What Is a CP2000 Notice from the IRS?

IRS Notices Explained
Written by Enrolled Agent
Reviewed by Enrolled Agent

A CP2000 notice means the IRS found a mismatch between what you reported on your tax return and what third parties (employers, banks, brokers) reported. It’s not a bill, but it’s a proposal that could increase your taxes if unaddressed. Here’s what it means, why you received it, and how to respond.

Quick Answer

A CP2000 notice from the IRS is issued when the income, credits, or deductions you reported on your tax return don’t match information provided to the IRS by employers, banks, or other third parties. The notice proposes changes to your return and explains how it affects your taxes.

Important: A CP2000 is not a bill, but ignoring it can lead to an official assessment and collection action.

Why You Received a CP2000

  • Your employer or payer issued a W-2 or 1099 with income you didn’t report.
  • A bank or broker reported dividends, interest, or capital gains not included on your return.
  • IRS computers detected mismatches through the Automated Underreporter (AUR) program.

The notice doesn’t automatically mean you did something wrong. Sometimes the issue is a reporting error by the third party, or timing differences between reporting years.

What the CP2000 Means

A CP2000 outlines the IRS’s proposed changes to your tax return. If you agree, you’ll pay the additional tax, plus interest. If you disagree, you can respond with documentation to challenge the adjustments.

Key details include:

  • The items the IRS believes were underreported.
  • The proposed additional tax and interest.
  • Instructions on how to respond and by what deadline.

What to Do Next

You typically have 30 days from the date of the notice to respond. Your options are:

  • If you agree: Sign and return the response form, and arrange payment or set up a payment plan.
  • If you disagree: Send a detailed explanation with supporting documents (e.g., corrected W-2/1099, brokerage statements, records).
  • If partially correct: Accept some changes and dispute others. The IRS allows partial agreements.

Responding quickly protects your rights and prevents the IRS from escalating the issue into an official assessment.

Consequences of Ignoring It

If you don’t respond, the IRS will issue a statutory notice of deficiency (CP3219A). This becomes a formal assessment of tax due, adding penalties and interest, and can trigger collection actions.

Ignoring a CP2000 doesn’t make it go away — it makes it worse. Acting within the response window gives you more control and options.

How Polaris Can Help

At Polaris Tax & Accounting, we handle CP2000 notices for business owners, freelancers, and individuals across the U.S. Our Enrolled Agents review the notice, request IRS transcripts, and prepare a proper response that protects your position.

Whether you need to contest incorrect adjustments, negotiate a payment plan, or explore penalty abatement, we manage the process from start to finish.

Start here: Review our Complete Guide to Back Taxes in the U.S. for the big-picture roadmap on resolving tax issues.

Your Next Step: Don’t go back and forth with the IRS on your own. Schedule your consultation with Polaris Tax & Accounting today.

FAQs

Is a CP2000 an audit?

No. A CP2000 is not a full audit — it’s a proposed adjustment based on matching your return against third-party reports.

Do I need to amend my return?

No. The CP2000 process replaces the need for an amended return. You respond directly to the notice instead.

Can I fight a CP2000?

Yes. If you disagree, you can submit evidence. If unresolved, the IRS may escalate to a statutory notice, which preserves your right to petition Tax Court.

© Polaris Tax & Accounting. Nationwide Enrolled Agent representation. This content is for educational purposes and not personalized tax or legal advice.