IRS Notice CP2000: What It Means and How to Respond
A CP2000 means the IRS's records don't match what you reported. It's a proposal, not a bill, and you have the right to agree, partly agree, or disagree.
Have a CPA review my CP2000A CP2000 is an underreporting notice. The IRS compared your return with W-2s, 1099s, and other forms it received and found a mismatch, then calculated the extra tax, interest, and sometimes a penalty it thinks you owe.
It's not an audit and not a bill yet. If the IRS is wrong, or only partly right, you can respond with documentation. If you don't respond, the IRS will send a Notice of Deficiency (CP3219A) and then assess the tax.
Where this notice falls in the IRS process
- Return filed
- IRS matches W-2s and 1099s to your return
- CP2000 — proposed changes — you are here
- CP3219A — Notice of Deficiency (if unresolved)
- Tax assessed and collection notices begin
What the IRS can do now
- Propose additional tax, interest, and an accuracy-related penalty of up to 20% of the underpayment.
- Send a Notice of Deficiency (CP3219A) if you don't respond or the issue isn't resolved.
What the IRS generally can't do yet
- Collect the proposed amount yet. A CP2000 is a proposal, not a bill.
- Make the change final without giving you the chance to respond and, later, to go to Tax Court.
Your options
Agree
If the IRS is right, sign the response form and pay, or set up a payment plan for the new balance.
Partially agree
Explain which items are right and which aren't, with documentation, such as cost basis for stock sales or a corrected 1099.
Disagree
Send a signed statement and proof, for example that income was reported elsewhere on your return or belongs to someone else.
Ask for penalty relief
If a penalty was proposed, you can request that it be removed for reasonable cause.
Get more time
Call before the deadline to request an extension to gather records.
What not to do
- Ignore it. Silence turns the proposal into a Notice of Deficiency, then a bill.
- Agree just to make it go away. CP2000s often overstate tax, especially on stock sales where the IRS doesn't know your cost basis.
- File an amended return in place of responding. Respond to the notice directly unless it tells you otherwise.
Got a CP2000? Don't agree until a CPA checks the math.
Tiffany V., CPA can compare the IRS's numbers with your records, prepare the response, and push back on anything that's overstated.
Book my CPA reviewFrequently asked questions
Is a CP2000 an audit?
Not a traditional one. It's an automated matching notice. But how you respond matters, because it decides whether the extra tax becomes final.
Why is the CP2000 amount so high on my stock sales?
Brokers sometimes don't report cost basis, so the IRS may treat the entire sale price as profit. Providing your basis often reduces or eliminates the proposed tax.
What happens if I miss the CP2000 deadline?
The IRS generally sends a Notice of Deficiency (CP3219A), which gives you 90 days to go to Tax Court. Call right away. Late responses are sometimes still considered.
Can I set up a payment plan if I agree?
Yes. Once the tax is assessed, you can set up an installment agreement like any other balance.
Written by Tiffany V., CPA, founder of Cents Savvy LLC. Last reviewed October 2026. This page is general information, not tax or legal advice for your situation. Cents Savvy LLC is a private CPA firm and is not affiliated with the IRS. Always follow the dates printed on your own notice.