CP2000 Notice Help

CP2000 Notice — The IRS Says Your Income Doesn’t Match Their Records

A CP2000 notice isn’t a bill — it’s a proposal. The IRS has information from third parties (employers, banks, brokerages, etc.) that doesn’t match what was reported on your tax return, and they’re proposing an adjustment. You have the right to agree, disagree, or provide additional information. At HofflerSmith Financial Services, we help taxpayers in South Jersey respond to CP2000 notices correctly and avoid overpaying.

Why You May Have Received a CP2000

• Unreported income — A 1099 wasn’t included on your return (freelance income, investment sales, retirement distributions, etc.).
• Mismatched amounts — The income you reported doesn’t exactly match what the payer reported to the IRS — even a small discrepancy can trigger a CP2000.
• Missing deductions or credits — In some cases, the IRS may have inadvertently missed a deduction or credit that offsets the proposed change.
• Data entry errors — Transposed numbers or incorrect figures can cause a mismatch that looks like underreported income.

Your Options When Responding to a CP2000

• Agree with the proposed changes — If the IRS is correct, you can accept the proposed adjustment and pay any additional tax, interest, and penalties owed. We can also help negotiate penalty abatement in appropriate cases.
• Partially agree — You can accept some changes and dispute others. We prepare a partial agreement response with documentation supporting your position.
• Disagree entirely — If the IRS is wrong, we prepare a formal written response with supporting documentation — 1099s, brokerage statements, receipts — to show why the proposed change is incorrect.
• Request more time — If you need additional time to gather records, we can request a 60-day extension of the response deadline.

Don’t Just Pay It — Let Us Review It First

Many taxpayers who receive a CP2000 simply pay the proposed amount without realizing they have grounds to dispute it or reduce it. Common issues include: basis not being reported on investment sales (making the gain appear larger than it is), deductible expenses that offset the additional income, and outright IRS errors. We review every CP2000 against your actual records before recommending a response.