Accuracy-related penalty check for a CP2000

The formula below is the handoff text, not a new calculation.

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See if the 20% substantial understatement threshold is met, using the rule in IRC section 6662.

By Tax Letter Desk Updated November 4, 2026

The tax required to be shown on your return, as the notice proposes it.

The total tax on the return you filed.

Your result

Enter both amounts to see if the threshold is met.

Understatement = correct tax − tax shown on your return

Threshold = greater of 10% × correct tax, or $5,000

Penalty estimate = 20% × understatement, if it exceeds the threshold

This is an estimate. It treats the underpayment as equal to the understatement.

The law reduces the understatement for items with substantial authority, or disclosed items. This check doesn't.

Topic 652 says certain penalties may apply but may not be shown on the CP2000.

Sources: IRS, Accuracy-related penalty , updated October 15, 2026; 26 U.S.C. § 6662(a), (d) ; IRS Topic no. 652 , updated October 16, 2026.

It may not be. Topic 652 says certain penalties may apply but may not be shown on the notice.

20% of the portion of the underpayment that the penalty applies to.

No. It checks only the substantial understatement threshold.

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