R0POvqL3Ko

I don't want to be agonizing over this for the next several months but perhaps this cannot be helped. I saw a post here where someone mentioned that an IRS employee told him that a faxed return would reach her about a month sooner. I had sent my tax preparer the 1099 for the previous year by mistake and he didn't catch it either. The CP2000 shows the cost basis for about 90% of the listed sales but does NOT use it in calculating the gain. In other words, it treats the whole sale price as gain/income. This results in a very sizable proposed tax. I get nervous when I look at that number.

I have prepared a letter explaining this and also sent the correct 1099 to my tax preparer. I think that he will prepare a new Schedule D and Form 8949 for me to mail.

Topic Author
veeceeone
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Re: Responding to a CP2000 Notice

Post by veeceeone » Sun Jul 07, 2019 8:51 pm

Katietsu wrote:
Sun Jul 07, 2019 8:29 pm
If this is a routine CP2000 notice, I would not go out of my way for proof that you responded.
It is a routine CP2000 notice but the proposed amount is likely to keep me awake at night.

The 1099 from the wrong year was used by mistake. There were about 20 sales resulting in a net loss of about $500. (This was tax loss harvesting.)
However, CP2000 does not use the cost basis in calculating gain/loss, it simply treats the entire proceeds as gain/income. (It does have/show the cost basis.) Here is an example of the CP2000 doing this:

https://kbfinancialadvisors.com/you-got ... -now-what/

" from the CP-2000 Notice, it was clear that the IRS ignored the basis and treated 100% of the proceeds as taxable income.

And that, of course, was wrong, wrong, wrong!"
Katietsu wrote:
Sun Jul 07, 2019 8:29 pm
I know that it probably requests a response within 30 days. But if you do not answer, they will send another copy asking you again to respond within 30 days. If you got to that point, then you can get proof of the second response.

If you are ready to fax it, I would just do it.
This is good to know.

Thanks.

HawkeyePierce
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Re: Responding to a CP2000 Notice

Post by HawkeyePierce » Sun Jul 07, 2019 9:50 pm

Mine was similar. The CP2000 claimed I owed $10k or so. In the end I owed nothing (missed a 1099 because why would any sane person expect Schwab to send me two different 1099 forms?).

A CP2000 is nothing to stress over.

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billthecat
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Re: Responding to a CP2000 Notice

Post by billthecat » Sun Jul 07, 2019 10:08 pm

I got a CP2000 in 2018 for my 2016 return related to an IRA rollover I did where a check was issued to the receiving entity. I faxed my response in and got a reply three months later, accepting the rollover but still claiming I owed interest and penalties, which obviously made no sense. I replied (fax) again and three months later got closure confirmation.

I was told during this process that it’s likely no human was actually reading my replies.

I faxed it so I would have a confirmation. Obviously that’s a weak piece of evidence but it’s better than nothing and I wasn’t going to go the route of registered mail. Frankly, people should be able to upload a PDF.
We cannot direct the winds but we can adjust our sails.

BespokeBiker
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Re: Responding to a CP2000 Notice

Post by BespokeBiker » Sun Jul 07, 2019 10:44 pm

I received a CP2000 back in early May and am still awaiting the outcome, having replied with lengthy documentation + letter a week after receipt.

I found this article from a Forbes writer to be helpful & calming:
https://www.forbes.com/sites/ashleaebel ... 00-notice/

Topic Author
veeceeone
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Re: Responding to a CP2000 Notice

Post by veeceeone » Mon Jul 08, 2019 1:15 am

billthecat wrote:
Sun Jul 07, 2019 10:08 pm
I faxed it so I would have a confirmation. Obviously that’s a weak piece of evidence but it’s better than nothing and I wasn’t going to go the route of registered mail.
The immediate decision I have to make is "To fax or to go the route of registered mail." As I have written before, someone once has posted on this board that a faxed response reaches the concerned unit faster. Also, doesn't a successful fax show a record of each page being sent to the correct number as opposed to a piece of registered mail that only shows something was mailed but not the actual contents? Am I missing something? If I am right, isn't this a stronger piece of evidence than registered mail?
billthecat wrote:
Sun Jul 07, 2019 10:08 pm
Frankly, people should be able to upload a PDF.
I agree. Also, the computer program generating the CP2000 should subtract the basis from the proceeds when calculating gain (since it has that information and prints it out in the CP2000).

