When the IRS sends you a CP14 Notice in the mail, it is because you have a current IRS tax balance owed. This notice informs you of the amount owed, including tax, interest, and any applicable penalties, and demands payment.

The CP14 notice is a progression notice in the IRS collection scheme. This notice gets generated after a tax balance has already been assessed. Typically, the tax balance stems from a recent tax return filing. The IRS is now initiating its collection actions by sending you a payment reminder. If no response is made, the IRS will begin further escalated collection activities such as initiating tax liens, securing wage garnishments, making financial account levies, requesting passport revocation from US State Department, and obtaining property foreclosure judgments. Consider the CP14 Notice as an IRS kickoff point for future collection activities to commence.

The best way to avoid any IRS escalated collection activities is to respond to the CP14 Notice as soon as possible. Talking to a tax professional is a good idea to assess your situation and properly determine the best resolution action.

Why Does the IRS Send Out CP14 Notices?

The IRS mainly sends a CP14 Notice to inform you that an outstanding tax balance is due. Here are some of the typical reasons for this :

• Non-payment or Underpayment of tax balance: The IRS will generate CP14 Notice if you did not fully pay the balance owed a balance from your recent tax return.
• Lack of response to prior IRS notification: You may have a current tax balance resolution in place with the IRS, and they remind you of this. Or you have not responded to prior notices, and this is just a reminder notice of your tax balance due.
• Tax Return Mistakes or Discrepancies: If your tax return contains errors or discrepancies which result in taxes due, the IRS will issue a CP14 notice. However, in most cases, before the IRS issues the CP14, they will have sent you a notice of the changes made, followed by a notice of the respective tax assessment. The IRS must always assess a tax before any collections can be pursued.

The IRS usually does not begin to send out CP14 notices for a significant amount of time after a tax return has been filed, provided the tax balance is owed. If you have not paid your taxes, the IRS will eventually come around to you. This CP14 indicates that you are now on notice with the IRS, requiring immediate action, or elevated collection actions will soon commence.

What Is Listed Within an IRS CP14 Notice?

To respond appropriately, fully understanding what the CP14 Notice contains is essential. CP14 Notices include the following:

• The Individual Notice number: The IRS assigns a unique number for reference. When responding to IRS about the notice, you will want to reference it.
• Specific Tax Year(s)/Periods: – the time frame the notice covers.
• Balance Due: The notice provides a total amount along with a breakout of this amount for tax, interest, and penalties.
• Payment Options: The IRS will provide information on making payments and even mention potential payment options, such as setting up and installing a plan.
• Balance Due Date: There will be a date listed by which you must either pay the amount owed or take some action regarding addressing the balance due. Regardless of the notice type, dates are essential to adhere to avoid escalation or to be able to seek specific date-sensitive remedies.

By timely and diligently going through the notice, you will be able to determine the correctness of the information, properly assess your situation, allow enough time for professional tax help, and fully understand your options. In addition, timely responding to this notice enables you to halt the IRS from taking further collection activities. In contrast, not responding to this notice will only make the situation take a turn for the worse.

Can I Ignore a CP14 Notice?

The CP14 Notice has several purposes: to inform you of an IRS tax balance due and to provide information on how to pay it off. Getting an IRS CP14 Notice means you are now on the IRS radar, and your tax debt situation requires resolution. Ignoring it is not a viable option. You should take it seriously and address your tax debt promptly to avoid the potential consequences. No response to this notice will only trigger the future collection activities:

• Interest and Penalties: By not addressing the tax debt, interest and penalties will continue accumulating, which could significantly increase the tax debt balance.
• Property Liens: The IRS can place a lien against current and future ownership rights in a property, which could impair your ability to sell or leverage the property until the tax debt is satisfied.
• Wage garnishments: Your wages or earnings could be garnished.
• Bank Levies: Your accounts held in financial institutions could be levied.
• Passport revocation: Depending on your tax balance amount, the IRS may petition the State Department to revoke your US passport.
• Refund Denials: Future tax refunds will be withheld and applied toward the balance due.
• Property Foreclosures: IRS could seek a judgment to have your property foreclosed on.

It may be that the IRS has a mistake listed with the notice, which, had you taken timely action, could have resolved the issue in your favor. Taking proactive steps to resolve the issue can mitigate the negative impact on your finances and maintain good standing with the IRS.

How Do I Respond to an IRS CP14 Notice?

The first thing to do upon receipt of the CP14 Notice is take a step back and read it thoroughly to ensure you understand what’s in the notice, what actions are available to take, and when you must respond. You will then want to confirm the accuracy of the amounts listed within the notice. You want to ensure you understand any differences.

How Do I Contest an IRS CP14 Notification?

If often wise to have a tax attorney-CPA to provide strong guidance here. If you disagree with IRS CP14 Notification, depending upon your situation, you can contest several ways:

• Requesting an appeal or review of your information.
• Submitting an Offer in Compromise based on Doubt to Liability.
• Paying the taxes under protest and then applying for a refund.
• Filing for Innocent Spouse Relief.

What Should I Do if the IRS CP14 Notice Is Correct?

