- What it means
- Business return figures do not match information returns filed
- Respond within
- The date printed on the notice
- When to get help
- If the proposed tax is more than you can pay, if it involves a property sale, or if you cannot reconcile the items, get help before you respond. The response date is not flexible without a call.
The first move
Read the proposal line by line before you agree to anything. Do not file an amended return; the notice process handles the change.
What letters in this family have in common
Every W-2, 1099, 1098, and K-1 you receive is also sent to the IRS. About a year after you file, the IRS matches them. A mismatch produces a CP2501 (a request for explanation) or a CP2000 (a proposed change with the tax computed). Businesses get CP2030 and letters in the 2531 series.
The mismatch is often real: a 1099 for a side job you forgot, interest from an account you closed. It is also often not what it looks like. Stock sale proceeds show up as pure income because the IRS cannot see your basis. A 1099 issued under the wrong year or duplicated by a payer shows up as unreported. Retirement rollovers show up as distributions.
Agreeing means signing the response and paying. Disagreeing means a short letter and documents for each item, sent by the date on the notice. Ignoring it means a statutory notice of deficiency and a 90-day Tax Court clock.
What to gather
- The notice, including the item-by-item list of what the IRS thinks is missing
- Your return for that year with all schedules
- Every 1099, W-2, 1098, and K-1 for that year
- Brokerage statements showing cost basis for any stock sales listed
- Rollover or conversion confirmations for any retirement distributions listed
- Proof of any item the IRS lists that was reported elsewhere on your return
How to write back
- CP2000 response letter: Explains a mismatch between what a third party reported and what you filed, agreeing in part or disagreeing with documents attached.
Closest built pages
- CP2000: Proposed changes to your return
- CP2501: Income on your return does not match what was reported
- CP2057: You may need to amend your return
- CP2005: CP2000 case closed, no change
- CP2006: CP2000 response received
Before you send anything
This is general information, not tax advice. Situations differ. Check with your tax advisor before you send anything. Nothing on this page creates a client relationship.