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Stinky
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Re: Responding to a CP2000 Notice

Post by Stinky » Mon Jul 08, 2019 4:44 am

Trust me - your sense of urgency in responding to the IRS is much stronger than the IRS’s sense of urgency in responding back to you.

When I received CP 2000 notice, I was certain that IRS was wrong and was initially flustered. I assembled my proof and sent in my response in about 3 days, registered mail with return receipt. IRS took about 3 months before closing my case with no tax due.

OP, if you want to fax, go ahead. It might clear your case a day or two faster. I prefer the comfort of the little green USPS return receipt card in my files.
It's a GREAT day to be alive - Travis Tritt

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veeceeone
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Re: Responding to a CP2000 Notice

Post by veeceeone » Mon Jul 08, 2019 7:18 am

Stinky wrote:
Mon Jul 08, 2019 4:44 am
Trust me - your sense of urgency in responding to the IRS is much stronger than the IRS’s sense of urgency in responding back to you.
ROTFL, ain't that the truth :-)

Topic Author
veeceeone
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Re: Responding to a CP2000 Notice

Post by veeceeone » Mon Jul 08, 2019 1:57 pm

A few more related questions. Tax preparer put the correct data into his software and determined that "I should owe the IRS $135 and get a refund from the state of $211. The IRS clearly says not to amend the tax return but to provide them the data, saying that they will make the corrections if they agree--around 1:38 in the following video.

https://www.youtube.com/watch?v=3R0POvqL3Ko

1. Should I go ahead and send in the $135 or wait for the IRS to bill me? I don't think that this involves any penalties or interest--I will ask the tax preparer whether they include any penalties or interest.

2. I didn't think about the state. I think that I should go ahead and file an amended return to the state, along with an explanatory letter. What do you guys think?

Thanks.

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billthecat
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Re: Responding to a CP2000 Notice

Post by billthecat » Mon Jul 08, 2019 3:21 pm

veeceeone wrote:
Mon Jul 08, 2019 1:15 am
billthecat wrote:
Sun Jul 07, 2019 10:08 pm
I faxed it so I would have a confirmation. Obviously that’s a weak piece of evidence but it’s better than nothing and I wasn’t going to go the route of registered mail.
The immediate decision I have to make is "To fax or to go the route of registered mail." As I have written before, someone once has posted on this board that a faxed response reaches the concerned unit faster. Also, doesn't a successful fax show a record of each page being sent to the correct number as opposed to a piece of registered mail that only shows something was mailed but not the actual contents? Am I missing something? If I am right, isn't this a stronger piece of evidence than registered mail?
YMMV but in my experience the fax receipt only shows the total number of pages. Of course, neither the fax receipt or registered mail confirmation confirm the contents, which is why it really ought to be a system where you can upload a PDF.
We cannot direct the winds but we can adjust our sails.

armeliusc
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Re: Responding to a CP2000 Notice

Post by armeliusc » Thu Jul 11, 2019 9:01 am

veeceeone wrote:
Sun Jul 07, 2019 8:43 pm
armeliusc wrote:
Sun Jul 07, 2019 7:13 pm
In my CP2000 there is no option to fax, so I just mail it in.
There is a fax number in my CP2000. The following video mentions the fax option at Tim 1:25 or so:
There is a fax number in CP2000, but the instruction in Response Form clearly and explicitly says "send it to us in the enclosed envelope so we can receive it by ... ". Why then would I risk thing by trying to speed things up by using Fax? And I didn't have a fax machine handy anyway. And as someone else had said, the IRS's sense of urgency is clearly much less that the taxpayer's.
veeceeone wrote:
Sun Jul 07, 2019 8:43 pm

I don't want to be agonizing over this for the next several months but perhaps this cannot be helped. I saw a post here where someone mentioned that an IRS employee told him that a faxed return would reach her about a month sooner. I had sent my tax preparer the 1099 for the previous year by mistake and he didn't catch it either. The CP2000 shows the cost basis for about 90% of the listed sales but does NOT use it in calculating the gain. In other words, it treats the whole sale price as gain/income. This results in a very sizable proposed tax. I get nervous when I look at that number.
The proposed tax amount is irrelevant if you know it's wrong and can be corrected. My proposed tax was some $16K, but I knew it was wrong. So I sent my response and didn't worry about it until IRS responded back. No need to agonized over it.

percolate
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Re: Responding to a CP2000 Notice

Post by percolate » Thu Jul 11, 2019 10:41 pm

I highly recommend calling the IRS' CP2000 line before faxing/mailing in a formal response. As a data point, I received a CP2000 today regarding a 1099-R the IRS had double-counted. I had to wait on hold for half an hour, but once I had a person on the line they immediately spotted the mistake, apologized, and cancelled the notice.