If the amount tax balance due is correct, the focus should then shift to which of these payment options would best fit your situation:

• Paying the balance in full
• Applying for a monthly installment payment program, of which there are several types.
• Seeking a Partial Pay Installment Program
• Establishing Currently Not Collectible Status
• Requesting an Offer in Compromise – Doubt to Collectability

Whether you are seeking to contest or affirm what’s listed within your CP14 Notice, time is always of the essence when responding. Late responses or lack of responses could be very costly. If you are unsure of how to respond or how to do so in the best way reflective of your situation, consult with a tax professional to properly guide you.

What Are the Best Ways to Avoid Getting an IRS CP14 Notice?

The best way to avoid getting CP14 Notices is by doing the following:

• Full pay your taxes or plan with IRS to pay them. There are several payment options for possible consideration. Ensuring working with the IRS is best practice if you need payment considerations.
• Make sure all income is completely reported on tax returns. This will prevent the IRS from assessing additional taxes, therefore not having to send you notices of increased taxes owed. They will still send a CP14 for the balance due if no arrangements have been made.
• Have good recording-keeping processes in place to ensure accuracy on your tax filings.
• Make sure to double-check items entered onto returns. Doing this will help avoid unnecessary discrepancies, which could lead to tax increases resulting in CP14 Notice issuance.

Does Getting an IRS CP14 Notice Mean I am Getting Audited?

The CP14 notice pertains to money you owe, whereas an audit notice is for verifying a position taken on your tax return.

The CP14 notice is a widespread notice issued to everyone who owes back taxes. Audits are not as prevalent since they only occur if you are chosen because of the IRS’s specific concerns with your filed tax return or if you have been randomly selected.

The CP14 notice pertains to money you owe, whereas an audit notice is for verifying a position taken on your tax return.

Take Immediate Action When You Receive an IRS CP14

Responding immediately, or at least by the date listed within the CP14 Notice, is the best way to avoid dealing with further enhanced IRS collection actions. The notice provides instructions on how to make the tax payment, set up an installment payment plan, or how to dispute the findings. Other options may also be considered, such as seeking penalty abatement.

Having an experienced and knowledgeable tax attorney-CPA to provide tailored guidance to your situation will ensure that your resolution path is correct. If you have received an IRS CP14 Notice, please get in touch with multi-licensed tax attorney-CPA-IRS Enrolled Agent Will Harmon of Harmon Tax Resolution, LLC, for a free consultation on how he may provide the best tax solution for your situation. Please call 772-418-0949 or complete the Online Inquiry Form. You don’t have to face this alone.

Get Trusted Professional Tax Help with IRS Tax Notifications – Make the Call

Additional helpful information:

• “What Should I Do If I Receive an IRS Notice?“
• “What to Do If You Receive an IRS Statutory Deficiency Notice“
• “What Are IRS Tax Resolution Services?“
• “When Should You Hire a Tax Lawyer?“

The IRS cannot engage in collections activities against you without an assessed tax in place first. Before an IRS tax assessment occurs, you, the taxpayer, have a right to be informed of any pending assessment. To facilitate your awareness of a pending IRS tax assessment, the IRS has a statutory system that issues you a Notice of Deficiency delivered by certified or registered mail. The Statutory Notice of Deficiency details what is being assessed and how it was calculated.

The IRS Statutory Notice of Deficiency is a vital due process function that plays a critical role in many IRS activities, such as appeals and tax litigation, and is a significant catalyst for enabling IRS collection activities to engage. If you receive an IRS Statutory Notice of Deficiency, it is critical to immediately assess and take action, especially while all appeal and rebuttal venues remain at your disposal. Getting a tax professional to help you initially may be your best option.

What is an IRS Statutory Notice of Deficiency?

A Statutory Notice of Deficiency is a legal determination by the IRS of a taxpayer’s tax deficiency. It is an official written claim that a taxpayer owes additional income tax (and additional penalties and interest). It is issued when the IRS proposes a change to a tax return because they found that the information reported on a return does not match their records. The IRS’s requirement to issue a notice of deficiency is stated in Internal Revenue Sections 6212 and 6213. These sections promulgate the rule that unless the IRS sends out a timely and valid notice of deficiency, any tax liability assessed by the IRS is invalid.

What Triggers the IRS to Issue a Notice of Deficiency?

External parties, such as employers, financial institutions, and brokers, report taxable transitions to the IRS. For example, when an employer issues a 1099-NEC form to a contractor, the employer also issues this information to the IRS. The same generally holds for when a broker issues you a 1099-B which reflects investment activities, it also has issued this information to the IRS. When these records are either missing or do not match what has been reported in your tax return, IRS will initiate a correction and or addition, which gets listed within the deficiency notice. To help avoid having the IRS make adjustments to your tax return, it’s crucial to double-check for any 3^rd party omissions or misreporting of your tax return before filing.

The IRS Statutory Notice of Deficiency Comes in What Forms?

The official name for a Statutory Notice of Deficiency is the IRS Notice CP2319A (or CP2319N): Notice of Deficiency and Increase in Tax. A Statutory Notice of Deficiency is often called an IRS 90-Day Letter, a Notice of Deficiency, or a Statutory Notice.

