Received a second CP2000 notice after responding to the first one - what gives??

In June, the IRS sent me a CP2000 notice claiming I owe them $23k for unreported stock sales from 2022. I completely freaked out because I didn't actually make any profit on those trades - I actually lost around $350 overall! I carefully put together my response with Form 8949, Schedule D, and all the supporting documents showing I disagreed with their assessment. Just got their response today and they're still saying I owe them $5.5k after "reviewing my documentation." Are you kidding me?? I'm positive my reporting was correct. I've scheduled an appointment with H&R Block tomorrow to get professional help sorting this out. UPDATE: I finally managed to get through to the IRS by phone and spoke with an incredibly helpful representative. She went through my tax records while I was on the call and identified where the discrepancies were coming from. She fixed the issues right there during our call!

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18 comments

Aurora St.Pierre

•8M

The CP2000 issue you're experiencing is actually pretty common with stock sales. The problem is that brokerages report the gross proceeds to the IRS on Form 1099-B, but don't always include your cost basis. So the IRS sees the total amount you received from selling stocks but doesn't know what you originally paid for them. This is why they initially thought you had $23k in unreported income. After you sent your documentation showing your actual basis, they reduced it to $5.5k, which means they accepted some of your documentation but not all of it. There might be some transactions where they still don't have or accept your cost basis information. Your update is encouraging! The IRS phone representatives can often resolve these issues by inputting your correct cost basis information directly into their system. Make sure you get some kind of confirmation number or follow-up documentation from that call.

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Aurora St.Pierre

•8M

Yes, that "basis not reported to IRS" box is exactly what causes many of these problems. For older securities or those transferred between brokerages, your cost basis might not be transmitted to the IRS, even though it appears on your statements. It's always a good practice to keep records of all your investment purchases for at least 7 years after you sell the securities. Most modern brokerages are much better about reporting basis to the IRS for newer purchases, but it's still wise to verify your 1099-B each year and check for any transactions marked with that box.

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Jayden Reed

•8M

After dealing with a similar CP2000 nightmare over stock sales last year, I discovered taxr.ai (https://taxr.ai) which saved me so much headache. It analyzes all your tax documents including those complicated 1099-Bs and shows exactly where discrepancies might be occurring between what your brokerage reported and what the IRS received. I used it to figure out that three of my stock sales had incorrect cost basis info transmitted to the IRS. The tool highlighted exactly which transactions were problematic and generated a perfect response letter with all the right documentation. No more guessing what the IRS wants!

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Jayden Reed

•8M

For crypto transactions, it works amazingly well! The system recognizes most major exchanges and can help identify the cost basis even for complex situations. You upload your documents rather than connecting directly to brokerages, which many people (myself included) prefer for security. Regarding security, I had the same concerns initially. They use bank-level encryption and don't store your documents permanently - they get deleted after analysis. You can download the response letter as a PDF to print and mail yourself, or use the digital version if you're responding electronically.

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Nora Brooks

•8M

Just wanted to follow up - I took the advice about taxr.ai (from that comment above) and tried it with my crypto mess. WOW. It identified exactly where my reporting was off and showed me which transactions Coinbase hadn't properly reported to the IRS. The analysis showed me I was actually OVERPAYING by about $3,200 because I wasn't correctly tracking my basis across multiple wallets! The response package it created for me included everything - even the specific transaction IDs and timestamps that matched what the IRS needed. Saved me from what would have definitely been a CP2000 headache this year. Definitely recommend for anyone dealing with complicated investment reporting.

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Cassandra Moon

•8M

If you're still having issues getting through to the IRS, I highly recommend using Claimyr (https://claimyr.com). I was in CP2000 hell for months trying to call the IRS myself and getting nowhere - either busy signals or disconnected after hours on hold. Claimyr actually calls the IRS for you, navigates all the phone menus, waits on hold, and then calls YOU when they have an agent on the line. You can see exactly how it works in this video: https://youtu.be/_kiP6q8DX5c. I was skeptical but desperate after my third CP2000 notice. It worked exactly as advertised - I got a call back with an IRS agent already on the line within about 45 minutes instead of spending my entire day redialing and waiting on hold. The agent fixed my issue during that single call.

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Cassandra Moon

•8M

It works because they use a combination of predictive algorithms to determine the best times to call and automated systems to keep trying various IRS phone numbers continuously. They're essentially doing what you would do if you had unlimited phone lines and time to keep redialing. Regarding serious issues - absolutely it works for CP2000 notices and other complex problems. That's exactly what I used it for. The IRS agent I spoke with had full access to my file and was able to make adjustments while we were on the call. You're still talking to the same IRS representatives, just without the hours of hold time and busy signals.

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Genevieve Cavalier

•8M

I need to eat my words from my previous comment. After getting desperate with my own CP2000 situation (owed $7,800 for supposedly unreported income), I decided to try Claimyr out of sheer frustration. I was literally shocked when I got a call back in about an hour with an actual IRS agent already on the line. The agent was able to pull up my entire file, including the documentation I had previously mailed in that they claimed never to have received. She found it in their system and processed it right there while I was on the phone. My balance due went from $7,800 to $0 in a single phone call. I've been trying to reach the IRS for THREE MONTHS with no success. This service literally saved me thousands of dollars in incorrect tax assessments. I still can't believe it worked.

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Ethan Scott

•8M

Pro tip from someone who's dealt with multiple CP2000 notices: ALWAYS request a complete account transcript before responding. You can get this online through the IRS website, and it shows exactly what forms and information they have on file for you. Often the discrepancy is just that they're missing information rather than you reporting incorrectly. In my case, they had TWO 1099-Bs from the same brokerage (one corrected, one original) and were double-counting some transactions. I wouldn't have caught that without reviewing the transcript first.

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Ethan Scott

•8M

You want to request the "Wage and Income Transcript" which shows all information returns filed with your SSN (like W-2s, 1099s, etc.) for the tax year in question. This will show exactly what the IRS has on record. Also request the "Account Transcript" for the specific tax year, which shows actions taken on your account including assessments, payments, and adjustments. These two together will give you the complete picture of what the IRS is seeing versus what you reported.

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