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IRS & Financial ConsultingBurbank, CA· Independent management consultant
CP2000 Response Saved $23,400 in Proposed Tax
$31,000
Original CP2000 proposed tax
$7,600
Final tax assessed
$23,400
Net savings
The challenge
A consultant received a CP2000 proposing $31,000 in additional federal tax based on 1099 income the IRS believed was unreported. The taxpayer had reported it — under a different EIN — and panicked.
Our approach
- Reconstructed Schedule C income with full 1099 reconciliation.
- Identified four 1099-NECs the IRS had double-counted across two payer matches.
- Documented Schedule C expenses the original return had partially missed.
- Filed 30-day response with corrected calculations and supporting schedules.
The outcome
IRS accepted the response in full. Final assessment $7,600 instead of $31,000 — saving $23,400.
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