What To Do When You Receive IRS CP05 Notice Of Review
Did you receive a “love letter” from the IRS stating that your return is under review?
What does this mean?
What do you need to do now?
The IRS CP05 letter is the letter the IRS sends out when a return or multiples of returns go under review.
What causes this review?
If it is on a current return, it could mean that someone already claimed a return with your SSN, or claimed one of the dependents that you are trying to claim. It could mean that the data system flagged that the W2 or 1099 data does not match what they have received from their 3rd parties. It also seems to be being applied in instances where some of the higher profile tax credits have been claimed, such as the Earned Income Tax Credit, the Child Tax Credit, or some of the educational credits. It truly could mean just about anything that they wish to look at, or that the system flags.
What do you need to do now?
Nothing. If the letter does not specifically ask you for a piece of documentation, there is nothing that you need to do at this point. They have 60 days to review your return(s), and if they need something after that, they will let you know.
If the letter specifically asks you for a piece of paperwork to back up something on the return, you should gather it and mail it in. Always send correspondences with the IRS via certified mail, so that you know when it was received, and save a copy of whatever was sent for reference.
In general, this letter is nothing to freak out about. If you have remained above board on all of your filings, and have all of your documentation in order to backup what you have claimed, then all will be fine.
If you have reason to believe that something on your return is NOT as it should be, and might trigger an audit, now is a good time to enlist a trained practitioner to see if you can get ahead of the issue.
Otherwise, just sit back, and wait for the 60 days. If they need something, they will let you know and give you an opportunity to respond.
Have questions? Hit me up at Sabrina@SernaTax.com
For more information about CP05 letters, head here: https://www.irs.gov/individuals/understanding-your-cp05-notice
*Disclaimer: This post does not contain any tax advice. These are simply concepts you should consider and discuss with your tax advisor. Without knowing your specific situation, and having an engagement letter in place, I cannot provide specific tax advice over an internet post or video. To discuss your specific tax situation, feel free to send me an email to make an appointment for consultation.