Receiving a CP2000 notice from the IRS can be unsettling. However, it is not an audit, and it does not necessarily mean you did something wrong.
This notice simply means the IRS found a difference between the income you reported on your tax return and the income reported to them by third parties, such as:
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Banks
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Employers
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Brokers
A CP2000 is a proposal—not a bill. You have the chance to review it and respond before any changes are made to your tax liability.
Why You Might Receive a CP2000
The most common reason is missing income on your return. This can happen when:
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You forget to include a 1099 for freelance work
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You miss a small dividend or interest payment
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You do not report a stock sale correctly
Sometimes, the issue is caused by incorrect reporting from a bank, brokerage, or employer. The notice will show:
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What the IRS received
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What you reported
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The proposed difference in tax owed (plus any penalties or interest)
First Steps After Receiving a CP2000
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Read the notice carefully.
It lists the income sources in question and explains the proposed changes. -
Compare it with your own records.
Check your tax return, W-2s, 1099s, brokerage statements, and other income documents. -
Look for errors.
Did you miss a form? Enter the wrong amount? Or is the IRS information incorrect?
How to Respond
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If you agree:
Sign the response form, return it to the IRS, and pay any additional tax owed. -
If you disagree:
Send a written explanation with supporting documentation, such as corrected 1099s, payroll records, or brokerage statements.
The IRS usually gives you 30 days to respond. If you need more time, call the phone number on the notice to request an extension.
Important Details
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You must respond by mail or fax.
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Online responses are not currently available for CP2000 notices.
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Ignoring the notice can lead to an automatic assessment and additional penalties.