CP2000

tax.idaho.gov/cp2000

CP2000 is a federal (IRS) program that compares the income and deductions reported on your federal tax return with information reported from other sources (e.g., employers, banks, businesses). If the amounts don't match, the IRS adjusts your tax return and advises you of this adjustment by mailing you a CP2000 notice.

Your responsibility after receiving an IRS CP2000 notice

Income and deduction amounts on your Idaho tax return must match those reported on your federal tax return unless a specific Idaho or federal law provides otherwise.

You must promptly contact the Tax Commission to adjust your Idaho return if the IRS has adjusted your federal income tax return. This must occur within 60 days of the final federal determination to avoid a negligence penalty. Interest will accrue on the amount you owe.

You can either:

• File an amended Idaho individual income tax return, attaching a copy of your federal CP2000 notice and copies of any other relevant documents, or
• Provide the Tax Commission with a copy of your federal CP2000 notice and copies of any documents

If you're amending a return that's beyond the three-year statute of limitations, you can only amend items directly relating to the CP2000.

Mail to:

Tax Discovery Bureau - CP2000
Idaho State Tax Commission
PO Box 36
Boise ID 83722-0410

TIP: Review your tax returns for years surrounding the CP2000 period to see if changes are needed for those years as well. If so, file amended tax returns for those years as quickly as possible. This could help you avoid an audit later on.

Idaho is informed of IRS CP2000 adjustments

The IRS forwards information on its CP2000 audits to many states, including Idaho. This can occur years after the initial IRS inquiry, and interest can continue to accrue on any additional balance due. This is one reason why it's important to contact Idaho promptly.

You have 60 days from the resolution of your federal audit to file an amended Idaho return and include copies of all audit reports. If you don't file an amended return or notify us, the state can adjust your return to make it match the IRS's findings at any time in the future.

Note: You may lose the ability to claim a refund if you don't amend within one year of the federal CP2000 audit notice.

The Idaho CP2000 Billing Letter is the first step in the Tax Commission's review of the CP2000 information shared by the IRS. It gives you 28 days to:

• Research the adjustment
• Make payments
• Protest   (Read more about CP2000 protests »)

If you agree with Idaho's calculation of tax, you can sign, date, and return the Consent to Assessment attached to the Idaho CP2000 Billing Letter. This will allow us to close the audit quickly and also allow you to enter into a formal payment arrangement, if necessary. Paying the balance in full with no protest will also close your Idaho CP2000 audit.

If you don't respond and a balance remains after the 28 days, you'll receive a Notice of Deficiency Determination (NODD). This notice provides you 63 days to protest. If no protest is received and a balance remains, the balance on the notice becomes a debt to the state of Idaho and your account is then transferred to our Collection Division.

Make payments

• Pay online: You can pay online through TAP. Read more about paying online on our E-pay page.
  In TAP, be sure to select the year of the CP2000 and choose "Audit" in the Payment Type field so that your payment will apply correctly. (Read more: How do I make a payment on my audit?)
• Pay by mail: Include the voucher stub provided with our letters.
  If you don't have a voucher, write your Social Security number or Tax ID number, the year of the audit, and "audit payment" on the memo line of your check so that your payment will apply correctly.

Think you already paid?

If you think you already paid the Idaho CP2000 audit bill, please check your records again. You may be thinking of your payment to the IRS. If you find you have already paid Idaho:

• If you paid by check: Send us a legible copy of the front and back of your cancelled check
• If you paid by credit card: Send us the confirmation number and amount and date of payment

Formerly married (filing jointly) but no longer married to spouse

If you filed "married filing jointly" for the tax period in question, both you and your spouse are legally responsible for the entire tax due, penalties, and interest. This applies regardless of what may be stated in a divorce decree. The Tax Commission will attempt to collect the debt from both spouses. However, if your spouse doesn't pay, we'll continue to pursue collection from both parties until the debt is paid in full.

Laws and rules

• Income Tax Law Code section 63-3045. Notice of redetermination or deficiency - interest
• Income Tax Law Code section 63-3046. Penalties and additions to the tax in case of deficiency
• Income Tax Law Code section 63-3068(f). Period of limitations for issuing a Notice of Deficiency and collection of tax -- "...adjusted as a result of a final federal determination..."
• Income Tax Law Code section 63-3069. Notice of adjustment of federal or state tax liability
• Income Tax Law Code section 63-3072(d). Credits and refunds -- "...the period of limitations for claiming a refund or credit..."
• Income Tax Administrative Rule 890
• Tax Commission Administration and Enforcement Rule 410

Additional help

If you have questions on CP2000 audits that this page doesn't answer, contact us.

Read Federal Filing Changes and Your Idaho Income Tax Return (08-04-2017)

If you'd like someone else to represent you during your audit, complete and return this Idaho Power of Attorney (POA) form:

• POA Power of Attorney – POA (02-06-2017)

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Last updated Jan. 20, 2017