Put the notice beside your return and transaction records
Find the response date printed on your CP2000 and write it at the top of a blank page. That date is the one that governs: the IRS CP2000 page specifies no universal number of days, so the date listed on your own notice controls (current figure at the IRS). The amount in the notice is a proposed change, not a bill.
Now put three things next to each other: the notice, the return you filed for that tax year, and whatever transaction records you have for the trades the notice names. The proposal usually comes from a broker figure that did not match what your return reported.
Most crypto disagreements we see described in published IRS guidance and reader mail come down to proceeds matching while basis does not, which produces a proposed gain far larger than the one you calculated.
A blank basis box on a broker form is not proof that your basis was zero.
Per IRS digital asset guidance, you calculate gain or loss using the asset's actual basis, generally your dollar cost, and you substantiate that basis with records when you answer the proposed adjustment.
That single distinction is often the whole dispute.
| Item to compare | Notice or broker figure | Filed return / source record | What to explain |
|---|---|---|---|
| Tax year and transaction identity | Year and asset/date shown on the notice | Same year's Form 8949 line, same asset and disposal date | Whether the notice and your return describe the same sale or two different ones |
| Sale proceeds | Gross proceeds reported by the issuer | Proceeds column on your filed schedule; exchange statement | Any difference in the amount received for that disposal |
| Purchase basis | Basis box, often blank or partial | Your acquisition record: buy confirmation, transfer-in history, wallet record | The actual dollar cost you paid and the record that shows it |
| Resulting proposed change | Proposed tax increase on the notice | Gain or loss you reported for the same disposal | Which of the two inputs above accounts for the gap |
Fill that table in ink before you decide anything. If a row has no source record yet, leave it blank and label it; an empty row is information, and it changes which response you can support.
Choose your response: agree, partly agree, or disagree
Three states exist, and the response form attached to your notice asks you to indicate agreement or disagreement with the proposed changes.
Partial agreement is an editorial way of describing what you do when some rows in the comparison hold up and others do not: you say what you accept, say what you dispute, and attach evidence for the disputed part.
| Your conclusion | When it fits | What goes with the response | What you are asking the IRS to review |
|---|---|---|---|
| I agree with every proposed change | Each row in your comparison matches the notice, including basis, and your return simply missed the disposal | The signed response form per its instructions, plus payment or payment arrangement information if applicable | Nothing further to weigh; you are accepting the proposed figures |
| I agree with some changes | One disposal is correctly proposed, another shows basis you can document, or one transaction is not yours | Response form, a line-specific written explanation, and copies of records for the disputed lines only | The specific lines you dispute, with the records behind each |
| I disagree with the proposed changes | Your basis records account for the difference, or the notice describes transactions your return already reported | Response form indicating disagreement, a written explanation per disputed item, and copies of supporting records | Recalculation of the proposed adjustment against the records you supplied |
A note on what happens when the records are not there.
Missing purchase evidence does not convert your position into agreement; it means the disputed line needs more preparation work before you can support it, and that work belongs to you rather than to the notice.
Two decision traps come up often enough to name. The first is signing the agreement box because the number looks official and the letter looks final. The second is treating a tax-software gain report as proof of a disputed figure, when the report is an output of whatever basis was loaded into it.
Decision tree
- Did you complete the comparison table for every transaction the notice names?
- No - stop here and finish it. Keep the printed response date in view while you work.
- Yes - continue.
- Do all proposed changes match your records?
- All match - agree branch. Respond by the printed date.
- Some match - partial branch. List the accepted lines, list the disputed lines, and attach evidence per disputed line by the printed date.
- None match - disagree branch. Attach a per-item explanation plus records by the printed date.
- For any disputed line, do you hold the acquisition record?
- Evidence complete - assemble the packet and send it.
- Evidence missing - keep that line flagged in your working packet, gather what exists, and still respond by the printed date rather than letting it pass in silence.
- Is the letter in your hand a statutory notice of deficiency rather than a CP2000? Go to the last section of this guide; that route runs on a different clock.
Build the evidence packet for each disputed item
The question readers ask in different words every season is which number the IRS will believe. The honest framing is that you are not submitting a winning number, you are submitting a trail: figure, record that produced it, form line it belongs on. An export from your portfolio tracker is a summary of a trail, not the trail itself.
Attachment checklist (send copies, keep originals):
| Attachment | What it supports |
|---|---|
| The CP2000 and its response form, completed | Your stated agreement or disagreement, and which lines you dispute |
| The filed return for the notice year, with Form 8949 and Schedule D | What you actually reported for the same disposals |
| Issuer statements for the year (broker or exchange forms, account statements) | The proceeds figures and what the issuer did or did not report as basis |
| Transaction history for each disputed disposal | The sale itself: date, asset, amount received |
| Acquisition records: buy confirmations, transfer-in history, wallet or bank records | Your actual dollar cost, which is what substantiates basis |
| A short written explanation, one item per disputed line | Why your figure differs, tied to the record you attached for it |
| Missing-record slot: name the line, the asset, the acquisition date, and what you still lack | Keeps a gap visible in your own packet instead of becoming an unexplained number |
That last row is not filler.
One season a transfer between two exchanges arrived with no history attached, and the receiving platform had nothing to show for the original purchase; the only workable move was to name the gap on the working sheet, gather the sending-side records that did exist, and keep the line labeled instead of quietly rounding it.
