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Notice CP2000 of Proposed Adjusted Payment

Have you received a notice from the Internal Revenue Service (IRS) stating that a difference was found in reported income, deductions, credits or payments? This is called a CP2000 notice.

Be sure to read over “Understanding your CP2000” from the IRS for more information.

How will this affect your Indiana Tax Return?

The IRS shares any information sent in a CP2000 notice with the states, sending the Indiana Department of Revenue (DOR) information on Indiana’s taxpayers. DOR then compares your 1040 with your IT-40 to detect any inconsistencies from what was filed at the federal level. If there is a difference in the amount filed and the amount adjusted by the IRS, DOR will adjust the taxpayer’s return and possibly issue a bill.

How do I avoid this situation next year?

You can avoid future problems by:

  • Keeping accurate and full records.
  • Waiting until you get all of your income statements before filing your tax return.
  • Checking the records you get from your employer, mortgage company, bank, or other sources of income (W-2s, 1098s, 1099s, etc.) to make sure they're correct.
  • Including all your income on your tax return.
  • Following the instructions on how to report income, expenses and deductions.
  • Filing an amended tax return for any information you receive after you've filed your return.

Another helpful tip is to consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions you may qualify for. In many cases, you can file for free. Learn more about how to file electronically.

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