CP2000: Proposed changes to a payee's return from unreported income

What CP2000 is

Sent to an individual when the income on information returns filed under their TIN exceeds what they reported. A payer sees it when the payee calls: the 1099 was filed twice, overstated, or keyed to the wrong SSN. The IRS help-desk script tells the payer to file a corrected return and give the payee a letter of explanation to attach to the CP2000 response; multi-payee problems are escalated to Information Filing Support (IRM 21.3.11.6.1, now IRM 3.42.7 effective Oct. 1, 2026; IRM 3.42.9.14.1).

The deadline

The payee has about 30 days from the notice date to respond; the payer's correction will not post in time, so the payee responds with the payer's letter and corrected form attached.

What to do

File the Type 1 or Type 2 correction now, send the payee the letter of explanation with the corrected form, and for 50 or more affected payees call TSO so the IRS can flag the returns on its side.

How a payer causes a CP2000

The IRS matches every information return filed under an individual's SSN against that individual's income tax return and writes to the taxpayer about the difference. When the payer's return is right, the notice is the payee's problem to explain. When the payer's return is wrong, the payer caused it, and there are three usual ways: the same payments were reported twice (an original and a correction that did not match it, or two systems each filing), the amount was overstated (a refunded payment counted, gross instead of net on a form that calls for net, a wrong year), or the return was keyed to the wrong SSN so that a stranger received a notice for income they never had. The IRS does not contact the payer about any of these on its own. The payee calls, usually with the notice in hand and the 30-day response window running, and asks what you filed and why.

The payer's fix, and the timing problem

The correction and the payee's response run on different clocks. A corrected 1099 filed today will not post to the IRS's matching file for weeks, well after the payee's 30 days, so the payee cannot wait for it. File the correction anyway (a Type 1 correction for a wrong amount or a return that should not exist, a Type 2 for a wrong TIN or name, which takes two steps), and at the same time give the payee a signed letter on your letterhead stating what was filed, what was wrong, what the correction says, and that it has been submitted, with a copy of the corrected form; the payee attaches both to the CP2000 response and the IRS accepts them as the payer's verification. The payee letter of explanation is written for this. If a systems error affected many payees (fifty or more is the IRS's rule of thumb), call the information returns help desk as well so the IRS can flag the batch on its side before more notices issue. A return keyed to the wrong SSN has two victims: the person who got the notice and the real payee whose income is now unreported, and the corrections page covers the two-step fix. The payee CP2000 guide covers the exchange from both sides.

Questions about CP2000

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