Depending up how the IRS determines the tax deficiency will determine whether a CP3219A Notice or a CP3291N Notice is used. Here are some clarifications the IRS uses to determine which form is applicable to use:

• CP3291N If the IRS did not receive your tax return and then prepared your return based on wages (W2s) and other income (1099s) reported by third parties, the IRS will issue the CP3291N. When the IRS prepares your tax return, this is referred to as a Substitute For Return (SFR). Although it may seem convenient that the IRS would do this for you, the outcome will not be in your favor since the IRS will not include any allowable credits or deductions during the processing of your return resulting in a higher tax than if you had it prepared. There are additional drawbacks to taxpayers when SFR returns are prepared. Also, the IRS will not prepare an SFR if you are due a refund. For more information, please see this blog, “The IRS May Prepare a Substitute for Return in Place of an Unfiled Tax Return“
• CP3219A If the IRS receives information that is different from what you reported on your tax return, the IRS will issue this notice. The change may result in an increase or decrease in tax. An omission of a form listed on your tax return will trigger this notice type.

What Information Is Provided within an IRS Statutory Notice of Deficiency?

The notice will provide the applicable tax year in question and the amounts of the proposed adjustments. There will be a listing portraying how the amounts were calculated. It is essential to verify the accuracy and validity of any proposed adjustments. It often comes down to providing missing information that could clear everything up. For example, if you were to receive a notice that states you owed taxes from a capital gain from the sale of your home, which was not reported on your tax return. The IRS had a 1099S which lists the amount of the proceeds from the home sale, as reported by the broker; however, it did not either list the basis of the property or any potential capital gain exclusion amounts you may be entitled to. Now, you are faced with a tax debt, penalties, and interest, none of which you would owe if correct information were provided.

In addition, there may be an accompanying IRS Form 5564, Notice of Deficiency Waiver. If you agree with the tax amounts listed within the deficiency notice, IRS provides this form for you to sign off on and send to IRS. Both spouses must sign if the deficiency notice is for a jointly filed return. Most importantly, do not sign this form if you disagree with the Notice of Deficiency! Make sure to understand what is being assessed. Just like in the example mentioned, there could be a solution to alter the outcome significantly. You have options to appeal! More on that later in this article.

When Is the IRS Not Required to Issue a Statutory Notice of Deficiency?

The IRS is not required to issue a Statutory Notice of Deficiencies under the following circumstances:

• When you file your tax return, the amount listed on the tax return is assessed by you; therefore, the IRS does not have to issue a Notice of Deficiency.
• When the IRS issues specific reportable transactional penalties such as Failure to File Penalty, Failure to Pay Penalty, and Trust Fund Recovery Penalty, among others.
• An IRS correction of a math error is where the IRS determines a tax deficiency resulting from a clear mathematical or clerical error reported on your tax return and then makes the correction without sending a deficiency notice. The IRS still has to notify you of the mathematical or clerical changes. If a taxpayer contests a math error notice within 60 days, IRC § 6213(b)(2)(A) provides that the IRS must abate the assessment. If the IRS abates the assessment, it must follow deficiency procedures before reassessing the tax. Taxpayers who do not contest a math error notice within 60 days lose the right to do so in court before paying. The IRS can use a Notice of Deficiency route for clerical and mathematical errors if it chooses to.

How Long Can the IRS Take to Issue a Statutory Notice of Deficiency?

The IRS can typically only issue a Statutory Notice of Deficiency during a tax assessment period for a particular tax. The tax assessment period the IRS uses is based of the Assessment Statute Expiration Date (ASED). The ASED occurs at the end of the period when the IRS can assess tax concerning a particular tax year. The ASED is calculated on the basis that an assessment of tax must be made within three years from the received date of an original tax return or three years from the due date of the original return, whichever is later. However, there is no assessment period if no tax return was filed or a fraudulent tax return was filed.

The three-year assessment period can be extended by:

• You request a Collection Due Process Hearing.
• You file a Bankruptcy Petition.
• You have applied for an Offer in Compromise.
• If you sign a waiver and consent to extend the assessment period (by signing Form 870, Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overpayment) (this is called a “Notice of Deficiency Waiver “).

If you have significantly understated the tax on a return, the assessment period can be extended from three to six years.

How Should I Respond to an IRS Notice of Deficiency?

You have several options for responding to an IRS Notice of Deficiency. These options include:

1. Pay the tax in the notice and close the matter.
2. Pay the tax in the notice and submit a refund claim.
3. File an offer in compromise.
4. Submit a petition with the U.S. Tax Court.
5. Petition the IRS to withdraw or rescind the notice of deficiency.

The IRS Statutory Notice of Deficiency, also known as the 90-Day Letter, gives you 90 days from the date listed on the notice to file a petition with the U.S. Tax Court.

It’s important to note that the 90 days begins as of the date listed on the notice, which represents when it was mailed and not the day you received it in your mailbox. If you petition for tax court, you must do so within 90 days of the notice date.

The 90 days are extended to 150 days if your address is outside the United States.

What Happens If I Did Not Receive My IRS Notice of Deficiency?

The IRS must send a statutory notice of deficiency to a taxpayer’s last known address by certified or registered mail. The last known address is generally the address that appears on your most recently filed and properly processed tax return unless the IRS is given clear and concise notification of a different

The courts will invalidate the notice if the IRS does not properly Notice of Deficiency.

