Updated November 2026 · VG CPA PC advisors
What a CP2000 is
The IRS Automated Underreporter program matches every return against W-2s, 1099s, 1099-Bs, K-1s and other information returns. When something reported to the IRS is missing from your return, or the amounts differ, the system generates a CP2000 proposing additional tax, interest and often a 20% accuracy-related penalty.
A CP2000 is not an audit and is not yet an assessment. You have the chance to agree, partly agree or disagree before anything is assessed. The notice lists each mismatched item, so you can see exactly what the IRS thinks you missed.
How to check the notice
Compare each listed item with your records. Common causes include stock sales where the 1099-B did not show cost basis, so the IRS treats the full proceeds as gain; income reported under the wrong taxpayer ID; duplicate reporting of the same income; and retirement distributions that were rolled over.
Look for items that were reported on your return but in a different place, such as business income reported on Schedule C rather than as wages, or a K-1 reported through a different entity. These are usually resolved simply by explaining where the income appears.
How to respond
Return the response form by the date on the notice, usually 30 days (60 if you are outside the US). If you disagree, explain why and attach support such as brokerage cost-basis statements, rollover confirmations or corrected forms. Do not file an amended return unless the notice asks for one; respond to the notice itself.
If you need more time, call the number on the notice before the deadline. If you do not respond, the IRS will send a statutory notice of deficiency (often CP3219A), which starts a 90-day window to go to Tax Court. Penalties can also be challenged for reasonable cause.