What is a CP2000 Notice?
The IRS gets information from various sources like employers and banks. If there's a mismatch between what they report and what you filed, you might get a CP2000. The Automated Underreporter (AUR) system helps us compare this data. It’s not a bill, but a proposal to adjust your income, payments, credits, and/or deductions. This could mean you owe more, or you might even get a refund!
What the CP2000 Includes
The CP2000 notice includes the following:
The amounts you reported.
The amounts are reported to the IRS by the payer.
Payer's information, like name, ID, document type (W-2, 1098, 1099), and taxpayer ID.
Proposed changes to your income, tax, credits, and/or payments.
A response form, payment voucher, and envelope.
How to Respond
First, check the notice carefully to see if you agree or disagree with the proposed changes. Here’s how to respond:
If You Agree
Complete, sign, and date the response form (both spouses must sign if you filed jointly).
Return it in the envelope provided.
Keep in mind that the CP2000 includes interest calculated from the return's due date to 30 days from the notice date. Penalties might also apply. Paying within 30 days can stop additional interest and penalties.
You can pay immediately, or wait for the IRS to adjust your account and send a bill. But remember, interest keeps accruing until it’s paid off.
You can explore payment options on the IRS Make a Payment page. If paying, use the payment voucher to ensure it’s applied correctly. You can also apply for an installment agreement using Form 9465, Installment Agreement Request, or apply online. If approved, a user fee may apply.
If You Disagree
Mark the appropriate box on the response form.
Send it back with a signed statement explaining why you disagree.
Include any documents that support your case.
Send everything to the address on the notice, and include your phone number and the best time to call, which may resolve issues quicker.
Important Note
Don’t file an amended return (Form 1040-X) for the tax year on the notice. The IRS will make the corrections once they receive your response. If you see the same error in another tax year, then file an amended return for that year.
What Happens Next?
Respond within 30 days of the notice date, or 60 days if you're outside the U.S., for a faster resolution. Use the envelope provided, or send your response to the address on the response form.
If the IRS doesn’t hear from you by the response date, they’ll send a Statutory Notice of Deficiency.
For more details, check out Understanding your CP2000 notice and Publication 5181, Tax Return Reviews by Mail, CP2000, Letter 2030, CP2501, Letter 2531 PDF.