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Each year millions of Americans file their tax returns. In most cases we can recall where we worked. However, sometimes we may miss reporting of certain income sources. Third parties report income earned to the IRS. This includes w2 wages, 1099 retirement distributions, 1099 NEC/MISC independent contractors, 1099 interest, 1099 broker transactions etc.
If you happen to miss income and the automated systems at the IRS finds a discrepancy it will flag the return and have someone manually review it on the IRS side. A letter called a CP 2000 notice will then be issued to the taxpayer. This letter outlines what was reported on the original return versus what was reported by 3rd parties.
At this point you should review the filed tax return and pull copies of your wage and income reports from your IRS.gov account. The wage and income will show you what companies reported income to the IRS. Match all income against the changes the IRS made. If you agree with the IRS changes you need to sign the CP 2000 NOTICE to have the IRS process the return timely. If you do not answer or respond to the cp 2000 notice then the IRS assumes their changes are accurate and will go ahead and process the return.
You do not need to amend a return if you receive a CP 2000 notice. You do need to respond if you do not agree with the changes.
An accuracy-related penalty can be assigned if there is a gross difference between what is reported by you on the return and what the IRS has on file.
PRO TIP: When a new tax filing season begins. Go ahead and pull last year's wage and income report from your IRS.gov account. It’s FREE! This will help you to avoid missing any income and can help jog your memory. “Oh yeah I didn’t receive my 1098 T, or Oh yeah I took out a retirement distribution but where is my form?”
If you need help filing we are here to help! We have very affordable rates for everyone! WE customize our pricing to fit your needs! Call/Text us today for a free consultation.
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