[Date]
Internal Revenue Service
[Address at the top left of the CP2000, or fax number for that campus]
Re: Response to Notice CP2000 dated [Notice date]
Taxpayer(s): [Name(s) as shown on the notice]
Taxpayer identification number(s): [SSN(s)]
Tax year: [Year] Form 1040
Notice response due date: [Date on notice]
Daytime telephone for the representative: [Phone]
To whom it may concern:
I represent the taxpayer(s) under the enclosed Form 2848, which covers Form 1040 for [Year]. Please direct correspondence and calls on this notice to me and send copies of all notices to the taxpayer and to me. The completed response form is enclosed with the [agree / disagree / partially agree] box checked.
Position on each proposed change
The notice lists [N] information returns. The taxpayer’s position on each is below, in the order shown on the notice.
Item 1: [Payer name, form type, amount shown on notice, e.g. ABC Brokerage, Form 1099-B, $42,310 proceeds]. [Choose one:]
[Agree. The amount was omitted from the return.]
[Reported. The amount was included on [Form 1040 line / Schedule and line], which totals $[amount]; the breakdown of that total is: [components]. See Exhibit 1.]
[Reported under a different amount or form. The gross proceeds were reported on Form 8949 with basis of $[amount] (Exhibit 1, broker statement), so the taxable gain is $[amount], not the full proceeds.]
[Not the taxpayer's income. The payment belongs to [name and SSN of actual recipient] / the account is a nominee account for [name]; Form 1099 was issued in the taxpayer's number in error. A completed Form 2624, Consent for Third-Party Contact, for this payer is enclosed so you may verify with the payer.]
[Nontaxable. The distribution was rolled over within 60 days to [custodian] on [date] (Exhibit 1, Form 5498 and statements).]
Item 2: [Payer, form, amount]. [Position and exhibit]
[Repeat for each item on the notice.]
Offsetting items
[If an agreed item carries expenses, basis or withholding not reflected on the notice: The taxpayer incurred the following expenses in earning the Form 1099-NEC income in Item 1: [schedule of expenses, Exhibit 3]. Federal income tax withheld on the Item 2 distribution was $[amount] per the Form 1099-R and is not credited on the notice. Delete if none.]
Recomputation
[Agree in full: The taxpayer agrees to the proposed tax increase of $[amount] and the signed response form is enclosed. Payment of $[amount] is enclosed / was made online on [date] / the taxpayer requests an installment agreement on the enclosed Form 9465.]
[Partially agree: The taxpayer agrees that Items [list] were omitted and disagrees with Items [list]. Based on the explanations above, the corrected additional tax is $[amount], computed in Exhibit 4. The taxpayer asks that you issue a recomputed notice reflecting these changes.]
[Disagree in full: For the reasons above, no additional tax is due and the taxpayer asks that the return be accepted as filed.]
Accuracy-related penalty
[If a penalty is proposed and any amount is agreed: The taxpayer requests that the proposed accuracy-related penalty under IRC 6662 be waived for reasonable cause. [Explain the facts: e.g. the Form 1099 was issued to a prior address and never received; the omission was a single item against reported income of $[amount]; the taxpayer relied on the complete set of forms available at filing.] The taxpayer's signed statement is enclosed as Exhibit 5. If the penalty is not waived, please provide the written supervisory approval required by IRC 6751(b).]
Appeal rights
[Disagree only: The taxpayer does not waive the right to appeal any item not resolved by this response and requests that unresolved items be referred to the IRS Independent Office of Appeals. Delete this paragraph if agreeing in full; it makes the response a disagreed response.]
Each page of this response shows the taxpayer identification number and tax year. All documents are copies.
Sincerely,
[Representative name, credential]
[Firm, address, phone, fax, email]
CAF [CAF number]
Enclosures: CP2000 response form, signed by [both taxpayers / taxpayer]; Form 2848; Exhibits [1 through N]; [Form 2624 for each disputed payer]; [Form 9465, if requesting an installment agreement]; [Form 1040-X marked CP2000 at the top, only if other income, credits or expenses not on the notice must be reported]
What the examiner is looking for
The IRS CP2000 page says “This notice isn’t a bill and your response may be required.” The Automated Underreporter examiner who reads the response has a narrow brief. IRM 4.19.3.23: “Tax examiners analyzing a case worked in response phase will confine themselves to the issue(s) raised on the CP 2000/ CP 2501 Notice,” and “The taxpayer’s explanation will generally be taken at face value, including schedules of expense submitted by the taxpayer to offset unreported income.” So the letter reconciles each information return to a line on the filed return and supplies the offsetting items the notice could not know about. See CP2000 and CP2501.
Publication 5181 says how: “Be specific in identifying the line number or schedule of your tax return where you included all the amounts in question.”
