IRS Notice is Partially Correct

Today TaxMama® hears from Melody in the TaxQuips Forum with an IRS notice. “If we agree partially to the CP 2000 proposed changes, how should we include any payment? The IRS proposed amount is terribly wrong. We want to pay an adequate amount to cover the adjustment. Is there a calculator for this type of payment amount?” 

Ask TaxMama 

 Dear Melody,

Yes, there is a calculator; it’s called tax return preparation software.

If there are some elements of the IRS CP 2000 that are correct, you add that information into your tax return. You print out the results. You write a cover letter to IRS telling them which parts of their notice are wrong – and why. You tell them which elements you believe are correct. You tell IRS to look at the attached computation of your revised tax liability – and you pay it.

Pretty simple!

This is the only way to compute the revised balance due. A tax return has so many inter-related elements (like phase-outs, alternative minimum tax, capital gains rates, etc.), that the only way to get an accurate revision of a balance due is to revise the tax return, itself.

And remember, you can find answers to all kinds of questions about IRS notices and other tax issues, free. Where? Where else? At www.TaxMama.com.

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