What is a CP2000 notice, and why do expats get them?
A CP2000 is not an audit. It is the IRS Automated Underreporter (AUR) system flagging a mismatch between income reported to the IRS by third parties (banks, brokers, employers) and what you reported on your return. Expats are frequent targets because the IRS matching system does not account for the FEIE or FTC when comparing income documents to your Form 1040. You have 30 days to respond (60 days if you live outside the U.S.). For the full IRS explanation, see the CP2000 notice.
- CP2000 is an income mismatch notice, not an audit or a bill
- 30-day response deadline (60 days from abroad) before the IRS issues a Statutory Notice of Deficiency
- Expats trigger CP2000s when FEIE, FTC, or treaty-based exclusions offset income the IRS expects to see taxed
- Responding with documentation often resolves the issue with no additional tax owed
What triggers an expat CP2000:
- 1099-DIV or 1099-INT from U.S. brokers not reconciled on the return
- Foreign wages excluded on Form 2555 but showing on a W-2
- Retirement distributions reported by a U.S. custodian but offset by a treaty
- K-1 pass-through income from a U.S. partnership or S-Corp
How to respond:
| Situation | What to send |
| Income was excluded via FEIE | Copy of Form 2555 showing the exclusion |
| Foreign tax already paid | Form 1116 showing the credit |
| Income reported but in different category | Explanation letter with supporting schedules |
| IRS amount is correct | Signed response form with payment or installment request |
If you do not respond, the IRS will issue a Statutory Notice of Deficiency (90-day letter), after which the proposed tax becomes assessed, and collection begins. If the CP2000 amount is wrong, an amended return may also be needed to correct the underlying mismatch.
For help responding from abroad, see our IRS Amnesty Program Guide.
Last updated on April 29, 2026
