Response Desk/CP2000

IRS Notice CP2000 · Underreporter Notice

A CP2000 is a proposal — not a bill. Don't just pay it.

The IRS thinks the income reported on your return doesn't match what third parties reported. Often the IRS is partly right and partly wrong. The response is where the money is won or lost.

30 days

Typical deadline

Tier 2

$595

15 min

Free triage call

Book a triage call All notice types

What it is

What a CP2000 actually means

A CP2000 is issued by the Automated Underreporter (AUR) unit when income reported to the IRS on forms like 1099, W-2, or K-1 doesn't match your return. It proposes additional tax, plus penalties and interest.

Critically, it is a proposed adjustment. The IRS frequently double-counts basis on securities sales, ignores reported cost, or misreads a rollover as a distribution. A careful reconciliation often reduces or eliminates the proposed balance.

Why you might have received one

A 1099-B reported gross proceeds without cost basis
A retirement rollover was coded as a taxable distribution
A K-1 or 1099 arrived after you filed
Income was reported under the wrong tax year

What's at stake

If you don't respond within 30 days, the IRS issues a CP3219A (Statutory Notice of Deficiency) and the proposed tax becomes assessable. After that your only route is Tax Court. Responding now is far cheaper than fighting later.

Common mistakes we see

Paying the proposed amount when basis or cost simply wasn't reported
Sending a letter without the substantiating documents the IRS needs
Agreeing to part and ignoring the rest — the response must address every line
Missing the 30-day deadline and triggering a 90-day letter

Transparent, flat-fee pricing

You'll know the cost before we start

No hourly surprises on routine notices. We confirm the tier on your free triage call and put the fee in writing.

Tier 1

$295 flat fee

Simple notices

CP501, CP14, balance-due reminders
Notice review & deadline confirmation
One drafted response letter
Filed on your behalf

Tier 2

$595 flat fee

Underreporter & matching

CP2000, CP2030, AUR notices
Line-by-line reconciliation
Substantiation package assembled
One free follow-up within 90 days

Tier 3

from $1,495 scoped quote

Urgent & high-stakes

CP3219A, CP504, Letter 226-J
Tax Court petition support
Penalty abatement requests
Direct IRS / DOR representation

Tier 4

$350 per hour

Examination & appeals

Full audit representation
Appeals conferences
Complex multi-year matters
Quoted in writing before work begins

Common questions

Before you call us back, read this

Does a CP2000 mean I'm being audited?

No. It's an automated matching notice, not an examination. But an unaddressed CP2000 can escalate, so it should be handled with the same care.

The IRS says I owe tax on a stock sale I already reported.

This is the single most common CP2000 error. The IRS often sees gross proceeds without your cost basis. We document the basis and the proposed tax usually drops sharply.

What's the difference between a CP2000 and a CP3219A?

A CP2000 is a proposal you can dispute by mail. A CP3219A is the formal 90-day deficiency notice that follows if the CP2000 isn't resolved — your last step before Tax Court.

What does the $595 fee cover?

Full reconciliation of the IRS figures against your records, a substantiation package, the drafted response, and one free follow-up if the IRS replies within 90 days.