IRS launches “soft notice” Form CP 2057
September 17th, 2008Peter Hukki, Enrolled Agent
Recently, the IRS launched a new “soft notice” or Form CP 2057 as part of the effort to decrease the tax gap. The tax gap is what the IRS calls the difference between the amount of tax that taxpayers should pay and the amount that is paid voluntarily and on time. In other words, the tax gap is the approximately $300 to $350 billion in back taxes the IRS is working to collect.
Form CP 2057 is being sent out to warn taxpayers they may be underreporting their income. The form is different from the CP 2000 letter used in the past, which proposes an adjustment and may ask the taxpayer to pay additional taxes. CP 2057 tells the taxpayer to double-check certain parts of their return and to file an amended return (1040X) if necessary.
In the first issuance, 3,000 notices were sent out for tax year 2006. In October, a second test will send out 31,000 forms for tax year 2007. It is unknown exactly how the IRS selected taxpayers for this trial run of the CP 2057, but what is known is the notice allows taxpayers a chance to amend their returns if necessary.
If you should receive a CP 2057 in the mail, do not ignore it. Double-check your return for the year of the notice and file an amended return if necessary. Ignore the notice at your own risk! If you left information off of a previous year’s return you could get a follow up CP 2000 and chances are you could be faced with an audit. However, the notice could work in your favor as well. Chances are, you may have neglected to claim expenses on your Schedule C and you may be owed a refund.
Peter Hukki is an Enrolled Agent for JK Harris and Company, LLC. He has been an EA since 1974 and is also a practicing Tax Practitioner, completing tax returns for individuals, corporations, trusts, partnerships and estates.
corporations, trusts, partnerships and estates.
No Comments » | 
IRS Regulations, Tax Alerts
Posted by johnharris
