Gary Bode, CPA: Consider calling us for a free phone consult if you become uncomfortable dealing with IRS Letter 566 or Notice CP 2000. (910) 399-2705.
“IRS Letter 566 (CG) and IRS Notice CP 2000 usually aren’t a big deal, but they both deserve immediate attention.”
- Gary Bode, IRS tax notice CPA
I understand that any letter or notice from the IRS automatically makes folks nervous. Letter 566 and Notice CP 2000 both start an IRS Correspondence Audit. But it’s the lowest level of IRS audit. Often correspondence audits just ask for more documentation, or, correct an error on your federal tax return.
IRS Tax Notice CPA advice on IRS Letter 566 and IRS Notice CP 2000.
Each Letter 566 and Notice CP 2000 is unique. There aren’t any black or white answers. But here are some general guidelines based on my CPA experience.
- Try not to allow the letter or notice agitate you. I know they always look scary. And sometimes they are scary. Take a few deep breaths.
- Read the letter or notice carefully. Then read it again. Have a friend or relative read it too.
- Understand what the IRS wants. On IRS Letter 566 (CG) they generally want more information or documentation. IRS Notice CP 2000 proposes changes to an already filed return.
- Understand the IRS timeline. The IRS allows plenty of time, even if you don’t respond to Letter 566 or Notice CP 2000. But eventually they’ll run out of patience with you. As a tax notice CPA, I see folks wasting valuable defense time for no reason.
- Decide if the IRS is correct. Remember you have to prove them wrong.
- On small issues, it may just be easier to concede to the IRS, even if they’re wrong. I know that runs contrary to human nature.
- Decide whether you’re comfortable handling the IRS on your own. In most cases you can. But that doesn’t always mean you should. Please read below.
- If they’re right, give the IRS the additional documentation they’ve requested, or pay the required amount.
- If they’re wrong on Letter 566 or Notice CP 2000, figure out how to prove it.
- Be polite, coherent, concise and succinct. Leave out your emotions.
- Consider amending the return instead of just responding to Letter 566 or Notice CP 2000.
- Use certified post to send the IRS anything.
- Call the IRS in a few weeks to check if your response made it into their systems.
The Don’ts of Letter 566 and Notice CP2000
- Don’t assume the IRS is correct.
- Don’t open up other areas of your tax return to IRS scrutiny.
- Don’t rely on IRS oral advice.
- Don’t think the IRS will go away.
- Don’t ignore Letter 566 or Notice CP 2000.
- Don’t give up valuable defense time without a good reason.
- Don’t berate IRS agents verbally or in writing, even if you’re upset or it seems justified.
- Don’t make things worse.
When to Seek Professional help from a tax notice CPA
Again there aren’t any absolute rules here, just some guidelines.
- Do you understand Letter 566 or Notice CP 2000? Both documents start an IRS audit, albeit a low-level audit.
- What are the potential consequences of Letter 566 or Notice CP 2000 dollar wise?
- Are there other areas of your return you’re nervous about? How about earlier tax years?
I’m a tax notice CPA with a virtual office to offer you service wherever you live. If you become uncomfortable dealing with IRS Letter 566 (CG) or IRS Notice CP2000, consider calling (910) 399-2705 for a free phone consult. We try to be genuinely helpful. We don’t try to sell you on services you don’t need or can handle yourself.
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