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What is a CP2000 Notice? A Simple Guide to Understanding IRS Underreporting Letters

Receiving a letter from the IRS can be nerve-wracking, especially if it’s a CP2000 notice. But don’t worry! This guide explains what a CP2000 notice is and what steps you should take to resolve it easily.

CP2000 Notice

What is a CP2000 Notice? A CP2000 notice is a letter from the IRS indicating a mismatch between the income you reported on your tax return and the income reported to the IRS by third parties, such as employers or banks. It’s not a bill—it’s a proposed adjustment.

Why Did You Receive a CP2000 Notice? Common reasons include:

  • Missing a W-2 or 1099 form.

  • Reporting incorrect income amounts.

  • Failing to report stock sales or other investments.

Steps to Take If You Receive a CP2000 Notice

  1. Don’t Panic: This is a common issue and can often be resolved quickly.

  2. Review the Notice Carefully: Compare the information in the notice to your tax records.

  3. Gather Documentation: Find any forms or receipts that support your original tax return.

  4. Respond by the Deadline: Use the response form provided with the notice and follow the instructions.

  5. Seek Professional Help: If you’re unsure, a tax professional can guide you.

How Arc&Ledger Can Help Our team specializes in handling CP2000 notices. We’ll help you review your notice, respond appropriately, and resolve the issue with the IRS. Contact us today for assistance.

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