Urgent help needed! Got CP2000 letter from IRS claiming I owe $30,000+ but I've never made that much money in my life

This is actually a common issue with cryptocurrency and stock trading. The CP2000 notice is generated when the IRS received information about your trading activity from Robinhood but didn't see it reported on your tax return. What's likely happening is the IRS is treating every SALE as pure profit without accounting for what you originally paid for the investments (your cost basis). So if you bought $10,000 worth of stocks and sold them for $9,839 (resulting in your $161 loss), the IRS might be treating the entire $9,839 as taxable income. You definitely need to respond to this notice. First, gather all your Robinhood statements showing your transactions, especially the 1099-B form which should show both proceeds and cost basis. Then fill out the response form that came with your CP2000, clearly explaining the situation and attach your documentation. Yes, your Form 8949 showing the loss would be crucial evidence, along with Schedule D if you have it. If you don't have these forms completed yet, you may need to prepare them now.

I went through something similar last year with my crypto trading. The IRS thought I made $45k when I actually lost money overall. I found this service called taxr.ai (https://taxr.ai) that saved me so much stress. They have AI that specifically analyzes CP2000 notices and trading documents. I just uploaded my CP2000 letter and my Robinhood 1099, and they generated a complete response package with all the forms I needed to send back to the IRS. They even explained exactly what the IRS misunderstood about my trading activity and provided a letter explaining everything in IRS language. The best part was they showed me where Robinhood hadn't properly reported my cost basis for some trades, which was causing the whole mess. Might be worth checking out since you're in a similar situation.

Just wanted to update that I tried taxr.ai after reading about it here. My situation was almost identical - got a CP2000 saying I owed $22k from Robinhood trades when I actually lost around $300 that year. The service was super helpful! They analyzed my 1099-B and found that for several trades, Robinhood hadn't reported my cost basis to the IRS. That's why the IRS was treating those sales as 100% profit. The AI generated a perfect response letter explaining this, along with a correctly filled out 8949 form showing my true losses. Submitted everything last month and just got confirmation that my case is resolved - I owe ZERO instead of $22k! Seriously recommend this to anyone dealing with CP2000 notices for trading activity.

Have you tried calling the IRS directly about this? I know their phone lines are impossible, but I used Claimyr (https://claimyr.com) to get through when I had a similar issue. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I was getting disconnected for weeks trying to reach someone about a CP2000 notice that was completely wrong. Claimyr got me connected to an IRS agent in about 20 minutes. The agent was actually super helpful and put notes in my file about the documentation I was planning to send. She even gave me specific advice on what forms to include with my response. Sometimes talking to a human at the IRS can save you weeks of back-and-forth by mail. They can also extend your response deadline if you explain the situation.

I have to admit I was totally wrong about Claimyr being a scam. After getting desperate with my own CP2000 situation, I tried it yesterday. Not only did it work exactly as described, but it saved me from what could have been a $12,000 mistake. Got connected to an IRS agent in about 35 minutes (which is nothing compared to the dozens of failed calls I made on my own). The agent reviewed my case details and discovered the notice was generated because my employer had submitted a corrected W-2 that I never received. She walked me through exactly what documentation I needed to send and even placed a hold on collections while my response is being processed. I was seriously stressing for weeks and one phone call resolved most of my anxiety. So yeah, I was 100% wrong in my skepticism. Sometimes new solutions really do work.

Someone correct me if I'm wrong, but if you received a CP2000 and you know you didn't file for that year, wouldn't you need to file a complete tax return for that year first before responding to the CP2000? The IRS is saying "hey we have info showing you made this money" but you need to properly report all income and transactions for that year, not just send the 8949 by itself. I think you need to file the original return that was missing, which would include 8949 + Schedule D + 1040, etc.

Don't panic! I work with these issues often. The key thing to understand is that the CP2000 is NOT a bill - it's a proposed adjustment based on information they received from third parties (in this case, Robinhood). Since you said you didn't file those transactions that year, what the IRS is seeing is income reported by Robinhood without any corresponding reporting of that income on your return. They don't have your cost basis information, so they're assuming your proceeds were all profit. First step is definitely to gather all your documents. Then you have two options: 1. File an amended return for that year including the Form 8949 and Schedule D 2. Respond directly to the CP2000 with a detailed explanation and documentation Either way, you'll need to show them your cost basis for each transaction. If it's just a few transactions, option 2 might be easier. If it was many trades, you probably need to file an amended return.