Understanding IRS Notice CP2566 and How an Enrolled Agent Can Help

IRS Notice CP2566 is issued when the IRS has not received a required tax return and is proposing a tax assessment based on income information it has on file. This notice is a clear signal that prior requests to file have gone unanswered and the IRS is now moving forward with estimating the tax owed. It is a serious matter that requires timely and appropriate action. An Enrolled Agent (EA), a federally licensed tax professional, can assist in addressing the notice and resolving the issue efficiently.

📌 Purpose of IRS CP2566

CP2566 is typically sent after the IRS has already issued earlier notices, such as CP59 or CP515, which request a missing return. If the IRS still does not receive the return, it uses third-party information, such as W-2s and 1099s, to create a proposed tax assessment. This estimate is often inaccurate or inflated, as it does not take into account any deductions, credits, or correct filing status.

The CP2566 notice includes:

• The tax year for which no return was filed

• A proposed tax amount, including penalties and interest

• Instructions to either file the return or dispute the assessment

• A response deadline to avoid further enforcement action

🧾 Common Reasons for Receiving CP2566

• A required tax return was never filed

• A return was submitted but not processed due to errors or missing information

• The IRS did not receive the return

• There was a mismatch in identification, such as a Social Security number or name

Even if a taxpayer was not required to file, the IRS must be informed of that fact with a proper explanation.

✅ Available Options

Taxpayers who receive CP2566 have several ways to resolve the issue:

1. File the Missing Return
Filing the return allows the taxpayer to provide accurate information, claim eligible deductions and credits, and ensure the correct tax liability is calculated.

2. Dispute the Proposed Assessment
If the taxpayer believes that the IRS made an error, a written explanation with supporting documentation can be submitted to challenge the proposed amount.

3. Seek Professional Representation from Books, Taxes & More
An Enrolled Agent can retrieve wage and income transcripts, prepare an accurate return, and manage all communication with the IRS.

4. Take No Action (Not Recommended)
Failure to respond will result in the IRS finalizing the assessment and initiating collection actions, including potential liens and levies.

👨‍💼 How an Enrolled Agent from  Books, Taxes & More Can Assist

Steve Perry, Enrolled Agent is uniquely qualified to represent taxpayers before the IRS and can handle every step of the CP2566 process, including:

• Accessing IRS wage and income transcripts to reconstruct a missing return

• Preparing and filing accurate back tax returns

• Communicating directly with the IRS to clarify errors or disputes

• Requesting penalty relief and setting up payment plans if needed

• Advising on future tax compliance to avoid similar issues

An EA acts as an advocate, ensuring that the taxpayer’s case is properly presented and that rights are protected throughout the process.

📣 Conclusion

IRS Notice CP2566 represents a significant step in the IRS’s enforcement process when a required tax return has not been filed. The proposed tax liability may be inaccurate and result in unnecessary financial burden if left unaddressed. With the guidance of Steve Perry, Enrolled Agent, the situation can be resolved through proper filing, documentation, and professional communication with the IRS. Early intervention by Steve at Books, Taxes &More can prevent further penalties and lead to a more favorable outcome.