What Is IRS Notice CP2000?

A CP2000 is a notice from the IRS's Automated Underreporter (AUR) program proposing changes to your tax return because information the IRS received from third parties — employers, banks, brokerages, freelance clients — doesn't match what you reported. It's sometimes called an "underreporter notice," though it can also result in a refund if the discrepancy works in your favor.

The CP2000 is not a bill and it's not an audit. It's a proposal — the IRS is suggesting that based on the information they have, you may owe additional tax, penalties, and interest. You have the right to agree, disagree, or partially agree. The notice will clearly list the income items the IRS received (such as a 1099-NEC from a client, a 1099-B from your brokerage, or a 1099-INT from your bank) alongside what your return reported, and calculate the proposed additional tax based on the difference.

Before responding, carefully review the discrepancy. Common reasons a CP2000 might be wrong or overstated: you reported the income correctly but in a different spot on the return; you have expenses or basis that offset the income (for example, cost basis on a stock sale reduces the capital gain); you already paid the tax and it was misapplied; or the payer issued an incorrect 1099. If the CP2000 is wrong or overstated, you should respond by mail with documentation — don't just agree and pay an amount you don't owe.

If the notice is correct, the simplest resolution is to sign the agreement form enclosed with the notice and pay the additional amount. If you agree but can't pay in full, you can indicate that on the response form and the IRS will work with you on a payment arrangement. You typically have 60 days from the date of the notice to respond — responding by the deadline prevents the proposed changes from becoming automatic. If you don't respond, the IRS will send a Statutory Notice of Deficiency (CP3219A), which gives you 90 days to petition the Tax Court before the proposed assessment becomes final.