CP2000 Notice: A CP2000 Notice is a notice sent by the Internal Revenue Service (IRS) to a taxpayer when there is a discrepancy between the income and payment information reported on the taxpayer’s tax return and the information reported to the IRS by third parties, such as employers and financial institutions.
The notice serves as a proposal for adjustments to the taxpayer’s income tax return, indicating that the IRS believes the taxpayer owes additional taxes due to unreported income or incorrect deductions. It outlines the proposed changes, the reasons for those changes, and provides instructions for responding to the notice, including the option to agree with the proposed changes, provide additional information, or dispute the IRS’s findings.
For example, if a taxpayer reported $50,000 in income but the IRS received information from an employer indicating $60,000 was earned, the CP2000 Notice would highlight this discrepancy and propose an adjustment to reflect the additional income.
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