CP2000 Notice
IRS Definition:
The income and/or payment information the IRS has on file doesn’t match the information you reported on your tax return. This could affect your tax return; it may cause an increase or decrease in your tax, or may not change it at all.
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The IRS generates the CP2000 letter, Notice of Proposed Adjustment for Underpayment/Overpayment, when IRS systems detect unreported income on Form 1040.
When your tax return doesn’t match information reported to the IRS by your employers and other payers (from Forms W-2 and 1099, for example), you’ll get a CP2000 notice. These are also called underreporter inquiries.
Because the IRS automatically generates CP2000 notices, many are not correct. It’s important to follow these best practices when dealing with a CP2000 notice:
- Respond to the IRS quickly with a corrected tax return or an explanation
- Address any related penalties
- Request an appeal if the IRS disagrees with your correction
Not responding to this notice means the IRS will charge you the taxes, with additional penalties and interest, and send you a bill for payment.
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Related Information
Learn how the IRS matches your information to generate CP2000 notices, and how to handle one of these underreporter inquiries if the IRS contacts you.
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If you need more time to respond to an IRS CP2000 notice, ask the IRS to extend the notice deadline. Learn exactly what to do to get more time from the IRS.
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Here are the five things you need to know to respond to the IRS when you get an incorrect CP2000 notice, including how and when to respond.
The IRS negligence penalty is 20% of the amount you underpaid your tax. Learn about your options to address it from the tax experts at H&R Block.