Today TaxMama hears from Stanley in New Jersey, with a universal problem. “Those people who had North Fork Bank accounts in 2007 received a 1099-INT showing North Fork as the payer. Capital One acquired North Fork Bank as of 3/10/2008. It appears Capital One modified their records to show they were the payer of interest earned for 2007. This is causing massive CP 2000 Notices. How can we get this corrected?”
That’s a really annoying problem. No doubt, this will have happened to customers of other banks taken over by Capital One, Wells Fargo, Bank of America, or Chase.
And I just wonder how many people will get those and not know what to do – and will freeze up and do nothing?
This is a tough problem. Once the notices have already gone out, the only thing to do is to respond. Anyone working with a tax professional, like you, will be able to respond correctly and avert the ‘proposed assessment.’
Many folks handling this on their own will mess it up. Some won’t respond and the assessment will be posted – and turned over to collections.
Perhaps putting this out there will help people find this in a search. If you get a CP-2000 letter – a letter telling you that IRS has found specific unreported income and is offering you a chance to correct the error – respond to it. If you don’t know how to do it in writing, and are not working with a tax professional – CALL IRS. Call the phone number on the notice. They will help you.
Thank you for bringing this to my attention. I have alerted IRS about the problem. Let’s see what kind of a solution they can develop?
On the other hand, I have to wonder. Typically, CP-2000’s are sent out, not because names don’t match; but because the total income reported in a given category doesn’t match. For instance, if total interest on the tax return was $2,500, but total 1099-INTs were $3,000, a CP-2000 would have been issued. But I don’t remember seeing CP-2000s when total interest was $2,500 and the 1099-INTs added up to $2,500. That seems odd to me.
And remember, you can find answers to all kinds of questions about proposed assessments and other tax issues, free. Where? Where else? At TaxMama.com.[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the subscribe link and join us.]
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