I've always found the IRS' phone support to be around the same quality as Vanguard's: A little bureaucratic, but overall friendly and competent.

Topic Author
veeceeone
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Re: Responding to a CP2000 Notice

Post by veeceeone » Sun Jul 14, 2019 3:53 pm

I have prepared a detailed reply, scanned it, and sent the electronic version to my tax preparer for review. (I used to live in his town but have now
moved about 60 miles away but still use him.) Once he agrees that it is good to go, I plan to mail the hard copy to the IRS with the return receipt option.

Once I receive the return receipt, I plan to call the CP2000 line and let them know what happened and what kind of documents I have sent. I completely realize that this is rather superfluous. However, I don't see any problems doing this. All I want them to do is to make a note of what I am saying. I don't quite expect them to cancel my CP2000. (By mistake, I had sent the wrong year's 1099 to my tax preparer--he didn't catch the error either. The new set of documents are based on the correct year's 1099. The IRS would want to see the Schedule D and Form 8949 based on the correct year's 1099 before they will close this CP2000. The tax I end up owing is only $135. This was for Tax Year 2017. As I understand the rules, I don't think that I will be charged a substantial understatement of income tax penalty.) Any advice regarding this? Thanks.

HawkeyePierce
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Re: Responding to a CP2000 Notice

Post by HawkeyePierce » Sun Jul 14, 2019 4:46 pm

Two thoughts:

1) If you have a tax preparer why isn't he dealing with all of this?

2) There is no need to call. Just mail off your response, it will work out.

A CP2000 is not a big deal. This isn't anything to lose sleep over. :)

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veeceeone
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Re: Responding to a CP2000 Notice

Post by veeceeone » Sun Jul 14, 2019 6:43 pm

HawkeyePierce wrote:
Sun Jul 14, 2019 4:46 pm
If you have a tax preparer why isn't he dealing with all of this?
He prepared the documents, we met in person, and I brought them home. While reviewing them at home, I found one error and pointed this out to him. He modified the documents and sent them by email. I want him to review the whole package one more time before I mail it off. This scanned file also serves the purpose of being my final copy (as well as his). Also, I think that he can do a better job of reviewing the package sent via email as opposed to me and my wife standing in front of him and distracting him.

One good thing to come of all these is that a relationship is getting built between him and us. He is new to us. I have been using this family based business for a long time but my previous guy (whose children and ours went to all 12 grades of school together) retired after the 2017 tax year.

Based on this experience, I am going to at least check that the data input is correct. Previously, I didn't even do that. I had sent the 1099 for the wrong year and the previous guy didn't catch it. If I had checked, I would have caught the error.

I don't understand the calculations involved. I have thought of using Turbo Tax to just double check. I still like having the advice of a knowledgeable human who asks me the right questions. If I did it myself, I may miss some things and will also take a much longer time, better spent in my other activities.

Katietsu
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Re: Responding to a CP2000 Notice

Post by Katietsu » Sun Jul 14, 2019 6:46 pm

If you are responding by mail in a timely manner, there is no reason to call. I would send what you owe them. It seems clear. There is a good chance they will not even follow up for any interest or penalties given the nature and size of the error.

I would file amended for the state. Then try to forget about for a while.

Is this the advice of your tax preparer?

Topic Author
veeceeone
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Re: Responding to a CP2000 Notice

Post by veeceeone » Sun Jul 14, 2019 6:54 pm

Katietsu wrote:
Sun Jul 14, 2019 6:46 pm
If you are responding by mail in a timely manner, there is no reason to call. I would send what you owe them. It seems clear. There is a good chance they will not even follow up for any interest or penalties given the nature and size of the error.

I would file amended for the state. Then try to forget about for a while.

