Receiving a CP2000, also known as a correspondence audit, sure sounds scary, but in most cases, you don’t actually owe any more money. Not that the IRS will make that clear—it’s likely billing you because of a discrepancy on a certain deduction or reported income; then it’s up to you to prove otherwise. But as the number of these audits have risen, up 176 percent since 2000, the chance for error goes up as well. The IRS says 98 percent of the audits it sends out require clarification, not payment, but Charlotte Ogorek, an Illinois-based enrolled agent, thinks it’s more like 85 percent.
Even if the charge is unfounded, to appeal it could cost you anywhere from $500 to $4,000, depending on how long it takes, says Bill Wandel, a licensed taxpayer rep at JK Harris. If you plan to challenge a CP2000, contact your local taxpayer advocate from the IRS (go to www.irs.gov/advocate to find yours), who will provide advice and representation free. If it turns out you need even more expertise, contact a tax lawyer or an enrolled agent (a professional licensed by the IRS to represent taxpayers in front of the IRS). Find one at www.naea.org.
I just have a question… hopefully someone knows. I received one of these and marked the option 3 on the letter and sent back. Since I sent it in I have not recieved any additional letters or contact at all. So I have proof that they had mistaken the years… But I am not sure if no response is a good response or if I should get some form of notification. So now when i file my current taxes… i am worried that if there was something wrong then, i would not recieve the money they owed to me for 2009. Im concerned.. if anyone could help i would appreciate it.
Fallout kicks ass
Got one of these letters today, Dec. 2009. Claiming some adjustment to my 2007 returns. I was able to call the number listed and talk with one of the IRS people and after informing him that it was the IRS that missed my deduction…..he agreed (NOW I’m frighten). He stated that a letter or cancellation/form would be forward to be in 4 weeks……but this is where they get you…The letter that I got from them states that I must respond to this letter using the form send to me, by them by Jan. 2010, way less then the 4 week cancellation form I’m suppose to get from them..so I think, telephone conversation or not, I’m going to send their form back marked Option # 3 I DO NOT AGREE WITH ANY OF THE CHANGES, I enclosed documentation to support the entries on my original returns.
10 Things the IRS Won't Tell You: http://bit.ly/5DyXaq