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An IRS Notice CP 2000 is a Notice of Deficiency.  The notice is issued by the IRS when the IRS is proposing an additional assessment of tax.  The notice will state the items that the IRS is disagreeing with and how such change will impact (increase) your tax liability.

For example, the IRS could state on the notice that they are increasing your income by $30,000 in capital gains not reported on your 1040 and disallowing $15,000 of charitable contributions on your schedule A.  Thus, your total income has been increased by $30,000 and your itemized deductions, which will impact (increase) your taxable income will decrease by $15,000.  In addition to these changes the IRS will state the penalty amounts that you will be assessed with such increase in tax.  For example, you can be assessed an accuracy related penalty if the income you reported is “off” by a certain percentage and you can be assessed interest.

The video below has been prepared by a Denver tax attorney at The McGuire Law Firm to provide additional information regarding a CP 2000 or Notice of Deficiency.  If you have received such notice, are being audited or wish to speak with a tax attorney please contact The McGuire Law Firm to schedule a free consultation.

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