NOTICE CP102

IRS Notice CP102 is a notice that the IRS sends to businesses to inform them that they have made changes to their tax return because they believe there is a mistake. As a result of these changes, the business may owe more money in taxes.

There are a number of reasons why businesses may receive IRS Notice CP102, including:

• Mathematical errors on the tax return. This could include errors in calculating deductions, credits, or income.
• Failure to report all income. This could include income from sales, investments, or other sources.
• Overreporting deductions or credits. This could include claiming deductions or credits that are not allowed by law or that the business is not eligible for.
• Incorrectly reporting depreciation. This could include reporting depreciation on assets that are not depreciable or claiming too much depreciation.
• Incorrectly reporting employment taxes. This could include failing to report all wages paid to employees or failing to withhold the correct amount of taxes from employee paychecks.

If a business receives IRS Notice CP102, they should carefully review the notice to understand the changes that the IRS has made to their tax return. They should also review their own records to see if they can identify the source of the error.

If the business believes that the IRS has made a mistake, they can contact the IRS to dispute the changes. They may need to provide documentation to support their claim.

If the business agrees with the IRS’s changes, they should pay the additional tax that is due. They can do this online, by mail, or by phone.

There are a number of things that businesses can do to avoid receiving IRS Notice CP102, including:

• Carefully review their tax return before filing it. This will help to ensure that there are no mathematical errors on the return.
• Keep accurate records of all income and expenses. This will make it easier to complete the tax return accurately and to provide documentation to the IRS if necessary.
• Consult with a tax professional if they have any questions about their tax return or if they are unsure about whether they are eligible for a particular deduction or credit.