For my IRS Deficiency Notice, Who Can File a Petition to Go to Tax Court?

You can file the tax court petition if you are listed on the Deficiency Notice.

What Happens When I File a Tax Court Petition?

Once the U.S. Tax Court receives your court petition, they will notify the IRS of your response to the IRS Notice of Deficiency. The IRS will place a hold on the assessment case and is prevented from issuing additional assessments for the same tax and period.

The IRS counsel will then file an Answer to your petition with the U.S. Tax Court. Often your case will get forwarded to the IRS Office of Appeals. If the case can be solved without going to tax court, the IRS will review the case and schedule a conference with you. The conferences are informal and are conducted by correspondence, telephone, video, or in-person conference.

On average, the IRS settles 70% of cases that go to appeals. Filing for U.S. Tax Court can have significant advantages. Knowing your taxpayer rights and the relative’s time frames to enact these rights is imperative. Do not let your rights expire do to non-action!

There may be some other settlement options available.

For additional information, please refer to the following blogs:

• “The Ins & Outs of Audit Reconsideration“
• “When You Can Pursue a Collection Due Process Hearing“
• “Appealing IRS Tax Determinations“
• “What Should I Do If I Receive an IRS Notice“

Get Trusted Representation For Your IRS Notice of Deficiency

To ensure that you align yourself with the best possible outcome, whether dealing with a challenging IRS Statutory Notice of Deficiency situation or seeking other forms tax debt relief, have an experienced tax attorney-CPA-EA provide the expert guidance to get you there. Call today (772-418-0949), or complete an online inquiry form for a free consultation with experienced IRS Notice of Deficiency Tax Attorney-CPA-EA, Will Harmon of Harmon Tax Resolution, LLC. He will handle your IRS Notice of Deficiency and any other IRS issue so that you can put this behind you and get on to doing the things that matter most.

Going through an IRS audit can be exhausting, especially if you receive an unfavorable outcome resulting in a tax balance due to the IRS. Before capitulating and forking over the money to the IRS, you may have the option to challenge some or all of the audit findings using an IRS Audit Reconsideration. An Audit Reconsideration is a process the IRS uses to reevaluate the results of a prior audit when specific criteria have been met.

When Can I Use An IRS Audit Reconsideration?

The IRS offers an Audit Reconsideration process if you disagree with the audit results of your tax return. The Audit Reconsideration allows you to provide your explanation as to why you feel it should be overturned. Here are some of the reasons you could request an audit reconsideration:

• You disagree with the audit assessment findings and can provide a reasonable basis for the dispute. You must clearly state which part of the audit you are disputing and why. For example, the audit incorrectly classified income or expense characterizations.
• You have additional pertinent information not presented during the audit. You have new information to show the IRS about the audit of your income or expenses. For example, an audit denied an expense due to lacking supporting documents; you acquired them after the audit.
• You didn’t appear for your audit due to a legitimate reason.
• You relocated and never got the IRS’s audit report.

When Am I Not Able To Use An IRS Audit Reconsideration Process?

• You’ve already paid the full amount you owe. In that case, you must file a formal claim for a refund with an IRS Form 1040X, Amended U.S. Individual Income Tax Return.
• You previously agreed to pay the amount you owe by signing an agreement such as an IRS Form 906, Closing Agreement; an offer in compromise agreement; or an agreement on IRS Form 870-AD, Offer to Waive Restrictions on Assessment and Collection of Tax Deficiency and to Accept Overassessment, with the Office of Appeals.
• The United States Tax Court or another court has entered a final determination that you owe the taxes.

How Do I Apply For An IRS Audit Reconsideration?

An Audit Reconsideration is done by making a written request to the appropriate IRS office listed on your audit report. If you are unsure where to send it, please refer to IRS publication 3598, which lists the addresses and phone numbers of all IRS offices dealing with audit reconsiderations. The publication also provides information about materials you must submit with your request.

Steps For Submitting An IRS Audit Reconsideration Request

Step 1: Acquire Appropriate Documentation

Analyze your audit report to determine the disagreeable items you are contending. You will then need to obtain new information not already previously provided to IRS, which supports your position. Ensure this information is relevant to the tax year listed in the audit report. Please present a clear audit trail of source documents to each audit report listing you are disputing.

Step 2: Submit Your Documentation

You will need to submit to the IRS the following items:

• A copy of your audit report (IRS Form 4549).
• Copies of information that support your position (typically, these are payment receipts, canceled checks, bank and credit card statements, invoices, contracts, loan documents, and 1099 Forms).
• Copies of materials you previously gave to the IRS – usually listed within Information Document Request 4797 sent to you.
• A letter clearly stating your reason for reconsideration; the IRS suggests using IRS Form 12661, Disputed Issue Verification.
• Include daytime and evening phone numbers and the best time for IRS to call you.

Remember to make photocopies of all documents you are sending. Please do not send the originals since the IRS will not accept them and may reject your request for audit reconsideration if you attach them.

How to Write an Audit Reconsideration Letter

You can write a letter to request an IRS Audit Reconsideration rather than completing IRS Form 12661. Sometimes this is chosen if it makes it easier to state one’s position in this fashion over using the IRS form 12661. The letter must provide the reason for requesting the audit reconsideration and an overview of the additional information explaining how the audit findings are inaccurate.

