We have compiled helpful answers into two groups for you:

  1. Quick Q&As with brief answers.
  2. Questions that require more detailed answers, of which we linked to their own pages.

Quick FAQs

Can the IRS turn a CP2000 into an audit?

Yes, but this is rare. If the CP2000 involves complex interpretation of the facts or tax law, the IRS or the taxpayer can request that the CP2000 be transferred to IRS audit.

How far back can the IRS issue a CP2000?

The IRS can generally assess additional tax three years after the due date of the return or the date the return was filed, whichever is later.  In practice, the IRS last CP2000 for a tax year is issued in the following June (i.e. 2015 tax year due on 4/15/2016 will see the final CP2000s issued in June, 2017).

What happens if I ignore the CP2000 notice?

Simple, the IRS will assess the additional tax, penalties, and interest and then proceed to enforce payment.  Ignoring a CP2000 is never a good idea.

Do I have to pay the CP2000 notice immediately if it is right?

No, you can request a payment plan with the CP2000 response.  Also, you can request any of the collection alternatives after the tax is assessed

How do I request CP2000 reconsideration?

CP2000 reconsideration requires that you contact the Automated Underreporter Unit that sent your original CP2000 notice and assessment.  You can respond with your original CP2000 response, requesting that they correct the assessment.  It takes 4-6 months for CP2000 reconsideration – so taxpayers should request a hold on their account until the CP2000 reconsideration is complete and the corrected tax is assessed.   This will help avoid any IRS collection activity on the original erroneous assessment.

What happens if I miss the CP2000 response deadline?

You can request that the IRS reconsider the CP2000 assessment.  This is fairly common and involves preparing one complete response and sending it to the IRS for reconsideration.  Taxpayers should contact the IRS before sending to make sure that they are responding to the correct IRS Automated Underreporter Unit location (there are 7 locations).

Can I respond to the CP2000 by fax?

Yes, and that is the preferred method if you are close to the 30-day response deadline.  Be sure to number your pages so the tax examiner will know if they are looking at your complete response.

How do I ask the IRS to remove the penalty on the CP2000 notice?

In your CP2000 response, you will need to contest the penalty by providing the facts and reasonable cause argument that states why the penalty should not be assessed.

I received a CP2501 notice.  Is this the same as a CP2000?

The CP2501 is a notice that the IRS sends to request that the taxpayer explain a discrepancy on the return.  If the taxpayer does not respond, the IRS will issue a CP2000 response.  The IRS uses the CP2501 to notify taxpayers of larger discrepancies ($100,000 or more), missing K-1 reporting of $50,000 or more, and cases that may result in a possible refund.  The CP2501 also provides additional time to resolve the issue before the issuance of the CP2000 notice.

How will I know that the CP2000 investigation is over and the IRS agrees with my response?

If you agree the IRS will assess the tax and you will receive IRS notice CP22. If you believe your return was filed accurately and provided information to prove its accuracy, the IRS will issue a no-change letter (CP2005).

Can I just file an amended return (Form 1040X) to correct the error?

Yes, but it may confuse the IRS.  Forms 1040X can be routed to the IRS’ accounts management unit- not to the IRS Automated Underreporter Unit (CP2000 unit).  This confusion may lead to a delay in resolving the CP2000 or may even result in multiple assessments or premature assessments on the taxpayer’s account due to the delay in associating the 1040X as a CP2000 response.

Expanded FAQs

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