4 19.2 IMF Automated Underreporter AUR Control Internal Revenue Service

We also help with tax debt resolution, emergency tax services, audit defense, IRS investigations, and much more. Reach out to Silver Tax Group to speak to a tax expert about the AUR and any IRS notices you receive. The AUR unit is responsible for identifying discrepancies on a tax return, which can ultimately result in additional tax liabilities, penalties, and interest. Understanding the AUR unit of the IRS is crucial for any taxpayer. It’s also wise to go through your past tax returns looking for the same error you made this time around.

• Consider how you’ll pay for this amount and whether you can pay it all at once or need to apply for an installment arrangement.
• They’re basically computer-generated mismatch notices, sent out if the information reported to the IRS by third parties doesn’t appear (to the IRS’ computers) to match the amounts shown on your return.
• I am writing on behalf of the above-named taxpayer pursuant to a power of attorney (Form 2848 attached).
• If the EIN and name control do not match at the parent (consolidated) level, the e-filed return will reject.
• These notices are quite common and are usually fairly easy to resolve.

We created the Wiztax system to allow anyone to start the process of getting their tax issues resolved online and filed without having to spend thousands on high priced lawyers or tax resolution firms. When a return or extension is filed, the IRS checks whether a name/TIN combination is correct by matching it against a file containing all employer identification numbers (EIN) issued by IRS. Try not to worry if you receive a CP2000 Notice from the IRS that was generated from the AUR unit. These notices are quite common and are usually fairly easy to resolve. Just be sure to follow these steps and do your due diligence in your research and response. This guide covers what the AUR unit is, how it works, and what to do if you receive an underreported income notice, also known as a CP2000 Notice.

Pay Any Additional Amount Owed

Once the taxpayer is matched to their Social Security number, the tax and information returns are compared to identify mistakes and potential omissions on the tax return. A name control is a sequence of characters derived from a taxpayer’s name that is used by IRS in processing the tax return filed by the taxpayer. It is important that the combination of name control and taxpayer identification number (TIN) provided on an electronically filed return match IRS’s record of name controls and TINs. While all tax returns are subject to the AUR process, only a portion of returns are selected each year. According to the IRS, business rules are applied in choosing which returns will be processed by the AUR. Those rules are designed to aim at taxpayers who have previously under-reported, high-asset taxpayers who might be more likely to under-report, and a mix from all taxpayer segments.

Taxpayer Digital Communication (TDC) – Secure Messaging feature that allows certain taxpayers to communicate electronically with the IRS during their CP2000 notice. TDC enables taxpayers to receive messages from the IRS, respond to questions, and upload documents using the Secure Messaging portal. Assessments (TC 29X) – A change to the amount of tax on the taxpayer’s account, this TC will generate a bill or a refund, a new DLN, and/or release a payment or freeze code. Our computer systems match the information you report on your tax return to information reported to IRS by third parties, such as, financial institutions, employers, and other businesses.

Section 2. IMF Automated Underreporter (AUR) Control

This letter is in response to an underreporter notice, referenced above (copy attached). Here is what we put after the heading for a client to whom the IRS had sent a CP2000 because our client had not reported several cryptocurrency transactions on his tax return. So I call the number listed on the notice to find out what is the discrepancy with what I filed. The lady on the phone basically just repeated the information on the notice and told me I was responsible for verifying myself. This did not align with my prior experience(s) with the IRS where they have always been very courteous and have explained to me the issues in my filing.

It is critical that you confirm whether or not the AUR notice is accurate before preparing your response. You need to work closely with the IRS to develop a plan to pay the owed amount, adjust future tax withholdings or estimated payments if necessary, and avoid similar discrepancies in the future. However, taxpayer does not agree with the proposed assessment of tax with respect to the items indicated under “Unagreed Items” for reasons stated previously. It’s important to keep a copy of all notices or letters with your tax records. Pay as much as you can, even if you can’t pay the full amount you owe. You can pay online or apply for an Online Payment Agreement or Offer in Compromise.

IRS Notice CP523: What To Do When the IRS Threatens to Terminate Your IA

One example of why a taxpayer receives a CP2000 after an AUR review is underreporting income. Employers must send copies of all employee W-2s, 1099s, or 1098s to the IRS so they know how much income an employee aur control number irs earned for a given tax year. Ensure the discrepancies are indeed errors and not just misunderstandings. Think about if there is an income stream you may have forgotten and look through your bank statements.

• Together with correspondence audits done via mail, the IRS brought in an additional $26.8 billion in suggested additional tax.
• The AUR unit plays a major role in the agency’s efforts to reduce the tax gap, which is the difference between the amount of tax owed and the amount of tax actually paid.
• The Screening phase of the Underreporter Program is also referred to as Case Analysis and Analysis.
• An expert like a tax attorney can help you navigate the AUR process and identify and correct any issues before they become major problems for you.
• Case Analysis – The technical review of computer identified discrepancies compared to the tax return.
• TDC enables taxpayers to receive messages from the IRS, respond to questions, and upload documents using the Secure Messaging portal.

You can then avoid further penalties and promote a sense of fairness and equity in the U.S. tax system. Knowing how the unit operates and what they are looking for can save you a lot of trouble and stress in the long run. Always work with an experienced tax professional, like a tax attorney, when you get a notice in the mail and you’re not sure what to do. You never want to risk taking a misstep or doing something that will lead to more penalties and issues with the IRS. A tax expert will help you get back in good standing with the IRS in no time. It is critical not to ignore an underreporter notice if you receive one.