What a CP2000 notice means
The IRS Automated Underreporter program compares information on your return with:
- Forms W-2
- Form 1098
- Form 1099
- Other information returns
If the IRS identifies a discrepancy after review, it may send a CP2000 showing what was reported and the proposed changes to your:
- Income
- Tax
- Credits
- Deductions
- Payments
The proposed adjustment may increase or decrease your tax, or result in no change.
Common reasons you might get a CP2000 notice
A CP2000 may result from:
- A 1099 form you forgot to include, especially if it arrived after you filed.
- Gig or freelance income reported on Form 1099-K or 1099-NEC that didn’t make it onto your return.
- Cryptocurrency or stock sales reported on Form 1099-B that weren’t reflected in your return.
- Interest or dividend income from a bank or brokerage account that went unreported.
Receiving a CP2000 doesn’t necessarily mean you intentionally left income off your return.
How to respond if you agree
If you agree with the proposed changes, complete, sign, and return the response form by the date listed on the notice. If you filed jointly, both spouses generally need to sign.
You typically don’t need to amend your return if the CP2000 is correct and you don’t have other income, credits, or expenses to report. The IRS will make the proposed adjustments.
How to respond if you disagree
If you disagree with some or all of the changes:
- Mark the appropriate box on the response form.
- Include a signed statement explaining why you disagree.
- Provide supporting documents, such as corrected tax forms or records showing how the income was reported.
- Send your response by the deadline using the IRS upload tool, fax, or mailing address provided on the notice.
If you need additional time to respond, you can request more time from the IRS using the same methods.
Note: If the same error appears on another year’s return, you may need to file an amended tax return for that year.
What happens if you don’t respond to a CP2000 notice
If you don’t respond by the deadline or the discrepancy can’t be resolved, the IRS may send CP3219A, a Statutory Notice of Deficiency. This notice explains the proposed tax change and your right to challenge it in U.S. Tax Court.
If you don’t petition the Tax Court by the deadline on CP3219A, the IRS can generally assess the proposed tax and send you a bill.
If you owe more than you can pay
If you agree with the CP2000 but can’t pay the full amount, you may be able to set up an IRS installment agreement (a monthly payment plan for IRS debt). Interest continues to accrue until the balance is paid, so responding to the notice by its deadline is still important.