Because IRS Audit reconsiderations are relatively complex, having a tax attorney with an audit background would be ideal for assisting you with the best way to handle your appeal. Tax Attorney, Will Harmon of Harmon Tax Resolution, is also a CPA with significant audit experience and can adequately address this for you.

What Is The Time Frame For An IRS Audit Reconsideration Completion?

Typically, the IRS will contact you within thirty days of receiving the Audit Reconsideration request; however, it’s unsurprising if it took up a couple of months before they do. During this period, penalties and interest and penalties continue to accrue on unpaid tax balances. The IRS may delay collection activity during their investigation based on your request, but this is not guaranteed. If you are under an installment plan, you will want to continue making payments. If you are experiencing financial difficulties with paying your IRS debts, there may be some tax relief programs you possibly qualify for. Seeking a tax attorney-CPA to assist would be helpful for your situation.

If the IRS needs additional information to assist with their determination, they will contact you via mail. Bear in mind that if you were able to have collections halted during the reconsideration process and the IRS finds that if you don’t respond to additional information requests within thirty days or have submitted insufficient information, the IRS may resume its collection activities.

To help move your case forward, you can also contact the Taxpayer Advocate’s Office and ask them to expedite your audit reconsideration case. This can be done by completing Form 911, Request for Taxpayer Advocate Assistance.

What Happens Upon The Completion Of An Audit Reconsideration?

Shortly after the IRS completes its review of your audit reconsideration, you will be contacted with their decision which could result in a complete or partial reduction of the contested items’ original tax. If the IRS makes no adjustments, the original balance will remain due.

Do I Have Any Options To Challenge The Audit Reconsideration Ruling?

If you disagree with the results of the reconsideration, there are several options:

• Request an Appeals Conference,
• Pay the amount due in full and file a formal claim, or
• Do nothing. IRS will send you a bill for the amount due.

Some tax relief options may be available if you have problems paying the IRS tax debt.

Get Trusted Legal Representation for Dealing with IRS Audit Reconsideration

To ensure that you align yourself with the best possible outcome, whether dealing with a challenging IRS audit/assessment or seeking tax debt relief, have an experienced tax attorney-CPA-EA provide the expert guidance to get you there. Call today (772-418-0949), or complete an online inquiry form for a free consultation with experienced IRS Audit Reconsideration Tax Attorney-CPA-EA, Will Harmon of Harmon Tax Resolution, LLC. He will handle your audit reconsideration and any other IRS issue so that you can put this behind you and get on to doing the things that matter most.

For additional information, please see the following blog articles:

• “Help with Your IRS Tax Audit“

• “When You Can Pursue a Collection Due Process Hearing“

• “When Should I Call A Tax Resolution Firm?“

If you received an IRS CP2000 Notice, the IRS reports indicate that you did not report all your income on your IRS individual 1040 Tax return for a particular year. Whenever a third-party issues tax records to you, they must submit a copy of what was sent to the IRS. The IRS will cross-reference your tax information to third-party information reports.

This often happens when:

• You have performed independent contract work, were issued a 1099-NEC or 1099-MISC, and did not report this. The issuers of the 1099s must also send a copy of that 1099 to the IRS.
• You pulled out retirement funds from a 401K but did not report the 1099R information on your return.
• You did not report the sale of your home. The broker sent the IRS a 1099S which provides this information. What compounds it is that the 1099-S often only reports the sales price without considering the basis, which often leads to an incorrect higher capital gain tax. In addition, you may qualify for the IRS Section 121 Exclusion of the Gain, which could significantly lower or eliminate any of the capital gains.
• You receive payments through payment cards, payment apps, or online marketplaces. You may get a Form 1099-K if you. You could also get a 1099-K if you received payments as a gig worker, freelancer, or other independent contractor (self-employed). This may also include payments you received from selling items as a hobby.
• You had crypto currency coins sales such as Bitcoin, and these were not reported.

What Information Does a CP2000 Notice Provide?

The CP2000 notice provides the following:

• The amounts you reported on your original or processed amended return.
• The amounts reported to the IRS by the payer.
• The payer’s name, ID number, the type of document issued (W-2, 1098, 1099), and the taxpayer identification number of the person to whom the document was issued.
• The proposed changes to your income, tax, credits, or payments.
• A Response form, payment voucher, and an envelope.

Should I be worried about a CP2000?

Yes, because ignoring it could lead to unfavorable events to follow. The CP2000 is not an actual tax bill. It primarily lists corrections on your tax return. However, if left unchallenged, the amounts reflected will become assessed, and then, if a balance results, it will become collectible by the IRS. A Notice of Deficiency will then be issued, which is often the starting point for collection activities to commence.

What Should I Do If I Receive a CP2000 Notice?

• Read your notice carefully. It explains the information the IRS received and how it affects your tax return.
• Provide a timely response. If you need additional time to respond, you can request an extension by mailing or faxing in the request or by calling the toll-free number shown on the notice.
• Complete the notice response form and state whether you agree or disagree with the notice. The response form explains what actions to take. (Your specific notice may not have a response form. In that case, the notice will have instructions on what to do). You can submit your response by:

• Mail using the return address on the enclosed envelope, or
• Fax your documents to the fax number in the notice using either a fax machine or an online fax service.

