IRS Summer Audit Letters

Two common IRS audit letters seem to be showing up in Michigan this summer. This type of letter is referred to as a CP2000 letter, essentially it’s a computer audit of some element of your tax return. The two reoccuring issues are:

1. Letters issued when a taxpayer received a check from a pension plan and did a rollover within the correct time period of 60 days. If the pension money was received late in the year and the rollover was completed early in the next year, it seems to be triggering the CP2000 letter.

2. Letters issued to IRA owners who sent IRA money directly to a charity. People who are at least 70 1/2 years old are allowed to send their required minimum distribution (RMD) didrectly to a charity if they choose.

In both these situation, it is extremely likely that the taxpayer is correct on the tax return and the CP2000 was issued in error. It is important to answer the audit letter within the time frame stated in the letter, and it is highly suggested that a skilled tax preparer be consulted to answer any audit letter when you believe the IRS is in error. They and their computers are NOT infallible. Mistakes do happen.


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