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IRS CP2000: Proposed Changes to Your Return (Underreported Income)

Urgent — severity 4/5 Reviewed for accuracy · Updated 2026-07-14 · Notice Decoder

Straight answer: A CP2000 is NOT a bill and NOT an audit. The IRS matched the income reported on your return against W-2s, 1099s, and other forms it received from employers, banks, and brokers — and found a mismatch. The notice proposes additional tax, penalties, and interest based on that mismatch.

How many days do I have to respond to a CP2000?

30 days from the date printed on the notice (not the day you opened it). You generally have 30 days from the notice date to respond (60 days if you're outside the U.S.). Miss it and the IRS issues a Statutory Notice of Deficiency (CP3219A), which starts a 90-day clock to petition Tax Court.

What should I do right now?

  1. Compare the notice's reported income items against your own records — the IRS's matching is frequently wrong on stock/crypto sales because brokers report gross proceeds without your cost basis.
  2. If you disagree (even partially), respond in writing with documentation by the deadline — do NOT just pay if the basis is wrong.
  3. If you agree, sign the response form and arrange payment or an installment agreement.

The costly mistake people make with a CP2000

The #1 costly mistake: paying a CP2000 that ignores cost basis on investment sales. If you sold $50,000 of stock you bought for $48,000, the IRS may propose tax on the full $50,000. A correct response can reduce a five-figure proposal to a few hundred dollars.

Do I need professional help with a CP2000?

Worth professional help when the proposed amount exceeds a few thousand dollars, involves investment/crypto basis, self-employment income, or multiple years.

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