What a CP2000 notice from the IRS means

Employers, banks and other payers send the IRS a copy of the forms they give you, such as a W-2 or a 1099. The IRS compares those forms with your return. Where they differ, the CP2000 lists each difference, the change the IRS proposes, and the tax and interest that would result. The IRS says penalties may also apply, and may not be shown on the notice.

The notice number is printed in the right-hand corner. The same series also includes CP2000A to CP2000E.

Proposed changes

The changes the IRS proposes to make to your return, one for each difference it found. They are a proposal: nothing has been changed yet.

Amount due

The extra tax, plus interest, that you would owe if the proposed changes stand. If you agree and do not pay it or arrange an installment agreement, the IRS says it sends a bill.

Interest

Interest counted from the date the return was due up to 30 days after the date on the notice. The IRS keeps adding interest to any unpaid amount until the matter is resolved.

Due date

The date the IRS asks for your reply by. The IRS gives 30 days from the date of the notice, or 60 days if you live outside the United States.

Response form

The page you sign and send back. It offers two choices: “I agree with all changes” and “I don’t agree with some or all of the changes”. Disagreeing means sending an explanation and any documents you want considered.

Statutory Notice of Deficiency

The formal letter, numbered CP3219A, that the IRS sends by certified mail when there is no reply or no agreement. It gives 90 days from its date to file a petition with the US Tax Court, or 150 days if it is addressed to someone outside the United States.

If you agree, you sign the response form and send it back by the due date. On a joint return, both spouses sign. The IRS then works out the change in tax and sends a notice showing it.

If you disagree with some or all of the changes, you tick that box and send your explanation with any documents. If the IRS does not accept the explanation and no agreement is reached, it sends the Statutory Notice of Deficiency.

If no reply arrives by the due date, the IRS says it goes ahead with the proposed changes, and interest keeps adding up on any amount unpaid.