To locate issuer documents, start at the find your exchange's tax documents index. If the purchase record itself is gone, the method for rebuild your cost basis from the records you still have sits in its own guide rather than here.
Two reader situations we have not been able to build a documented procedure for: recovering account history after an exchange has shut down, and the theory that trading fees explain a proceeds mismatch.
Both stay open research questions on this desk, and neither belongs in your explanation letter as an assertion.
If your basis question comes from a tax year 2025 Form 1099-DA with blank or partial basis boxes, label it as the 2025 form when you write your explanation and see the more Form 1099-DA and crypto tax guides hub for that year's reporting context.
Why a CP2000 is different from an audit
The IRS matches third-party information returns against what taxpayers report, and when a figure does not line up, the automated underreporter process generates a proposed adjustment rather than an examination.
Per IRS guidance on the CP2000 series, the notice proposes changes because third-party information differs from the return, is not a bill, and directs you to review it and reply by the listed date. That applies across the CP2000, CP2000A, CP2000B, CP2000C, CP2000D and CP2000E variants.
Proposal versus bill is the practical difference. A bill asks for money; a proposal asks whether the figures are right and gives you a channel to say they are not. Saying that this process is not a formal audit is not a promise of immunity from other IRS action later.
Send your response using the notice's instructions
Submission algorithm
- Read the response date and the "what you need to do" directions printed on your own notice. Everything below follows them, not a template.
- Complete the response form for the branch you chose: agreement, or disagreement with the lines you identified.
- Follow the form's applicable signature instructions, including a spouse's signature where the form calls for one on a joint return.
- Attach your written per-item explanation and copies of the supporting records from the checklist.
- Send it through a channel the notice offers. The IRS CP2000 page describes reply options including secure upload, fax and mail; take the upload details, fax number or address from your notice rather than from any article.
- Before it leaves your hands, scan or photocopy the complete packet and keep the transmission record: the upload confirmation, the fax report, or the mailing receipt.
Step 6 is my own organizing habit, not an IRS acceptance guarantee. It has one job: six weeks later you can say exactly what you sent and when.
Need more time? Contact the IRS using the phone number printed on your notice and ask about your response date. Ask; do not assume.
A phone call is not an extension, and treating it as one is how a printed date slips past.
Can I just amend the return or arrange payment?
Answering the notice and correcting other parts of your return are separate jobs. The IRS CP2000 page names amendment for a narrow situation: the notice is correct, and you have other income, credits or expenses to report that the notice does not cover. That is the scope.
Responding to the live notice still happens on the notice's own date, and the mechanics of filing the correction live in how to correct an unreported crypto sale.
Whether you can pay has nothing to do with whether the proposal is accurate.
If you agree with an amount you cannot pay in full, the IRS publishes payment options and interest information on unpaid tax; respond first, then take up payment arrangements through the contact details on the notice.
Interest and relief specifics sit in how crypto tax penalties and relief work.
What if the response date has passed?
Pull out every envelope from the IRS for that tax year and sort by date. The newest correspondence tells you which process you are actually in, and it may no longer be the CP2000. Then call the number on that newest letter promptly.
There is no published grace period to lean on, and inventing one for yourself costs you the easier route.
If the proposed adjustment stays unresolved, the IRS may issue a statutory notice of deficiency, which arrives as its own mailed letter. As of 2026, a taxpayer generally has 90 days after that notice is mailed to file a petition with the United States Tax Court; the deadline printed on the deficiency notice is the one to use. Keep the two clocks separate in your head.
Calling the IRS about a CP2000 response does not move a court petition deadline, and the petition window does not restart because you are still gathering records.
On the fear that shows up in almost every message about these letters: ignoring a CP2000 does not convert the matter into a criminal case. What happens is administrative. The proposed adjustment moves forward toward assessment, potentially through a deficiency notice, and the correspondence keeps arriving.
A criminal investigation is a separate track with its own process, and no article can tell you what your particular facts mean.
Where the deadlines conflict, the records are scattered across dead accounts, or the proposed amount is large enough to change your year, that is the point to bring in a CPA, enrolled agent or tax attorney who can see your documents.
Copy the response date from your notice, compare each proposed change, and use the checklist for the response you can support with your records.
Sources
- IRS, Understanding your CP2000 series notice - Why you received this notice; What you need to do; How to reply; Amend your return. irs.gov/individuals/understanding-your-cp2000-notice - retrieved September 26, 2026. Supports proposal status, the printed response date, upload/fax/mail reply channels, and the additional-items amendment condition.
- IRS, Digital assets - basis and gain/loss guidance. irs.gov/filing/digital-assets - retrieved September 26, 2026. Supports actual taxpayer basis and record-backed calculation.
- IRS, Tax Topic 652 - Notice of underreported income, CP2000 matching and response procedure. irs.gov/taxtopics/tc652 - no retrieval date recorded.
- IRS Publication 5181 - CP2000-family notice reference. irs.gov/pub/irs-pdf/p5181.pdf - Rev. 12-2022. Apply your own notice's instructions to its particular response form.
- IRS, Understanding your CP3219A notice - statutory notice of deficiency and petition route. irs.gov/individuals/understanding-your-cp3219a-notice - no retrieval date recorded.
- IRS, Tax Topic 653 - unpaid tax, interest and payment context. irs.gov/taxtopics/tc653 - no retrieval date recorded.
