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How to respond to CP2000 if I don't agree with the changes

I got a CP2000 from IRS because I missed the RSU 1099B for 2020.

 

The employer already withheld an income tax on all the vests for 2020 and I sold part of them in April 2020. But it looks like the CP2000 IRS thought I sold all vests with 0 basics/costs.

 

I can't entirely agree with the number I owe in the notice. How should I respond to the notice?

 

Should I fax them my missing 1099B and W2? It also asked me to explain why I can't agree, is there any example I can follow to compose my explanation?

 

Thank you

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1 Reply

How to respond to CP2000 if I don't agree with the changes

If you failed to enter the sale on the Sch D using the basis from the W-2 then the IRS sent you a CP2000 for those missing sales that were reported with a zero basis.  Since the taxes were already paid thru the payroll system the Sch D should show a loss of the broker's fee and not a cap gain.    To respond to this letter send an amended return with the Sch D & 8949 showing the missing information.   Read the notice carefully to see exactly what/where you need to do to refute their findings. 

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