Is this the advice of your tax preparer?
We are filing amended for the state. What you said is the advice of the tax preparer, with two exceptions:

1. He suggested that we file an amended Federal also, but mark it as CP2000. (CP2000 gives us this option.)

2. He also suggested that we not send any money at this time but wait for them to send us a bill.

CrazyPuli
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Re: Responding to a CP2000 Notice

Post by CrazyPuli » Sun Jul 14, 2019 7:14 pm

veeceeone wrote:
Mon Jul 08, 2019 1:57 pm
1. Should I go ahead and send in the $135 or wait for the IRS to bill me? I don't think that this involves any penalties or interest--I will ask the tax preparer whether they include any penalties or interest.
I've gotten a couple of these over the last 5 years. One was my mistake, the other was Schwab's. In both cases I was not going to owe what they said I did. I sent them the full amount along with an explaination of what I thought it should be. They sent me a refund check for the difference. I thought it was better to play it safe and not risk any additional intrest.

ryman554
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Re: Responding to a CP2000 Notice

Post by ryman554 » Mon Jul 15, 2019 12:16 am

veeceeone wrote:
Sun Jul 14, 2019 6:43 pm
HawkeyePierce wrote:
Sun Jul 14, 2019 4:46 pm
If you have a tax preparer why isn't he dealing with all of this?
He prepared the documents, we met in person, and I brought them home. While reviewing them at home, I found one error and pointed this out to him. He modified the documents and sent them by email. I want him to review the whole package one more time before I mail it off. This scanned file also serves the purpose of being my final copy (as well as his). Also, I think that he can do a better job of reviewing the package sent via email as opposed to me and my wife standing in front of him and distracting him.

One good thing to come of all these is that a relationship is getting built between him and us. He is new to us. I have been using this family based business for a long time but my previous guy (whose children and ours went to all 12 grades of school together) retired after the 2017 tax year.

Based on this experience, I am going to at least check that the data input is correct. Previously, I didn't even do that. I had sent the 1099 for the wrong year and the previous guy didn't catch it. If I had checked, I would have caught the error.

I don't understand the calculations involved. I have thought of using Turbo Tax to just double check. I still like having the advice of a knowledgeable human who asks me the right questions. If I did it myself, I may miss some things and will also take a much longer time, better spent in my other activities.
That's not really a good thing.

You should understand the calculations in your tax forms. Because, ultimately, you are responsible for their correctness, whether you use a preparer or not

If all you have are 1099R,. then taxes should be a breeze to do by yourself. The math isn't that hard, and it would do you good to break out the pencil and paper to do a form by hand once. Once you can do that, something like TurboTax or the cheaper/free alternative can be used to avoid simple math error, while understanding if the return is correct or not.

This advice changes once you have non low frequency mutual fund investments.... But not by much. You owe it to yourself to learn, so you don't have to rely on /pay for a "friend" to do your work.

I say this because, if your friend really submitted this return with the wrong year 1099 (REGARDLESS of if it was your mistake or theirs) , they aren't a very good tax preparer, and certainly not worth your money,. because they do not have good attention to detail.

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veeceeone
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Re: Responding to a CP2000 Notice UPDATE

Post by veeceeone » Sat Aug 24, 2019 10:49 am

Yesterday, I received a 4314C by mail. It said that the IRS is still working on my CP2000 response, they don't need any more information from me, and they will send a complete response within 60 days. It wasn't clear whether the 60 days is from the day they received my response or the date of the 4314C. I am guessing that it is the former.

What I liked was that they sent me a response about 60 days from receiving my paperwork, rather than leaving me hanging for an extended period of time. They also gave me a different number to call--I assume that this is a number of the people actually processing my CP2000 response and this may not result in a long wait time. [ One can hope, right? :-) ]

The day was not without drama :-) I knew from USPS Informed Delivery email that I am getting a letter from the IRS. I went at 3.30 PM to check my mail at my box. This mail wasn't there. Normally, I get my mail by 3.30 PM. There was some mail. I wasn't sure whether it was the previous day's mail or yesterday's mail. I didn't want to worry about this the whole weekend. So, I called the number in my CP2000. After an interminable wait, I got a lady who told me that I will be getting a 4314C (and not the final decision that I had hoped for). After hanging up with her, I went to mail box again, only to see my mail being delivered. (They were late for some reason.) I did get the 4314C in the mail.

When I called the IRS, before they put me on hold, the automated line said several things, all answers to question I had asked in this thread:

Faxed responses do NOT get faster response
If you fax a response, don't send a hard copy also

There may have been more. I wish I had called the IRS when I first got the CP2000 and just listened to the automated part.

All correspondence from IRS comes in envelopes that look like junk mail similar to the ones that sells me warranty on automobiles that I no longer have :-) This is my only beef with them.

