The IRS is Mailing Millions of Underpayment Reporting Letters
The IRS is finally catching up post-COVID and expanding enforcement. Now, they are sending automated notices to individuals that did not report all of their income on their tax returns.
The most common notice is the CP2000, which is sent if they see that you had a 1099 from sales of a home, stock, cryptocurrency, a type of dividend, or self-employment income that was unreported on your tax return.
The IRS will assume you bought assets for zero. They automatically propose an assessment for the higher amount if it is a business income with zero expenses. They will also include penalties and interest.
If you excluded the income sources above, amend your tax return and submit it with the notice to the proper reporting agency. This will give you the deductions that you should have. The IRS notice isn't always correct, so you must report your income correctly to get penalties potentially reduced.
JLD Tax Resolution Group can help you easily solve a complex tax problem. Schedule your free consultation at 201-479-2572 or visit www.201tax.com.
