How to Resolve an IRS CP2000 Notice (Proposed Assessment)

Receiving an IRS CP2000 Notice can be terrifying, often showing a massive proposed tax balance. The first thing you need to know is that a CP2000 is not an audit. It is simply an Automated Underreporter (AUR) inquiry generated by a computer.

Why Did I Receive a CP2000?

The IRS computer system automatically cross-references the income you reported on your Form 1040 against the documents submitted by third parties (like W-2s from employers, 1099-NECs from clients, or 1099-Bs from brokerages). When the computer detects a mismatch—meaning a third party said they paid you money that you did not report—it automatically generates a CP2000 notice proposing additional taxes and interest.

How to Respond Within the 30-Day Window

The notice provides a strict 30-day window to respond. Ignoring it will cause the proposed assessment to become a final, legally binding tax debt.

• If the IRS is Correct: You can sign the agreement form and pay the balance, or request an installment agreement.
• If the IRS is Wrong: Do not sign the agreement. Submit a written dispute checking the "I do not agree" box. Include proof—such as a corrected 1099 from the issuer, a cost-basis statement showing you didn't actually profit on a stock trade, or proof that the income belonged to a spouse.