Responding to an IRS CP2000 notice (don't panic — but do respond)
A step-by-step walkthrough of how to read, evaluate, and respond to an IRS CP2000 automated notice — the most common IRS letter Bay Area residents receive.
A CP2000 notice is not a bill. It's a proposed change to your tax return, based on what the IRS thinks you should have reported. Often, the IRS is wrong — but you still have to respond.
Step 1: Read the notice, twice
The notice will list specific income items the IRS believes you didn't report — usually 1099s or stock sales — with a proposed new tax total. It gives you 30 days to agree or disagree.
Step 2: Compare against your return
Pull your original return. Line-by-line, verify whether the missing item was actually reported (often on a different schedule than the IRS's letter suggests). Basis on stock sales is a very common source of CP2000 errors.
Step 3: Draft a written response
If you disagree — fully or partially — you write a response and attach supporting documentation. If you agree, you sign and return the response form. Ignoring the notice is the worst option; the IRS will simply assess the proposed change.
How we help
Most of the CP2000 cases we see are either partially right or completely wrong. We routinely reduce proposed assessments significantly with a clean written response — usually within a couple of business days of receiving the notice.