Proposed changes from information-return matching

CP2000 · CP2501

What it is

The Automated Underreporter program matched the W-2s, 1099s, 1098s and K-1s on file against the return and found a difference. A CP2501 is the preliminary inquiry; a CP2000 proposes a specific change to tax, with penalty and interest computed. Neither is a bill and neither is an examination. The proposed figures are often wrong in part because the matching ignores basis, offsets and items reported elsewhere on the return.

The clock it starts

Respond by the response date printed on the notice, generally 30 days from the notice date (60 days from outside the United States). With no response the IRS issues a statutory notice of deficiency.

What a response has to establish

Item by item: agree, agree in part, or disagree, with the corrected computation and the documents that show why the matched amount is not additional income. A separate amended return for the items on the notice is not needed while the case is open; the response resolves them.

Authority

• IRC §6201
• IRC §6212
• IRC §6213
• IRM 4.19.3

For tax professionals. The date printed on the notice controls. CitedTax is a research and drafting tool; the reviewing professional validates every item before reliance.