• If you agree with the proposed changes, follow the instructions to sign the response form. The IRS requires both spouses’ signatures if you filed married filing jointly.
• If you disagree, complete and return the response form. Provide a signed statement explaining why you disagree and supply any documentation, such as a corrected W-2, 1099, or missing forms, to support your statement.
• If the information reported to IRS is incorrect, contact the business or person who reported the information. Ask them for a corrected document or a statement supporting why it is in error, then send the IRS a copy with your response.

Again, it’s important to respond by the IRS deadline fully. You have the right to contest penalties and appeal a CP2000 determination. You generally are given a 30-day deadline to appeal the tax increase. If you don’t respond, the IRS will send you a Statutory Notice of Deficiency, which in 90 days from the date of this letter, will be followed by a bill for the proposed amount due.

Regardless of what triggered the IRS to process a CP2000 letter, to avoid taxes, penalties, and interest, it is essential for either you or a tax professional to address it.

Get Trusted Representation for Dealing with IRS CP2000 Notices

Obtaining professional advice from a dedicated tax resolution professional may be ideal if you are unsure how to address an IRS CP2000 Notice. It would be best if you had professional answers you could count on. Tax Attorney-CPA-EA, Will Harmon of Harmon Tax Resolution, LLC, has years of experience assisting taxpayers with resolving issues regarding unreported income. If you need help, please call  (772-418-0949), or complete an online inquiry form for a free consultation with experienced Tax Attorney-CPA-EA, Will Harmon of Harmon Tax Resolution, LLC. He will provide trusted representation so that you can put this behind you and get on to doing the things that matter most.

For additional information, please see the following blog articles:

• “What Should I Do If I Receive an IRS Notice.”
• ”Received an IRS Notice CP2000”
• “When Should I Call A Tax Resolution Firm?”

Make the Call Today so that You Steer Your Path Tomorrow!

One of the harshest activities the IRS can do is to enforce a levy against you.

If you do not pay your taxes (or make arrangements to settle your debt), and the IRS determines that a levy is the next appropriate action, the IRS may levy any property or right to property you own or have an interest in. For instance, the IRS could levy property that is yours but is held by someone else (such as your wages, retirement accounts, dividends, bank accounts, licenses, rental income, accounts receivables, the cash loan value of your life insurance, or commissions). Or, the IRS could seize and sell the property you hold (such as your car, boat, or house).

How Does The IRS Notify You of a Levy? Can I Appeal?

When the IRS is going to levy your bank account or garnish your wages, they will send a Notice of Intent to Levy (IRS Letter 1058 or LT11) in the mail. IRS is required to do so under Internal Revenue Code Section 6331(d). The Notice will list your right to appeal the levy within 30 days of the date of this Notice.

What Are Some of the Reasons To Appeal an IRS Tax Levy?

Here are some reasons to consider appealing a tax levy:

• You want to dispute the tax liability for a legitimate reason, provided you have not forgone the opportunity to do so.
• You are no longer liable for the tax because the Collection Statute Expiration Date time frame has expired.
• You will suffer financial hardship if the levy is enforced.
• You want to pursue a form of innocent spouse relief.
• You will submit an Offer in Compromise seeking to negotiate for a lesser tax amount than you owe.
• You have automatic stay protection from bankruptcy.

Usually, when you timely file for a CDP Hearing, the IRS is statutorily required to abstain from levying your property during the hearing process. Utilizing this time may allow for arriving at an optimal tax resolution.

What are the Options to Use for Appealing an IRS Levy?

There are three ways to appeal an IRS Levy. These are the Collection Due Process Hearing, Equivalency Hearing, and Collection Appeals Program. Each should be used based on specific circumstances.

Collection Due Process (CDP) Hearing

The process for requesting an appeal is by submitting in writing for a Collection Due Process (“CDP”) hearing within the 30-day deadline listed on the Intent To Levy Notice. If you miss the deadline, you can still request an appeal through other procedures; however, you will not have all the options and advantages available under a CDP hearing, such as going to a tax court to dispute the decision. Once you request a CDP hearing, the IRS will stop collection action on your account. The clock will also stop ticking on the collection statute of limitations. The IRS generally doesn’t levy assets during the CDP hearing process unless the tax collection is in jeopardy.

You may dispute the tax liability at a CDP hearing unless you were already given this opportunity from receiving a Notice of Deficiency, which would have provided such an opportunity.

Which Notices Provide for Collection Due Process (CDP) Hearing?

Collection Due Process (CDP) is available if you receive one of the following notices:

• Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320
• Final Notice – Notice of Intent to Levy and Notice of Your Right to a Hearing
• Notice of Jeopardy Levy and Right of Appeal
• Notice of Levy on Your State Tax Refund – Notice of Your Right to a Hearing
• Post Levy Collection Due Process (CDP) Notice

How to Request a CDP Hearing to Appeal a Levy

It may be prudent to call the number on your levy notice to negotiate a possible resolution to your tax situation before requesting a CDP hearing. Making such a request to the IRS does not toll the 30-day requirement to submit a written request to a CDP hearing.

