Glossary

IRS Notice CP2000: Underreported Income

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IRS Notice CP2000 is sent to taxpayers when the income reported on their tax return does not match the income reported to the IRS by third parties, such as employers, banks, or other entities that issue W-2s, 1099s, or similar forms. The notice outlines the discrepancies and proposes an adjustment to the taxpayer’s tax liability.

Taxpayers have 30 days to respond to CP2000, and they can:

Agree with the IRS’s findings and pay the additional tax owed.
Disagree with the proposed changes and provide documentation to support their original return.

If no response is received or if the taxpayer does not provide adequate documentation, the IRS will assess the additional tax, and penalties and interest may apply. Responding to CP2000 promptly is essential to avoid further complications or enforcement actions.

Recommendation

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