CP 2000 Question

[FDNY]

I'm not exactly sure on handling this first-time issue which would have been a simple task if I was informed before client acted on his own.

Client received a CP 2000 that he failed to open immediately saying he owed $4,300.  When he did open it, he saw a due date of 1/26 so he mails off a check without contacting me.  He later emails me the top sheet so I responded asking for the rest of the notice and explained it may just be for a missing 1099B as he trades from time to time.  He said yes, there was a stock he forgot he sold in 22 that he previously thought was worth pennies.    Well, turns out the gain is $180, tax $27.  Now what do I do?  I thought of calling the hotline or filing a 1040X and include all this info in the explanation area.  He said why not put a stop on the check, something that did occur to me, but I thought that may just create another problem.

What do you think?  I hope this isn't a precursor to the season.

Thank you all,

Bill

[DANRVAN]

2 hours ago, FDNY said:

He said why not put a stop on the check

Stop the check, otherwise it might be awhile before gets his $4,300 back.

[DANRVAN]

3 hours ago, FDNY said:

, but I thought that may just create another problem.

For a balance due of $27 I would not sweat it.

[Lee B]

The IRS Insufficient Funds Penalty is 2 %

[Lee B]

Key Question:   Did your client check the box, sign and mail the the portion of the CP2000 agreeing to the $4,300?

[FDNY]

Yes he did check the box, I asked that question wondering if he read the whole notice.   I’ll go ahead and tell him to stop the check and let him know about the penalty and take it from there.

Thanks to both of you for your help.

[Lee B]

In that case it sounds like you will have to amend the return.

As a result your client's return and amendment will probably end up in "Suspense" behind over 8 million other returns.

[FDNY]

Ha!  Yes, but not my problem.

[DANRVAN]

Be sure to get a POA and ask for a hold on his account when the notices start coming in.