The IRS compares the payment information reported to the IRS by employers, banks, businesses, and other payers on income documents (Forms W-2, 1098, 1099, etc.) to the income, credits, and deductions you report on your income tax return.
The Automated Underreporter (AUR) function uses an automated system for this comparison and sends out a Notice CP-2000 if you didn’t report income on your return that was reported to the IRS by a payer or if it appears that payments, credits, and/or deductions are overstated. The CP-2000 isn’t a bill, it’s a proposal to adjust your income, payments, credits, and/or deductions. The adjustment may result in additional tax owed or a refund of taxes paid.
The first page of the notice provides a summary of proposed changes to your tax, a phone number to call for assistance, and the steps you should take to respond.
In addition, the CP-2000:
- Shows the amounts you reported on your original or amended return
- Shows the amounts reported to the IRS by the payer
- Shows the IRS proposed changes to the tax, credits, and/or payments
- Shows the payer’s name, ID number, the type of document issued (W-2, 1098, 1099), and the tax identification number of the person to whom the document was issued
- Proposes either an increase or decrease to your tax liability based on the payer documentation, and
- Includes a response form, payment voucher, and an envelope.
Review the information on the CP-2000 carefully to verify its accuracy and so you know exactly how you should respond. On the response form, indicate whether you agree with all, some, or none of the changes the IRS is proposing. You can also authorize someone other than yourself to contact the IRS concerning the notice in the space provided on the response form.
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