Please check this link for guidance: Understanding your CP2000 notice | Internal Revenue Service.
With a $25,000 discrepancy, the $9,000 owed suggests a significant penalty has likely been applied. If they maintain good standing, it’s possible to have the penalty (and its interest) waived.
Afton said:
With a $25,000 discrepancy, the $9,000 owed suggests a significant penalty has likely been applied. If they maintain good standing, it’s possible to have the penalty (and its interest) waived.
Consider the potential EITC repayment if income is low enough with qualifying dependents. The tax on $25,000 wouldn’t be excessive, but it could disqualify them from EITC, causing repayment issues.
Afton said:
With a $25,000 discrepancy, the $9,000 owed suggests a significant penalty has likely been applied. If they maintain good standing, it’s possible to have the penalty (and its interest) waived.
I think the $9,000 stems from $6,000 owed plus $3,000 from previous tax refunds.
Amend the return to include any missing documents like the W-2. If you’re expecting a refund, the IRS will not apply penalties or interest while processing. However, if you owe money, penalties and interest will still apply.