Why the CP2000 interest grows, and when it stops
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Why the CP2000 interest grows, and when it stops
By Tax Letter Desk Updated November 4, 2026
Short answer
CP2000 interest runs from the return’s due date, extensions ignored, to 30 days after the notice date.
It accrues until you pay in full. Paying the proposed amount within 30 days stops additional interest.
The IRS underpayment rate for October to December 2026 is 7%.
Checked November 4, 2026 against IRS Topic 652 (Oct 16, 2026) , IRS interest rates (Sep 10, 2026) .
In this article
What period does the notice cover?
What rate applies?
How does interest stop?
What if I dispute it but want to stop interest?
Questions
What period does the notice cover?
From the due date of the return, regardless of extensions, to 30 days from the date on the notice.
Certain penalties may also apply, but may not be shown.
What rate applies?
The IRS sets the rate every quarter. Notice 746 says it compounds interest daily.
Get your reply ready before the date on your notice.
How does interest stop?
Pay the proposed amount within 30 days. That stops additional interest, and possibly penalties.
If you wait for the bill, interest accrues until the amount is paid in full.
See your day 30 with the deadline calculator
What if I dispute it but want to stop interest?
Pub 5181: pay the full proposed amount and designate it a “6603 deposit”.
Attach a copy of the notice, or a statement with the same information.
Sources
Topic no. 652, Notice of underreported income, CP2000 IRS, updated October 16, 2026
Notice 746, Information about your notice, penalty and interest (PDF) IRS, revision July 2026
Quarterly interest rates IRS, updated September 10, 2026
Publication 5181, Tax return reviews by mail (PDF) IRS, revision December 2022
Questions
Yes. Notice 746 says the IRS compounds interest daily.
No. Interest runs from the due date of the return, regardless of extensions.
7% for October to December 2026, for underpayments.
Related guides
How to respond to a CP2000 notice Pillar guide
Can’t pay your CP2000? Payment options Article
Accuracy-related penalty check for a CP2000 Tool
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