It is part of the IRS underreporting department and aims to detect underreported income in a more efficient way. The unit first receives data from various third-party sources, like employers, which is then matched with the income reported on taxpayers’ tax returns. The AUR unit then automatically generates an underreporter notice, or CP2000 Notice, if a discrepancy is found. This notice informs taxpayers of the mismatched information and outlines any additional taxes, penalties, or interest that may be owed. The AUR unit also works with tax examiners to analyze data and identify patterns of noncompliance or areas where additional guidance may be needed. The AUR unit, in some cases, may be incorrect or may have mismatched data due to third-party errors, and taxpayers do have the right to dispute the findings.

Penalties for Underreported Income

One example of why a taxpayer receives a CP2000 after an AUR review is underreporting income. Employers must send copies of all employee W-2s, 1099s, or 1098s to the IRS so they know how much income an employee earned for a given tax year. Stay informed – Tax law tweaks occur often so continuing education pays off. These confusing CP2000 notices happen, but don’t spiral about the tax robot flagging something. Careful attention paired with a well-informed response lets you work towards resolution. We’ll explore demystifying CP2000 notices, Certified Public Accountant from verifying details to providing missing documentation to seeking professional guidance for complex situations.

• Review all notices carefully – most list directions or a unique QR code for accessing the appropriate IRS response portal and submission forms.
• A CP2000 notice states the amount the IRS believes the recipient owes, which includes accrued interest.
• ​​​​Underreported income continues to be a focus for the IRS, with some studies suggesting that the average American underreports their income by 4-5%.
• See the process as just another piece of your expanding financial literacy.
• This information is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice.
• You always need to be honest, thorough, and timely when you respond.

Tax Resolution

You usually just need to sign and send the form back by the deadline provided on the form. It is critical not to ignore an underreporter notice if you receive one. The notice typically includes a deadline to respond, and it’s essential to reply quickly to avoid further penalties. Review everything on the notice carefully to ensure you understand what the issue is and how to resolve it. IRS data shows that only about 85% of taxes are paid on time and voluntarily. The automated checks that take place are typically not subject to manual verification, which means there’s a reliance on the data being correct.

Work With a Tax Professional

Seek help from the tax attorneys at Silver Tax Group if you receive a notice from the AUR unit or suspect you may have an issue on your tax return. We provide valuable guidance and expertise to help you minimize your tax liabilities and maximize your financial well-being. We also help with tax debt resolution, emergency tax services, audit defense, IRS investigations, and much more. Reach out to Silver Tax Group to speak to a tax expert about the AUR and any IRS notices you receive. You may owe additional tax if the AUR unit was correct in finding the discrepancy.

IRS CP2000 Notice Guide: How to Respond & Correct Mistakes

Finally, if you think a third party submitted incorrect income information to the IRS, you can contact the third party and attempt to resolve the error with them. Choose your path based on whether that careful review uncovered inaccuracies or not. If the IRS doesn’t accept your response, you will receive a letter from the IRS explaining the reasons why your response/appeal cannot be accepted. Secondly, you can start reviewing the issues flagged by the IRS. Thoroughly review the specifications laid down by virtual accountant the IRS and cross-check the information with the documented 1099s, W-2s, and more. When you’ve put in hours of work into preparing and filing your 1099 information forms, the only thing you look forward to is a clear report from the IRS.

Just be sure to aur control number follow these steps and do your due diligence in your research and response. If a taxpayer owes money to the IRS or is eligible for a refund after AUR corrects errors, the IRS will send a Notice CP2000. You can respond to the IRS through the online portal, fax or mail. But the agency strongly recommends uploading documents securely on their website instead, for fastest digital delivery and confirmation. Review all notices carefully – most list directions or a unique QR code for accessing the appropriate IRS response portal and submission forms.