I am providing all this information to help the next person who gets a CP2000. I should be done with this in a month, I think.

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midareff
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Re: Responding to a CP2000 Notice

Post by midareff » Sat Aug 24, 2019 10:51 am

regularguy455 wrote:
Sun Jul 07, 2019 6:33 pm
I had a CP2000 a few years back. I made a copy of the response and paid for delivery confirmation. Didn’t have any issues.
Have been audited a couple of times in the last couple of decades. I too made a copy of the response and paid for delivery confirmation.

RCL
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Re: Responding to a CP2000 Notice

Post by RCL » Sat Aug 24, 2019 11:05 am

Thank you for the update
It Is Best To Consult Others Before Taking Unusual Actions

Rdytoretire
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Re: Responding to a CP2000 Notice

Post by Rdytoretire » Sat Aug 24, 2019 11:08 am

I have been dealing with a CP2000 issue similar to yours. Getting it resolved was fairly simple but it did take time. Only issue is now I have to amend my state tax return. This requires a copy of a federal finalization form. The IRS makes no mention of and has not provided this form. I called the IRS and through their automated system managed to have a copy of the account transcript mailed to me. This details the changes that were made to my account. I am hoping this is all the state will need from the IRS to process my amended return but I am unsure of that.

My amended state return states that IRS 1040X and a copy of the check is proof of federal finalization. The problem is that the IRS did not require or request that I submit a 1040X. I plan to provide the state with the information I have available to me. In many ways resolving the issue with the IRS was much simpler than amending my state return.
Last edited by Rdytoretire on Sat Aug 24, 2019 11:17 am, edited 1 time in total.

Silk McCue
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Re: Responding to a CP2000 Notice

Post by Silk McCue » Sat Aug 24, 2019 11:16 am

I received a CP2000 notice date June 17, 2019 stating I owed $30k for taxes, interest and penalties for under reporting of income on my 2017 return. This was due to an error on my part when I filed my taxes regarding and indirect transfer between John Hancock and Vanguard when I chose to pull the plug on an old tax deferred Variable annuity a year into my Boglehead journey.

I pulled my records, identified the key documents to show when the funds left JH via check, and when they arrived at Vanguard after I received the check and forwarded it on directly. I wrote a letter that detailed what occurred on a day by day basis and referenced the annotated documents in the following pages. I faxed this to them on July 11 using MyFax website and printed the confirmation sheet in case a problem occurred later. You can sign up for MyFax and cancel after one month.

The IRS mailed me a form letter on August 12 telling me they had received my response and would review and provide a complete response within 60 days.

I'll let you know when they respond back.

Cheers

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veeceeone
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Re: Responding to a CP2000 Notice

Post by veeceeone » Sat Aug 24, 2019 11:29 am

The IRS mailed me a form letter on August 12 telling me they had received my response and would review and provide a complete response within 60 days.
The Form Letter should be the LTR 4314C. The second line in the top right should say "LTR 4314C".

Do you know whether the 60 days is from the date they received your CP2000 response or from the date of the 4314C? I am guessing that is the latter.

Prior to sending me the CP2000, they had sent me a CP2501. I mistook it for junk mail (or for some other reason), I just put it in the unimportant pile. I wish that they had sent it certified mail. I would have gladly paid for the certified mail. I wouldn't have let things go on to the CP2000 level. (CP2000 is more "stiff" than the CP2501.) This is my only beef with the IRS.

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J G Bankerton
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Re: Responding to a CP2000 Notice

Post by J G Bankerton » Sat Aug 24, 2019 11:31 am

I got a CP2000 notice because I put the wrong taxable amount down for a 1099. I included the 1099 with my taxes but found out the IRS doesn't read the W2 or 1099. I just reviewed my records and it took months and many phone calls to clear this up. As was stated the IRS doesn't treat this with the same urgency as the recipient of the form does.

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veeceeone
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Re: Responding to a CP2000 Notice

Post by veeceeone » Sat Aug 24, 2019 11:36 am

J G Bankerton wrote:
Sat Aug 24, 2019 11:31 am
As was stated the IRS doesn't treat this with the same urgency as the recipient of the form does.
Agree :happy

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Re: Responding to a CP2000 Notice

Post by Silk McCue » Sat Aug 24, 2019 11:37 am

veeceeone wrote:
Sat Aug 24, 2019 11:29 am

The Form Letter should be the LTR 4314C. The second line in the top right should say "LTR 4314C".

