Guide
The CP2000 says the IRS's computers found income your return didn't show. It is a proposal — nothing is assessed yet — and the response form gives you three doors. Pick by what the documents say, not by what you hope.
Before choosing a door, line up the year's actual paperwork: every W-2 and 1099, brokerage statements with cost basis, and your filed return. A large share of CP2000s are partly right — a forgotten 1099 — and partly wrong: the same income counted twice, or stock sold where the IRS assumed your cost was zero.
Sign the response form, pay if you can (a plan exists for under-$10,000 balances with guaranteed acceptance — see the payment-plan page), and keep the signed copy and proof of mailing. Done: the assessment that follows matches the notice, and filing nothing further is correct.
Mark the items you accept and the ones you don't, with a document per contested item: the corrected 1099, the basis statement, the closing disclosure. The IRS recalculates; a revised notice follows. Nothing about partial agreement weakens the parts you contested.
Explain item by item, in writing, with documents attached — 'this income was reported on Schedule C, line X' beats 'this is wrong.' If the examiner holds firm, the case can go to Appeals, and after that the 90-day letter (CP3219A) opens Tax Court. Each step is in writing and each step has a clock.
The free decoder tells you what the letter means and when it is due. The Kit is the doing: response letters for every notice family, the penalty-relief scripts, the payment-plan and Offer in Compromise reality checks, and the proof habits that keep a sent letter from becoming a lost argument.
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Because the notice computes tax, interest, and often a 20% accuracy penalty on the whole adjustment, sometimes with zero cost basis assumed. Correcting the inputs usually shrinks all three at once.
Then agree, and look at the penalty line: a clean prior record plus a simple explanation sometimes removes the accuracy penalty, and a failure-to-pay penalty can qualify for first-time relief. Agreeing to the tax never requires agreeing to every penalty.