What it is
A computer matched two documents and they did not agree.
A CP2000 comes out of automated matching. The income reported to the IRS on a W-2, a 1099 or a broker statement did not line up with what appeared on your return, so the system proposed the change and printed the difference.
Nobody examined your return before that notice was mailed. That matters, because the mismatch is often explained by something the matching program cannot see: income you reported on a different line, a cost basis the broker never furnished, a duplicate information return, or a payment that was reported under the wrong year.
The worst thing you can do with a CP2000 is nothing. If you do not respond by the date on the notice, the IRS moves to assess the proposed amount, and unwinding an assessment is meaningfully harder than answering a proposal.
Who this is for
What a complete response has to do.
- Address every proposed item separately, agreeing with the ones that are right and disputing the ones that are not.
- Show where the disputed income actually appears on your return, or why it was never taxable income to you in the first place.
- Attach the documents that prove it, and keep a copy of everything you send along with proof of mailing.
- Address the accuracy related penalty directly where the notice proposes one, rather than leaving it unanswered.
Partial agreement is normal and it is allowed. A response that concedes the one item you got wrong and documents the three the IRS got wrong is stronger than a blanket denial.
The authority
What we cite when we prepare your response.
Where the notice proposes an accuracy related penalty, that penalty is imposed under Internal Revenue Code Section 6662, and the response asks that it not be imposed under Internal Revenue Code Section 6664(c).
Section 6664(c) is the reasonable cause and good faith exception to the accuracy related penalty. It is the provision that says a taxpayer who reported what they genuinely believed to be correct, and had a reasonable basis for believing it, should not carry a penalty on top of the correction. That argument has to be made. It is not applied automatically.
How to respond
Four steps, in the order that works.
Find your response date
It is printed on the notice, and it is the only date that matters right now. IRS notices carry response windows, commonly 21 to 60 days depending on the notice.
Check each proposed item against your return
Go line by line. Decide for each one whether the IRS is right, whether you already reported it somewhere else, or whether the underlying document is simply wrong.
Write the point by point reply
One paragraph per proposed item, each with the document that supports it, plus the accuracy related penalty argument where the notice proposes one.
Send it and confirm receipt
Mail or fax it by the response date and keep the confirmation. About three weeks later, call to confirm your response was received and to check the status.
Questions people ask
Straight answers
Does a CP2000 mean I am being audited?
No. It is automated document matching, not an examination, and no person reviewed your return before it was mailed. It becomes far more serious if you ignore it, because the IRS then moves to assess the amount it proposed.
What if I agree with part of it but not all of it?
Partial agreement is normal and it is allowed. A response that concedes the one item you got wrong and documents the three the IRS got wrong is stronger than a blanket denial, and it is what a complete point by point reply is built to do.
What happens if I miss the response date?
The IRS moves toward assessing the proposed amount, and unwinding an assessment is meaningfully harder than answering a proposal. If the date has already passed, respond anyway and call the number on your notice, because late is still better than silent.
Can I just pay it to make it go away?
You can, and sometimes that is the right call. But you would be paying tax on income you may have already reported, plus a penalty that Section 6664(c) may say should not apply to you at all. Check first. The eligibility check costs nothing.
Free eligibility check
Find out where you stand in about a minute.
Seven questions. No Social Security Number, no documents, no signup, and nothing you type is stored or sent anywhere. If you do not have a case, it says so and you pay nothing.