CP2000 series A to E (payee side): Proposed changes to a payee's return built from payer information returns

What CP2000 series A to E (payee side) is

Proposes tax, interest and penalties when the information returns filed under the payee's SSN exceed what the return shows. The notice carries only the discrepant element of each return, with the payer's name and address as filed (IRM 4.19.3.5(22); 4.19.3.4.4). It comes in a series lettered A to E as it is recomputed, and PARAGRAPH 85 warns of 24 percent backup withholding when unreported interest, dividends and patronage dividends exceed $500 (IRM 4.19.3.21.2(2); 4.19.3.8.3.6(3), Oct. 10, 2025).

The deadline

Due 30 days from the notice date; one 30-day extension by phone; a written request gets Letter 2626-C and "DO NOT grant a subsequent extension, unless extenuating circumstances apply" (IRM 4.19.3.23.2.5(10)-(12); 4.19.3.23.9.3).

What to do

For a payer: the IRS will not send the payee a copy of an electronically filed return and tells them to "contact the payers in this notice" (Exhibit 4.19.3-7, PARAGRAPH 180). Verify your return; a matching correction deletes the original, a non-matching one is added to it. The guide explains why a correct return can still produce the notice.

The CP2000 and its lettered series

The CP2000 proposes changes to an individual return based on information returns the IRS received from third parties: W-2s, 1099s, 1098s, 5498s and the rest. It shows each item the IRS has that the return does not, computes the additional tax, interest and any accuracy penalty, and asks the taxpayer to agree or explain within 30 days. When the taxpayer responds and the IRS recomputes, the revised notice carries the next letter in the series, so a CP2000 B or C is a second or third version of the same case, not a new one. A payee whose notice carries a late letter has been going back and forth with the unit for months. Two features of the notice matter to payers. It shows only the discrepant element of each return, so a payee may see a payer's name next to one figure without recognizing the document. And it names the payer as filed, which for a payer that files under a parent entity or a payment platform can be a name the payee has never heard.

A CP2000 that includes unreported interest, dividends or patronage dividends over $500 also carries a warning that the payee may be placed under backup withholding, which is how the C-program begins.

The payer's part

The IRS will not send the payee a copy of an electronically filed information return; the notice tells them to contact the payer. Expect the call, and answer in writing within a few days. Verify the return against the W-9, the payment records and the account number. If it is correct, send a copy and an explanation of the reporting rule that produced the figure (gross proceeds on a 1099-K, the full distribution on a 1099-R before a rollover, cancelled debt on a 1099-C); the payee letter of explanation covers the common cases. If it is wrong, file the correction and give the payee a copy. A correction that matches the original on payee TIN, account number and form type replaces it in the IRS's file; one that does not is treated as an additional return, which is the single most common way a payer trying to help makes a CP2000 worse. The correct-1099 guide and the payee CP2000 guide cover both sides.

Questions about CP2000 series A to E (payee side)

Have a different notice? The IRS notice decoder lists all 77 in the order they tend to arrive.