IRS letter help
Got an IRS CP2000 Notice? What It Means and What to Do
A CP2000 means the income or payment information the IRS received from employers, banks and others does not match your return. It is a proposal, not a bill, and you get to answer it before anything is final.
Reviewed by LaToya Clark-Thompson, FounderLast updated
What this letter is
The CP2000 is the IRS’s underreporter notice. It compares what you reported with the forms third parties sent the IRS, such as Forms W-2, 1099-NEC, 1099-K, 1099-B, 1099-R and 1098, lists each item that does not match, and proposes changes to your tax. The change can raise your tax, lower it, or leave it the same.
The IRS is clear that it is not a bill. It is also not an audit in the usual sense: nobody has reviewed your records yet. It is a computer match, and the most common reasons it is wrong are things the match cannot see.
Why you got it
- A form arrived late, after you filed, or you never received it (often a 1099 from a bank or brokerage)
- A 1099-K or 1099-NEC covered income you did report, but on a different line or combined with other income on Schedule C
- A brokerage form showed sale proceeds, and the cost basis was missing or not reported, so the IRS treated the whole amount as gain
- A retirement distribution was rolled over but the 1099-R was not entered
- A form was issued under the wrong taxpayer number
What to do now
- Find the response date on the notice. The IRS Appeals office lists the CP2000 with a response window of 30 days from the date of the letter
- Go through each item the IRS lists and match it to your return and the forms you received
- If you agree and have nothing else to report, sign the response form and return it. You do not need to file an amended return
- If you agree but have other income, credits or expenses to report, the IRS asks for Form 1040-X with "CP2000" written at the top, sent with the response form
- If you disagree with any item, mark it on the response form and attach documents that show why: basis statements, rollover records, corrected forms
- Send the response by the online upload the notice offers, by fax to the number for the office on the notice, or by mail to the address at the top of the first page
If you need more time to gather records, call the number on the notice before the response date rather than after it. How to respond to an IRS letter covers keeping a record of what you sent.
What happens if you ignore it
The IRS says it may send another notice and a bill. In practice an unanswered CP2000 is generally followed by a statutory notice of deficiency, the CP3219A, which carries a fixed deadline to petition the U.S. Tax Court. After that the proposed tax can be assessed and collected like any other balance. Interest accrues on the added tax until it is paid, and penalties may apply.
How we help
We line up every form the IRS lists against your return, rebuild missing cost basis from brokerage records, and work out which items are right and which are not. If your return needs correcting, we prepare the amended return. We then prepare the response documents and a short item-by-item explanation for you to send.
If the matter needs professional representation before the IRS, it is handled by the independent licensed CPA we work with, with our office coordinating. See IRS audit defense and tax resolution.
What to send us
- A photo or scan of every page of the CP2000, including the response form, through the client portal
- The return for the year on the notice
- Every W-2 and 1099 you received for that year, and brokerage year-end statements showing cost basis
- Records for any item you dispute: rollover paperwork, corrected forms, statements showing income was already reported
Frequently asked questions
Is a CP2000 the same as an audit?
Not quite. A CP2000 comes from an automated match between your return and the forms third parties filed, not from someone examining your records. It proposes changes, and you can agree or disagree before anything is assessed. It is still serious, because if you do not answer, the proposed tax is likely to become final through a statutory notice of deficiency.
Do I need to file an amended return for a CP2000?
Only in some cases. If you agree with the changes and have nothing else to report, the IRS says you do not need to amend: you sign and return the response form. If you agree but also have other income, credits or expenses that should be on the return, the IRS asks for Form 1040-X marked CP2000 at the top, sent with the response. See amended returns.
What if my CP2000 shows stock sales with no cost basis?
That is one of the most common reasons a CP2000 overstates tax. When basis is missing, the IRS match treats the entire sale proceeds as gain. If you bought the shares, your brokerage statements or purchase records show the cost, and the gain is the difference. Mark the item as disagreed on the response form and attach the basis records.
How long do I have to answer a CP2000?
The response date is printed on the notice. The IRS Appeals office lists the CP2000 as offering a response window of 30 days from the date of the letter. If you need more time to gather records, call the number on the notice before that date. Waiting past it usually leads to a statutory notice of deficiency.
Not the question you had? The full tax FAQ covers more ground, and our client reviews say what the work is actually like.
Related pages
CP3219A notice of deficiency
The 90-day letter. A proposed change to your tax and a Tax Court deadline that cannot be extended.
Learn moreHow to respond to an IRS letter
Check it, decide whether you agree, gather support, reply by the date, and keep proof.
Learn moreCP11 notice
The IRS changed your return and now you owe. Check the change and call by the date if you disagree.
Learn moreLetter 566 (audit by mail)
Your return was selected for audit. Usually a mail audit of a few items, answered with documents.
Learn moreHow to read an IRS letter
Where the notice number, tax year, amount and response date sit on the page, and what each means.
Learn morePart of IRS & SC Letter Help. Not sure which service fits? Answer a few questions.
Tell us what you need
Send a short note about your situation and we’ll come back to you with a straight answer — whether that’s a quote, a next step, or a referral if it isn’t something we handle.
Prefer to talk it through first? Book a consultation and we’ll find a time, in the Easley office or virtually.
Send us the letter. We will tell you what it means.
Call (864) 781-4035 or book a consultation, in the Easley office or virtually.