IRS Notice CP2000: Underreporter Inquiry

What does an IRS CP2000 notice mean?

A CP2000 is one of the most common IRS notices. It is generated by the Automated Underreporter program when income or payment information that employers, banks, and brokers reported to the IRS does not match what you reported on your return. Importantly, a CP2000 is a proposed change, not a bill and not an audit. It shows the IRS's recalculation and the additional tax, penalties, and interest that would result if the proposal stands.

Why did you receive a CP2000?

The IRS found a mismatch between a W-2, 1099, K-1, or similar document and your filed return — often from omitted interest, dividends, stock sales, retirement distributions, or gig income. Sometimes the mismatch is the IRS's, such as double-counted income or a sale where it ignored your cost basis.

How to respond to a CP2000 notice

Read the notice carefully and compare each flagged item to your records. If you agree, sign and return the response form and arrange payment. If you only partly agree, explain which items are correct and provide documentation for the rest. If you disagree entirely, respond in writing by the deadline with evidence (for example, brokerage statements showing your basis). Always respond on time even if you need more days to gather documents.

What happens if you ignore it?

The IRS will issue a Statutory Notice of Deficiency (a 90-day letter), formally assessing the proposed tax. After that, your only avenue to contest it without paying first is the U.S. Tax Court. Penalties and interest accrue throughout.

Common resolutions

• Agree with the changes
• Partially agree
• Disagree and provide documentation

Related IRS notices

• CP2501 — Underreporter Follow-up
• CP2057 — Information Verification
• LTR3219 — Statutory Notice of Deficiency
• LTR692 — Statutory Notice of Deficiency (90-Day Letter)