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CP2000 notice for RSU or stock sales: what to do first

CP2000 notices often flag 1099-B proceeds without matching basis — common when RSU sales report $0 cost basis despite vest wages on W-2.

The IRS sent a CP2000 proposing more tax — often after a 1099-B showed a large capital gain on RSU or option shares that does not match what you filed.

Start here

A CP2000 is a proposed change — not a bill yet. For equity comp, mismatches often involve proceeds without basis adjustment, missing wages, or / reporting gaps. Compare the notice to your , , confirmations, and Form 8949 before agreeing or disagreeing.

What you need before using this

  • CP2000 notice with tax year and proposed changes.
  • Original return copy if you filed one.
  • , , and Form 8949 from that year.
  • and exercise confirmations.

IRS notice procedures change; follow the instructions on your specific notice.

Why this happens

IRS automated matching compares proceeds to return income.

$0 basis on makes the IRS think the full sale is gain.

wages may already include income the notice does not credit.

Timing differences between amended broker forms and filed return.

What to check

  • Which transactions the notice references.
  • Whether you reported basis adjustment on Form 8949.
  • Box 1 for wages in the same year.
  • Response deadline on the notice.
  • Whether you agree, partially agree, or disagree.

Paying the proposed amount without checking basis

Many CP2000s propose tax on full sale proceeds because basis was missing on the filed return. A basis adjustment with documentation often resolves the mismatch — not automatic agreement.

What to check in your documents

  • CP2000 summary pages listing transactions.
  • copies tied to each line.
  • records for basis.
  • Form 8949 as filed.
  • wage detail.

Example scenario (hypothetical)

Illustration only, not your tax situation.

Example: CP2000 proposes tax on $18,000 gain from sale. Your records show $17,000 basis on and with $0 basis filed. Response explains adjustment — proposed gain may drop to about $1,000.

Questions people ask

Is a CP2000 an audit?
It is automated underreporting contact, not a full audit. You still must respond by the deadline with documentation if you disagree.
CP2000 after RSU sale with $0 basis?
Common pattern. Gather confirmation and , show basis adjustment should apply — see adjust guide.
Should I amend instead of responding?
Sometimes an amended return (Form 1040-X) plus CP2000 response is cleaner if you know the original return omitted basis. A preparer can choose the best path.

When to get help from a tax pro

  • Proposed amount is large or includes penalties.
  • Multiple years or forms are involved.
  • You already agreed and later found records.

Related calculators

Related pages

Sources and notes

Primary tax claims on this page are supported by the official and secondary sources below. Broker and software links describe reporting mechanics — confirm rules against IRS or state guidance.

Automated underreporter notices vs 1099-B and basis adjustments.

For learning, not filing

VestingTax.com is not a CPA firm or tax preparer. Grants, employers, and states all differ. Use the cited IRS and state sources above, your own documents, and a qualified tax professional before you make decisions from this guide.

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