So you sell your home – as a primary residence, you should not pay tax unless you profited more than the threshold amount (250k for single and 500k for joint filers) and you know you meet the exemption. 

So, you file your tax return without reporting the sale of home. Little did you know that there was a 1099-S filed. A 1099-S must be reported on your tax return, even if you meet the exclusion criteria. 

The IRS’s computers will look for the sale of home on your return & if it is not there, you will receive a CP-series letter, most commonly a CP2000 to start. They will assess tax on the full sale proceeds without taking into account the basis (what you bought it for). This can be a large sum of money. 

Of course, we are frequently called in panic when this happens, since the assessment amount tends to be high. Luckily, we know how to get this removed quickly for you.

Contact us below if you have received a CP2000 from sale of a primary residence and we can get this removed, including both the assessed tax as well as the understatement penalty.