CP2000 reconsideration is a claim for a credit or refund not previously reported or allowed, or a request for abatement of tax, penalty, and/or associated interest. An underreported condition exists when there is income reported to the IRS by payors that was not reported by the taxpayer on Form 1040, Form 1040A, Form 1040EZ, or Form 1040NR. Proposed tax adjustments are based on these underreported amounts, as well as on reported income amounts for which the taxpayer failed to include the required additional taxes.
More from H&R Block
If you missed the 30-day deadline to appeal the proposed tax increase on your CP2000, you can request CP2000 reconsideration. You must submit a written request that includes documents that show that the tax increase proposed on the CP2000 is incorrect. Once the IRS processes the documents you submitted, you will receive another notice that shows the new adjustments to your tax return. This notice may include a new proposal of additional taxes, penalties and interest, it may show that no additional taxes are due, or it may show that a refund is due to you.
Example 1: You did not report on your tax return one or more Forms 1099-B from the sale of stock. The CP2000 shows that you owe taxes on the sale. You will need to provide the IRS with proof of your basis (what you paid for the stock and any sales fees) in the stock. This will reduce the amount of income the IRS proposed and may actually show a loss if you paid more for the stock than you sold it for.
Example 2: You did not report on your tax return a Form 1099-MISC from work you performed on a contract basis. You can provide the IRS with documents that show you had expenses related to that work that reduce your actual income.
Get help from an expert
Your local H&R Block tax pro can look into your issue and deal with the IRS for you.
Learn how the IRS matches your information to generate CP2000 notices, and how to handle one of these underreporter inquiries if the IRS contacts you.
Here are the five things you need to know to respond to the IRS when you get an incorrect CP2000 notice, including how and when to respond.
If you need more time to respond to an IRS CP2000 notice, ask the IRS to extend the notice deadline. Learn exactly what to do to get more time from the IRS.
Need copies of your old Forms W-2 or 1099? Learn about the four different ways to obtain IRS wage and income transcripts from the tax experts at H&R Block.
The Statutory Notice of Deficiency is part of a series of notices sent by the IRS to propose additional tax, penalties and interest. Learn more from the tax experts at H&R Block.