Do you know whether the 60 days is from the date they received your CP2000 response or from the date of the 4314C? I am guessing that is the latter.

Prior to sending me the CP2000, they had sent me a CP2501. I mistook it for junk mail (or for some other reason), I just put it in the unimportant pile. I wish that they had sent it certified mail. I would have gladly paid for the certified mail. I wouldn't have let things go on to the CP2000 level. (CP2000 is more "stiff" than the CP2501.) This is my only beef with the IRS.
Yes 4314C. It is clear that it is 60 days from the date of the 4314C.

The CP2000 was the first document received a letter was coming from the IRS as I use USPS Informed Delivery. I'm glad it wasn't an audit request as I did two of those over a decade ago and they take a lot more work (proving itemized deductions including large charitable).

Cheers

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Re: Responding to a CP2000 Notice

Post by jebmke » Sat Aug 24, 2019 11:37 am

J G Bankerton wrote:
Sat Aug 24, 2019 11:31 am
I got a CP2000 notice because I put the wrong taxable amount down for a 1099. I included the 1099 with my taxes but found out the IRS doesn't read the W2 or 1099. I just reviewed my records and it took months and many phone calls to clear this up. As was stated the IRS doesn't treat this with the same urgency as the recipient of the form does.
The IRS already has the W2 and 1099 in electronic form. They don't need to read it. Nobody reads your tax return; if you send in a paper return someone "reads" it enough to key it into their system but that is strictly a data entry process. In fact, the instructions on the 1040 specifically say only send 1099-R if there was tax withheld so a paper return may well not even have all the 1099s included.
When you discover that you are riding a dead horse, the best strategy is to dismount.

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Re: Responding to a CP2000 Notice

Post by Silk McCue » Sat Aug 24, 2019 11:40 am

veeceeone wrote:
Sat Aug 24, 2019 11:36 am
J G Bankerton wrote:
Sat Aug 24, 2019 11:31 am
As was stated the IRS doesn't treat this with the same urgency as the recipient of the form does.
Agree :happy
This reminds me of my mom telling me "Don't make me tell you twice ...". Now that was a statement that instilled urgency!

Cheers

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J G Bankerton
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Re: Responding to a CP2000 Notice

Post by J G Bankerton » Sat Aug 24, 2019 11:57 am

jebmke wrote:
Sat Aug 24, 2019 11:37 am
J G Bankerton wrote:
Sat Aug 24, 2019 11:31 am
I got a CP2000 notice because I put the wrong taxable amount down for a 1099. I included the 1099 with my taxes but found out the IRS doesn't read the W2 or 1099. I just reviewed my records and it took months and many phone calls to clear this up. As was stated the IRS doesn't treat this with the same urgency as the recipient of the form does.
The IRS already has the W2 and 1099 in electronic form.
The IRS sent me the CP2000 in September of 2010 for tax year 2008. They thought I was hiding well over $5,000 in income. That is the magic number where they get very serious, every IRS person I contacted gave me their badge number.

The problem was them thinking there were two 1099s, the one I sent them and the one my employer sent them were the same but they never read the one I sent. I called and the guy with the "badge" figured out in five minuets that there was only one 1099 but it still took months to get it straightened out.

I know they don't read W2 or 1099 but why do I have to send them? The badges at the IRS had no answer. If I didn't send mine there would have been no problem except for the $33 extra I wound up owing. Like the OP the amount they wanted was shocking and worrisome. I learned not to mess with the IRS, they don't play.

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veeceeone
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Re: Responding to a CP2000 Notice

Post by veeceeone » Sat Aug 24, 2019 12:05 pm

Like the OP the amount they wanted was shocking and worrisome
I will disclose the amount once this is all settled.

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Re: Responding to a CP2000 Notice

Post by White Coat Investor » Sat Aug 24, 2019 12:19 pm

veeceeone wrote:
Sun Jul 07, 2019 5:53 pm
I received a CP2000 Notice recently. I have figured out the reason for the problems and prepared a response. I have read here that a faxed response reaches the correct unit in IRS the fastest and would like to fax my response. However, I am not sure that this will create proof that I responded in time.

Is there a way to create such a proof? Can I send a form of my creation for the IRS to fax back to me? Will they do it? I have also thought about faxing and then sending a backup copy via US Mail? Is this a good idea or will this just muck up things?

