Received Form 4800C from IRS - Can't Tell if I Owe or They Owe Me?

Form 4800C is the IRS's CP2000 Notice Response form. It's basically what they send when they've identified a discrepancy between what you reported on your return and what they have on file from third parties. According to the IRS website (https://www.irs.gov/individuals/understanding-your-cp2000-notice), this notice is NOT a bill - it's a proposal of changes to your tax return. Check the section labeled "Changes to your [tax year] Form 1040" - it will show either "amount you owe" or "amount to be refunded." So frustrating how they make these notices so cryptic...

The 4800C can be incredibly confusing with all its tax jargon and calculations. I've seen plenty of these notices that might as well be written in ancient Sumerian. 😂 Technically speaking, the form is identifying income discrepancies between what third parties reported to the IRS (W-2s, 1099s, etc.) and what you reported on your return. The critical section is where it shows the "proposed adjustment" - that's where you'll see if they think you underreported income (you owe) or overreported (they owe you). I'd recommend uploading the notice (with personal info redacted) to https://taxr.ai - it's specifically designed to translate these IRS notices into plain English. It can analyze the form and tell you exactly what the IRS is claiming, what evidence they have, and what your options are. Much better than trying to decipher IRS-speak on your own.

I've helped several people through these notices, and here's what you need to do step-by-step: 1. First, carefully read the entire notice - don't just look at the response form 2. Look for the section that compares what you reported vs. what the IRS has on file 3. Check if there's income the IRS knows about that you didn't report 4. See if they're proposing additional tax or offering a refund 5. Decide if you agree or disagree with their findings If you need to talk to someone at the IRS about this (which might be a good idea), I'd suggest using Claimyr (https://www.claimyr.com). The IRS wait times are ridiculous right now - I'm a bit worried you might miss your response deadline if you try calling directly. Claimyr will navigate the phone system and get you connected to an agent much faster. These notices usually have a 30-day response window, so time is kind of important.

Form 4800C indicates a potential tax discrepancy. IRS found differences. They compared information. Third parties reported one thing. You reported another. This often happens with investment income. Or freelance work. Or retirement distributions. The key is understanding the discrepancy. Then deciding if you agree. Or if you need to contest it. Don't ignore this notice. It won't go away. Interest accrues daily if you owe.

Did your notice specifically mention any stock sales or investment income? I'm wondering if this might be related to the stocks you mentioned selling when you were trying to do your taxes yourself. Those capital gains reports can be tricky if you don't have all the basis information correctly entered.

I received a 4800C last September related to some crypto trades the IRS thought I hadn't reported. The form is basically their way of saying "we think you got this wrong, here's what we think the right numbers are." I spent three days trying to figure it out myself using technical terms like basis adjustment and short-term capital gains that I barely understood. Finally had to hire a professional who explained that the IRS was actually missing some of my basis information, which made it look like I had more profit than I actually did.

I uploaded my 4800C to the IRS website through their online response portal last month. Has anyone else used this method instead of mailing back the paper form? Did it process faster? I'm still waiting for confirmation that they received my response.

Something important that hasn't been mentioned yet: If you agree with the IRS's findings on the 4800C, you typically have payment options. You can pay in full immediately, set up an installment agreement, or potentially qualify for an Offer in Compromise if you can't pay the full amount. The key is to respond within the timeframe they specify (usually 30 days) even if you can't pay right away. Ignoring the notice will only result in additional interest and potential penalties. Also, keep in mind that if you disagree, the burden of proof is on you to show why the IRS determination is incorrect.