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High PriorityIncome Verification

CP2000

Income Discrepancy Notice

Complete guide for tax professionals on responding to IRS CP2000 notices, including deadlines, required documentation, and response strategies.

Response Deadline

30 days

IRS: 1-800-829-1040View on IRS.gov

What Triggers This IRS Notice

  • 11099 income not reported on the tax return (1099-NEC, 1099-MISC, 1099-INT, 1099-DIV, 1099-B)
  • 2W-2 wages that don't match what was reported
  • 3Discrepancies between employer/payer reported amounts and taxpayer reported amounts
  • 4Missing Schedule D for stock sales reported on 1099-B
  • 5Unreported cryptocurrency transactions reported by exchanges

What the IRS Is Claiming

  • The IRS received information from third parties (employers, banks, brokers) that differs from what was reported
  • Additional tax is owed based on the unreported income
  • Interest has been calculated from the original due date
  • The proposed changes may affect other items on the return

Key Deadlines and Response Timelines

You have 30 days from the date of the notice to respond. If you don't respond, the IRS will assume you agree with the changes and send a bill for the additional tax, plus penalties and interest.

What Happens If You Do Not Respond

  • The proposed changes will be assessed automatically
  • A CP3219A (Statutory Notice of Deficiency) may be issued
  • Interest and penalties will continue to accrue
  • Collection actions may begin if the balance isn't paid
  • Your tax account will be adjusted without your input

Documentation Commonly Required

Copy of the CP2000 notice
Original tax return for the year in question
All W-2s and 1099s received
Corrected 1099s if the original was wrong
Brokerage statements showing cost basis (for 1099-B issues)
Records of estimated tax payments made
Any correspondence with payers about incorrect information

When IRS Information Is Incorrect

  • 1
    Request a corrected 1099 from the payer if the amount is wrong
  • 2
    Provide documentation showing the income was already reported elsewhere
  • 3
    Show cost basis records if the IRS is calculating gains incorrectly
  • 4
    Demonstrate that the income belongs to a different taxpayer
  • 5
    Prove the 1099 was issued in error (e.g., returned merchandise reported as income)

How Tax Professionals Typically Respond

  1. 1

    Review the CP2000 carefully and compare to the original return

  2. 2

    Gather all supporting documentation

  3. 3

    Complete the response form included with the notice

  4. 4

    If you agree: sign and return with payment (or request a payment plan)

  5. 5

    If you partially agree: explain which items are correct and which are disputed

  6. 6

    If you disagree: provide detailed explanation with supporting documents

  7. 7

    Send response via certified mail with return receipt

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