Thanks.
The IRS is my pen pal. We exchange letters at least once a quarter about my various returns. Their reputation is far worse than their bite so long as you're actually trying to do what you're supposed to do. Once I started filing 941s as an S Corp, they have sent me notices asking why I didn't file 941s for each quarter of the prior two years before I started having to file them. Then they ask again sometimes. Or I tell them I screwed up my 941 and they send me some money back. Or whatever. I don't even get that little feeling in your stomach when you see a letter from the IRS any more.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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veeceeone
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Re: Responding to a CP2000 Notice

Post by veeceeone » Sat Aug 24, 2019 12:30 pm

I don't even get that little feeling in your stomach when you see a letter from the IRS any more.
ROTFL :happy :happy

This is my first time, my friend.

I did have chest tightening but just for a few hours. Coincidentally, I had talked to a new tax preparer for this year, gave him my last year's return, agreed to use him when I got all my paperwork, changed my mind about using him, and thought that he was somehow getting even with me. At that time, I was not even aware of the mistake I had made in my 2017 return.

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Re: Responding to a CP2000 Notice

Post by Stinky » Sat Aug 24, 2019 12:32 pm

White Coat Investor wrote:
Sat Aug 24, 2019 12:19 pm

The IRS is my pen pal. We exchange letters at least once a quarter
As the old saying goes, “With friends like this, who needs enemies.” :happy
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J G Bankerton
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Re: Responding to a CP2000 Notice

Post by J G Bankerton » Sat Aug 24, 2019 12:47 pm

White Coat Investor wrote:
Sat Aug 24, 2019 12:19 pm
The IRS is my pen pal. We exchange letters at least once a quarter about my various returns. Their reputation is far worse than their bite so long as you're actually trying to do what you're supposed to do.
I noticed that. When they thought I was hiding over $5,000 in income they treated me like a cop treats a suspect. When they realized it wasn't criminal but a simple mistake their demeanor changed.

jebmke
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Re: Responding to a CP2000 Notice

Post by jebmke » Sat Aug 24, 2019 12:59 pm

Their matching system leaves a lot to be desired. Most of the letters initially cranked out are done by machine. It may sound like someone poured over your return but they probably did not. It got kicked out due to hitting a flag or a mismatch. There aren't many humans left at the IRS and most individual taxpayers aren't on their radar screen.

I've found that the cycle time for correspondence is anywhere between 60-90 days depending on how much stuff is involved. When my 2009 return kicked out it didn't get resolved until the middle of 2012. So when my TaxAide clients get a letter I try to encourage them to settle in for the long haul.
When you discover that you are riding a dead horse, the best strategy is to dismount.

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veeceeone
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Re: Responding to a CP2000 Notice

Post by veeceeone » Sat Aug 24, 2019 1:20 pm

Maybe I am getting my hopes too high but I still think that my issue will be resolved within 60 days of my response reaching them. The lady I talked to on the day I got my 4314C told me that I could/should call after two weeks bu not sooner.

So far, I only have the following two problems (mainly the first) with the IRS:

1. In their CP-2000, they are completely ignoring the basis which they have and are showing in the CP-2000. They are scaring the public. This may be a scare tactic.
2. I wish that their mails don't look like junk mails. My CP-2501 just fell through the cracks.

Anyway, thanks for all your friendly comments. I am enjoying them.

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Re: Responding to a CP2000 Notice

Post by jebmke » Sat Aug 24, 2019 1:32 pm

veeceeone wrote:
Sat Aug 24, 2019 1:20 pm
In their CP-2000, they are completely ignoring the basis
This is because the basis that is reported to the IRS isn't necessarily the correct basis. On form 8949 there is a column for the taxpayer to enter adjustments to basis. It would be wrong for them to simply assume that there are no adjustments.
When you discover that you are riding a dead horse, the best strategy is to dismount.

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J G Bankerton
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Re: Responding to a CP2000 Notice

Post by J G Bankerton » Sat Aug 24, 2019 1:56 pm

veeceeone wrote:
Sat Aug 24, 2019 1:20 pm

2. I wish that their mails don't look like junk mails. My CP-2501 just fell through the cracks.
They do that so the letter doesn't attract attention. Mail thieves look for letters that may have personal information. Whenever I get a credit card in the mail it comes in one of those generic type envelopes. I now open junk mail to have a quick look before shredding.

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