I received a cp2000 because the IRS did not receive a 1098-T form for my spouse's education credits claimed ==>> The IRS sent you a CP2000 as the IRS received information from a third party that doesn?t match the information you reported on your tax return.
We cannot produce these documents or obtain them from his school. We also cannot provide bank statements to show any tuition paid, and he did not receive any scholarships or grants. We will need to go ahead and pay the tax. ===>The 1098-T form is an informational return for your personal records. If you received more scholarships and/or grants than the amount of qualified tuition and fees billed, the University is not required to produce a 1098-T.In general, Schools must send the form to the student by Jan 31 and file a copy with the IRS by Feb 28.So the IRS has a copy of the 1098-T;
So even though the letter says that we do not need to amend our 2014 return, I am wondering if we still should, especially since I don't believe we owed $2500 before the credits were applied. I believe we would owe less and not the $2500 plus interest that the IRS is calculating. ===>>As it was not imposed on your 1040( I mean UNLESS you claimed the credits of $2500 on your 1040), I do not think you need to file 1040X; however,You need to contact the sender, the IRS , to know(to let them know on what you know) what you need to do first. If the information displayed in the CP2000 notice is incorrect, you may let the IRS fix it and you do not need a 1040X. Ass aid no penalties/interest is imposed on your 1040.
Or is too late to file an amended return since the CP2000 has already been sent?====>>I do not think so;as said you do not need to file a 1040X .
In addition, we will need to amend our 2015 return for the same reasons before the IRS catches it, but I'm almost certain that will trigger an audit. Still, I suppose that would be better than having them assess penalties plus more interest.
So my questions are:
Is there any way to negotiate the $2500 plus interest the IRS is assessing for the 2014 return?=>>As said you need to contact the IRS and let them know on what you know ; it is up to their decision.
Should we file an amended return for both 2014 and 2015, or just 2015?==>>As said it depends;
How long do I have to amend our 2015 return?===>>It depends; aslongas you amend the return for refund , then, IRS limits the amount of time you have to file a 1040X to the later of 3 years from the date you file the original tax return, or 2 years from the time you pay the tax for that year. Say, you file your 2015 tax return long before the April 15, 2016 deadline because you were due a $800 tax refund. If you later discover a tax deduction you are eligible for, but failed to claim, you have until April 15, 2019 to file a 1040X and collect the additional tax refund that the deduction will provide you with.if not, then, at any time .