Agreed, partially agreed, disagreed: the IRM definitions
| Response type | IRM 4.19.3 definition | What happens |
|---|---|---|
| Agreed | “An agreed response must contain no disputing comments” and is either fully paid before a statutory notice or carries the required signatures on the response form, Form 9465, Form 433-D, waiver, Form 1040-X or a statement showing year, tax increase and penalties (IRM 4.19.3.23.7) | Assessment; interest computed 30 days from the notice date |
| Partially agreed | Acceptable explanations for some of the amounts in question (IRM 4.19.3.23.8); a Form 1040-X can be a partially agreed response | Recomputed CP2000 for the remaining items, which still needs a signature or payment |
| Disagreed | The taxpayer disputes some part of the adjustment without an acceptable explanation, or “makes any comment that they don’t intend to waive their appeal rights, even if the Consent to Tax Increase on the CP 2000 or the Waiver on the Statutory Notice is signed” (IRM 4.19.3.23.11) | Phone contact where a number is given, Letter 2626-C or a CP 3219A |
Two details shape the template. First, “Comments concerning interest are not considered disputing, treat as an agreed response,” so an interest request does not cost an agreed closing (see the interest abatement template). Second, the appeal-rights paragraph converts an agreed response into a disagreed one, which is why the template marks it for deletion when the client agrees in full. And “Appeals doesn’t accept non-docketed cases when there are less than 365 days left on the statute.”
What each part does
Form 2848 and the authorization block. IRM 4.19.3.23.1.21: “SEND NO TAX INFORMATION TO, OR DISCUSS TAX INFORMATION WITH AN UNAUTHORIZED PERSON.” The response form’s authorization lets the examiner talk to a third party, but “Do not send copies of letters/notices to an authorized third-party.” Only a Form 2848 gets you the recomputed notice and the CP 3219A. Send it with the response: “A faxed Form 2848, Power of Attorney and Declaration of Representative, with no explanation isn’t considered correspondence for purposes of updating the AUR Received Date.”
Item-by-item positions. Each entry names the payer, form and amount as the notice shows them, then the line where it was reported or why it is not taxable. Where the income is someone else’s, the examiner needs the name and SSN of the recipient. Payer verification needs a form: “Payer contacts will only be made when the taxpayer returns a completed Form 2624, Consent for Third-Party Contact, for the disputed payer.”
Offsetting items. Expenses against omitted Form 1099-NEC income, basis against gross proceeds and uncredited withholding are corrections the notice cannot make on its own. A Form 1040-X is needed only for other income, credits or expenses not on the notice, marked “CP2000” and sent with the response form; Publication 5181 says “In most cases, there’s no need for you to file an amended tax return.”
Penalty paragraph. IRM 4.19.3.23.1.4: a “Waiver request MUST be in writing and signed by the taxpayer or valid POA.” A written challenge also triggers IRC 6751(b): the examiner must obtain managerial approval before continuing to assert the penalty. See the accuracy-related penalty and supervisory approval.
Signatures. On a joint return that is not fully paid, IRM 4.19.3.23.7 requires both signatures on the consent; a representative may sign only if the Form 2848 authorizes it.
Where to send it and what happens next
- Send to the address or fax number at the top left of the notice, or use the Document Upload Tool with the access code on the notice. The IRS page lists the campus fax numbers: Andover 877-477-9485, Atlanta 877-477-0967, Austin 877-477-0583, Holtsville 877-477-9599, Fresno 877-477-0962, Ogden 877-477-9640, Philadelphia 877-477-9602. Put the TIN and tax year on every page.
- If you need more time, ask before the due date by letter, fax or phone. IRM 4.19.3.23.9.3 has the examiner grant a CP2000 extension by Letter 2626-C but adds: “DO NOT grant a subsequent extension, unless extenuating circumstances apply.” No extension is possible once a CP 3219A issues.
- Possible outcomes: Letter 1802-C accepting the return as filed; a recomputed CP2000 for partially agreed cases (sign it or respond again); Letter 2626-C asking for more; or, if no agreement, a CP 3219A statutory notice with 90 days to petition (see Tax Court petitions).
- If the deficiency is assessed and proof turns up later, the AUR campus that issued the notice handles the reconsideration; see the audit reconsideration template.
Mistakes that turn a good response into a CP 3219A
- Reserving appeal rights on an otherwise agreed response, which makes it disagreed.
- Sending a Form 2848 by itself, which does not stop the clock.
- Disputing a payer’s figure without Form 2624, so the examiner cannot verify it.
- One spouse signing the consent on an unpaid joint deficiency; the IRM holds the case 45 days for the second signature, then issues the statutory notice to the non-agreeing spouse.
Questions practitioners ask
Is the payer's 1099 wrong, or the client's return?
Often the payer. Brokers report gross proceeds, retirement custodians report gross distributions, and corrected forms sometimes never reach the taxpayer. The reconciliation shows the examiner where the gross figure was reported net. If a payer client of yours issued a wrong form, the correction process is covered at 1099 corrections and why a 1099 caused a payee's CP2000.
The client agrees but cannot pay. What goes in the letter?
A signed response form plus a Form 9465 or a request for a payment plan is still an agreed response under IRM 4.19.3.23.7. The IRS page points to payment plans and offers in compromise; see installment agreements.
Should I ask for Appeals in the letter?
Only if the client disagrees and wants Appeals before a statutory notice. After a CP 3219A, a Tax Court petition is the route, and the IRM says the case usually goes to Appeals anyway.
What if the client never got the CP2000 and already has a CP 3219A?
Respond to the statutory notice with the same letter and calendar the 90-day petition date. The IRM says the IRS keeps working the issues during the 90 days but cannot extend them.