The Internal Revenue Service (IRS) uses its Automated Underreporter (AUR) Program to compare information reported on tax returns with data submitted by vendors, employers, and financial entities. When information does not match, the AUR may flag a discrepancy that results in a CP2000 Notice.
What is a CP2000 notice?
As we mentioned earlier, the AUR is a critical piece of tech used for compliance purposes by the IRS. In fiscal year 2025, the AUR closed 987,460 cases, resulting in $5.9 billion in additional assessments. By comparing taxpayer-reported information with data reported to the IRS by third parties, the AUR can quickly identify potential discrepancies.
When the AUR identifies a potential discrepancy, a tax examiner further reviews the return and compares the information reported by third parties with the income, credits and deductions reported on the tax return. If a discrepancy remains, the IRS may issue a CP2000 notice explaining the difference and proposing changes to your return.
What information does the notice provide?
A CP2000 identifies the taxpayer, taxpayer identification number (TIN), and the type of document upon which a discrepancy appears to be based. The notice shows the amounts you reported to the IRS and the amount that a vendor or payer reported. The form also proposes corrections to the income, payments, or tax credits.
In addition, the notice provides a response form, a phone number to call, a return envelope, and a list of acceptable payment methods. After you review the notice, check your records and decide whether you agree with the proposed changes. You may agree or disagree with the proposed adjustments.
What to do next
What you do next depends on whether you agree with the proposed changes:
- If you agree: Complete the response form and submit it using one of the methods listed on the notice. If you owe additional tax, review your payment options.
- If you disagree: Complete the response form, include a signed statement explaining why you disagree, and provide documents that support your position.
- Pay attention to the deadline: Taxpayers generally have 30 days from the date of the notice to respond (60 days for taxpayers living outside the United States).
- Do not ignore the notice: If you do not respond by the deadline, the IRS may send a Statutory Notice of Deficiency explaining the proposed changes and your right to challenge them in U.S. Tax Court. If additional tax is ultimately assessed and remains unpaid, IRS collection action may follow.
For additional background on what can happen when unpaid taxes move into the collection process, see our guide, Understanding IRS Wage Garnishments.
If the discrepancy involves a significant amount of income or raises concerns about potential civil or criminal tax exposure, consider speaking with an experienced tax attorney before responding.
Questions about a CP2000 Notice?
If you received a CP2000 notice and are concerned about the discrepancy or its potential consequences, speak with an experienced tax attorney about your situation. Call us at 440-250-9709 or schedule a consultation. Robert J. Fedor, Esq., L.L.C. serves domestic and international clients from offices in Cleveland and Chicago.
