IRS CP301 Notice: They Think You Underreported Income - Here's How to Fight Back
The IRS Says You Didn't Report All Your Income - Now You Have 30 Days to Prove Them Wrong
Receiving an IRS CP301 notice means the government believes you underreported income on your tax return, and they're proposing to increase your tax bill - often by thousands of dollars. This isn't just a simple billing error; it's an accusation that can trigger audits, penalties, and years of IRS scrutiny if not handled properly.
The critical issue: You have only 30 days to respond, and the IRS burden of proof standards heavily favor them unless you have professional representation and proper documentation.
The IRS CP301 notice is sent when the IRS believes you underreported income on your tax return based on information they received from third parties. This automated matching system compares income reported by employers, banks, and other entities against what you included on your return.
What Triggers a CP301 Notice:
Missing Income Documents:
- 1099 forms you didn't receive or forgot to include
- W-2 forms from multiple employers
- Bank interest and dividend statements
- Investment sales and capital gains
- Retirement account distributions
Gig Economy Income:
- Uber, Lyft, DoorDash, or delivery service payments
- Freelance work reported on 1099-NEC forms
- Online sales through eBay, Etsy, or other platforms
- Rental income from Airbnb or similar services
Automatic Assessment Risk
The 30-Day Trap: If you don't respond to your CP301 notice within 30 days, the proposed assessment becomes final and immediately collectible. This means:
- The additional tax becomes legally due
- Penalties and interest start accruing immediately
- Collection actions can begin without further notice
- You lose your right to dispute the assessment easily
Penalty Multiplication
Compounding Financial Consequences:
- Accuracy-related penalties: 20% of additional tax owed
- Failure-to-pay penalties: 0.5% per month of unpaid tax
- Interest charges: Compound daily on tax and penalties
- Collection costs: Added when enforcement actions begin
- Comprehensive Income Analysis - Line-by-line comparison of IRS claims vs. your records
- Professional Documentation - Supporting evidence professionally organized and presented
- Audit Protection - Strategic communication to limit scope of IRS examination
- Penalty Abatement - Requests using appropriate legal standards
Don't Let the IRS Win by Default
The CP301 notice you received isn't just a billing adjustment - it's the beginning of a process that can cost you thousands in unnecessary taxes and penalties if not handled professionally.
Call 972-519-0041 now - your 30-day countdown has already begun.