To request a CDP hearing, complete and submit IRS Form 12153 – Request for a Collection Due Process or Equivalent Hearing or submit a written request containing the items reflected on Form 12153.

The CDP Hearing request must be postmarked within 30 days after the IRS Notice of Intent to Levy date. If you cannot make the 30-day CDP deadline, you can still request an Equivalency Hearing by using the same form and checking off box seven on the form. Be sure to mail the request to the address listed on the Notice of Intent to Levy. To fax this, you must call the number listed on the Notice to get the correct fax number to send it to.

Equivalency Hearing (EH)

As mentioned, an Equivalency Hearing (E) might be an appeal option if you missed timely submitting for a CPD hearing. You have one year from the CDP notice date to file. At this hearing, you will have the opportunity to appeal the levy; however, you will not have the chance to go to tax court if you disagree with the Appeal’s decision. In addition, the IRS can still pursue collection activities during this process, whereas this usually is not the case when getting a CDP Hearing. So it’s essential to be aware of the dates of the notices.

Collection Appeals Program (CAP)

The Collection Appeals Program (CAP) is another option to appeal an IRS tax levy. The CAP process has some additional variations over a CDP Hearing but does not contain some of the advantages of using a CDP Hearing. You can elect for a CAP hearing before the IRS provides a Notice of Intent to Levy. When a notice is issued, you can appeal by the deadline on your Notice, which is typically 30 days.

Under the CAP procedure, you cannot dispute the amount of your tax liability.

When Should You Use a Collection Appeals Program (CAP)?

You should use CAP if you are unable to use a CDP. Although you can request the CAP procedure before the Notice of Intent to Levy is sent, bear in mind that any issues decided using the CAP may not be appealed at a later CDP hearing. Before doing so, you must understand all the impacts of electing a CAP over a CDP.

A CAP also provides the opportunity to use after the IRS has levied the property; usually, you must do so within two years from the levy date. Although the CAP procedure can provide quicker determination than a CPD hearing, the CAP appeal determination can not be challenged in Tax Court. In addition, the CAP is used by third parties where the IRS has wrongfully levied their property.

If you are unsure which appeals method fits your situation, talk to a tax professional who can help you.

Which Actions Are Collection Appeals Program (CAP) Available for?

Collection Appeals Program (CAP) is available for the following actions:

• Before or after the IRS files a Notice of Federal Tax Lien
• Before or after the IRS levies or seizes your property
• Termination, or proposed termination, of an installment agreement
• Rejection of an installment agreement
• Modification, or proposed modification, of an installment agreement

The Process for Requesting an Appeal Using the Collection Appeals Program (CAP)

The CAP levy appeal process can be done in two ways, depending on your collection contact with the IRS. The contact could be where you are dealing with an IRS Revenue Officer (RO) or have just received an IRS Notification or phone call (no RO).

If the IRS Notification or phone call is your only source of contact with the IRS, you should call the number listed on the IRS Notification or provided to you from your IRS call. It may be possible to avoid an IRS levy by trying to negotiate a solution to your tax issue.

If you cannot agree, you can then ask to appeal the decision by speaking directly to their manager. Within twenty-four hours of making this request, a manager should contact you. If you cannot then agree with the manager, your case will be forwarded to an IRS Appeals Office. You will not have to submit a written appeals request.

When dealing with an IRS Revenue Officer, the attempt to appeal is initially made by requesting a conference with their Collection Manager/Supervisor. If this conference does not resolve the issue, inform them that you will be submitting IRS Form 9423 – Collection Appeal Request. The completed form gets set to the IRS Collection Office you are dealing with.

What Happens After Requesting an Appeal of a Levy

A timely request generally prevents the IRS from commencing levy activity while an appeals process occurs. Even once you have filed for an appeal, you still may have the option of discussing your case for a resolution with an IRS Revenue Officer. You can withdraw your case anytime, especially if you find a solution. Once you submit the Appeal, someone from IRS Appeals will reach out to set up the time and date for your appeals conference.

The Appeals Office will issue a determination letter upon the conclusion of your conference. Provide you requested a timely CDP request, you will have the opportunity to appeal the decision in Tax Court. For Eqivalent Hearing or CAP request, you will not be allowed to contest in Tax Court.

Who Can Represent You During an Appeal of a Tax Levy

You have the option of representing yourself during the appeals process. If you want assistance, the following individuals can represent you:

• Licensed Tax Attorneys
• Certified Public Accountants
• Enrolled Agents
• Members of your immediate family
• For a business, a corporate officer, general partner, or regular full-time employee

Get Trusted Representation for Dealing with IRS Levy Appeals

Obtaining professional advice from a dedicated tax resolution professional may be ideal if you’re considering appealing a tax levy. It would be best if you had professional answers you could count on. Call today (772-418-0949), or complete an online inquiry form for a free consultation with experienced Tax Attorney-CPA-EA, Will Harmon of Harmon Tax Resolution, LLC. He will provide trusted representation so that you can put this behind you and get on to doing the things that matter most.

