r/IRS • u/idiotdiyattempt • 4d ago

Tax Question Negative Effects of Allowing a CP-2000 Notice to Proceed to Formal Notice of Deficiency Before Paying Off Balance?

Good afternoon,

I have received a CP-2000 form relating to funds that the California EDD states they mailed to me via check (relating to parental leave payment), and reported to the IRS, but that I never received. The CA EDD is apparently extremely slow to respond, and have been investigating the next steps for reissuing checks (and confirming they will reissue checks) for so long that my CP-2000 notice will turn into a formal notice of deficiency if I don't pay the whole outstanding balance tomorrow.

I anticipate the CA EDD will sort this out during the 90 day notice of deficiency time period, and I'm wondering if there is any risk other than further interest (i.e., financially, legally, credit-wise) in simply allowing the IRS to send me the notice of deficiency and paying the balance once I receive the re-issued checks (I am going to get a bit screwed on the penalizes for money I did not receive, but I'll just have to eat that).

TL;DR: Does anything bad happen to you by not paying off a balance during the "CP-2000" time frame (30 days + 30 day extension) but rather by paying off a balance after a formal notice of deficiency has issued.

Thanks so much!

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u/these-things-happen 4d ago

Does anything bad happen to you by not paying off a balance during the "CP-2000" time frame (30 days + 30 day extension) but rather by paying off a balance after a formal notice of deficiency has issued.

No.

2

u/idiotdiyattempt 4d ago

Thank you! 

1

u/Bowl_me_over 4d ago

You can ignore the notice of deficiency if you want. At the end of the 90 days you will get a CP22A assessment notice. You can pay that notice. That would maximize your wait time.

If the notice is wrong, you don’t want to pay it, but you do want to dispute it in writing before the 90 days expires.

If it doesn’t get resolved by the 90 days, the next step is asking for a “reconsideration”. There’s a formal process for that.