For additional information, please see the following blog articles:

• “Appealing IRS Tax Determinations: When and How to Appeal IRS Collection Actions and Tax Assessments”

• ”Important Information About IRS Tax Levies”

This is a forum where the taxpayer may protest one of the following IRS notices:

• Final Notice of Intent to Levy and Notice of Your Right to a Hearing.
• Notice of Federal Tax Lien and Your Right to a Hearing.
• Notice of Jeopardy Levy and Right of Appeal.
• Notice of Levy on Your State Tax Refund – Notice of Your Right to a Hearing.
• Post Levy Collection Due Process Notice.

A taxpayer has 30 days from the date of notice to request a Collection Due Process Hearing. In addition, there still is an opportunity to attempt to work out a solution with the Collection Office that sent the notice. If the case cannot be resolved, the case will be forwarded to Appeals for the taxpayer.

It’s essential for the taxpayer not to ignore and wait for final notice because they will miss out on getting a Collection Due Process Hearing (CDP). The IRS has already begun the collection process in earnest. Having a CDP hearing enables many potential issues to be addressed, which could result in favorable for the taxpayer. Harmon Tax Resolution, LLC can help. Multi-disciplined Tax Attorney-Certified Public Accountant-Enrolled Agent Will Harmon will ensure your matter receives proper coverage from all angles to obtain the best solution for your situation.

Let us help you find a solution to your tax problem. Call Harmon Tax Resolution, LLC today at 772-418-0949 or complete our online form to request a free consultation with a knowledgeable multi-licensed tax attorney-CPA-Enrolled Agent.

Take the First Step to Get the Relief You Deserve!​

A few months ago, a client called me with his IRS nightmare. After diligently researching the problem, it was discovered that a step-up inheritance basis was not correctly applied, resulting in significant tax, penalty, and interest add-ons. My client was terrified. I reassured him that we would find a working resolution. It took some work with the brokerage firm, applying the correct IRS tax code, and advocating with the IRS. The final results are that taxes, penalties, and interest were removed, my client sleeps better at night, and to boot, he got a refund and some future long-term capital loss carryforwards.

It was worth it for my client to call about his situation. Since the initial call is a free consultation to discuss if there is a way I could help your situation. The information provided during the free consultation will determine whether I could be of help. Therefore, I highly recommend that anyone dealing with a stressful tax issue call me. Getting proper relief to sleep well at night is worth making the call.

I want to go over some of the basics regarding the dreaded IRS Notice CP 2000 by providing a base description of what it is, the importance of timely response, an example of when this situation could occur, and finally, based on the example used, how to prepare for it.

Ordinarily, when an IRS Notice CP 2000 notice shows up in one’s mailbox, one tends to fear the worst, even when one has made every effort to adhere to IRS taxpayer reporting requirements. The notice informs the taxpayer that their tax return information doesn’t match data reported to the Internal Revenue Service by employers, banks, and third parties. The notice will list a proposed tax due. Receiving this notice can be quite bewildering, especially when the notice’s proposed tax, penalty, and interest are overwhelming. Often the response to this shocking news is to want to ignore it.

Ignoring the IRS is not a good strategy! It’s almost like ignoring a toothache; it only gets worse.

The IRS’s process to enforce its policies becomes more progressive and could ultimately lead to securing liens and then facilitating levies on your personal property. Please realize that this letter isn’t a formal audit notification but a letter to see if you agree or disagree with the proposed tax changes. You do have rights! Please respond within 30 days from the date printed on the letter to begin the corrective activities and avoid further escalation. The letter contains instructions on how to respond. You can also request additional time if needed to gather correcting information. The key is to answer the notice within the allowable time frame.

Suppose you could not respond to the initial CP2000 or your timely response contained information not accepted by the IRS. In that case, the IRS will issue the following Notice CP3219A Statutory Notice of Deficiency. This letter details why the IRS proposes a tax change and how the agency determines the difference. The notice tells you about your right to challenge the decision in Tax Court if you choose to do so. Even if you decide not to go to Tax Court, the IRS will continue to work with you during the statutory notice timeframe to help resolve the issue. This notice provides a 90-day response period. Otherwise, the IRS will assess the proposed changes and send you a bill. For more information about this letter, please click this link.

IRS explains CP 2000 letters sent to taxpayers when tax return information doesn’t match information from 3rd parties | Internal Revenue Service

There are many potential causes for 3^rd party information to differ from your tax return and what the IRS has. One circumstance that comes to mind results from inheritances, mainly when securities are involved. Many beneficiaries sell inherited securities; however, sometimes, there is no listing at the financial institution of the stepped-up basis of the inherited security being reported to the IRS, resulting in a significant gain not reported by the taxpayer. The taxpayer does not owe tax on the stepped-up-basis portion of the gain but only would owe tax on gains occurring after death or after a selected alternative valuation date. It’s essential to obtain information on the property’s value inherited on the date of death. This verifiable information will ensure you properly reflect this on your tax return – Form 8949 Sales and Other Dispositions of Capital Assets. Having the records will also allow for optimal response to the IRS CP2000 notice and put things back into a much better perspective!

I hope this helps alleviate some fears of receiving the dreaded IRS CP2000. For more information about IRS CP2000 Notice, please click here.

If you have observations or questions, please feel free to reach out to me.