CP2000 Notice for Gambling Winnings: How to Respond

June 12, 2026 by Carolyn Richardson, EA, MBA

I forgot to add my gambling winnings to my tax return, and I received a notice about my 2024 taxes - what do I do?

- Chance, WA


Hello Chance,

Thank you for submitting your question to our blog regarding your notice. And what a great name for a gambler! You don't say what kind of notice you received, but since you live in the state of Washington, we're going to assume it was an IRS notice, as Washington state has no state income tax, and you wouldn’t be reporting your gambling winnings on a return for that state. The IRS issues several different types of notices, but it sounds like you either received a math error notice, usually a Notice CP11 or CP12, or you received a notice of proposed adjustment, which is a Notice CP2000, questioning why your gambling winnings were not reported on your federal tax return. You also mentioned that you forgot to report them when you filed your 2024 return.

If you received a math error notice, review the notice carefully, as these notices do not have much information regarding what the IRS is proposing to change. Generally, they will only show any changes they made to your tax liability and the amount of tax, interest, and penalties due because of those changes. These notices are 2 to 3 pages long and have a very specific time frame for challenging the changes that the IRS has made, usually 60 days. If you do not protest the notice within the 60 days, either by calling the IRS at the number on the notice or by sending them a response in writing, you lose your ability to appeal the changes. Therefore, you need to act quickly. 

 

What Should I Do Now? 

The notice will contain instructions on how to respond to the notice, and you must follow them.

If the notice you received was the Notice CP2000, which seems more likely, know that these are generated when the IRS compares what you reported on your tax return with information they received from third-party sources (usually for wages or other income). In this case, the IRS likely received the W-2G forms the casinos issued when you were winning at their establishments. Generally, when gambling winnings exceed a certain amount, the casino must issue you a Form W-2G before you leave the casino, usually at the time you cash in your chips. The casino will also send a copy of Form W-2G to the IRS and any applicable state tax agency. In the excitement of winning, you may have inadvertently misplaced or lost these forms.

The good news is if you received a CP2000, there are a couple of ways to respond – but, again, you should act quickly. These notices usually require a response within 30 days from the date on the notice; however, you can call the IRS and ask for additional time to gather your documentation, if needed. 

 

What If I Agree with the Notice? 

If you believe the IRS notice and its proposed assessment are correct, you can respond by returning the response page portion of the notice, indicating in the appropriate box that you agree with the changes made and consent to the assessment of the tax. 

 

What If I Disagree with the Notice? 

If you disagree with the changes, you can also indicate that on the response page, but you will also need to include an explanation of why you disagree and provide documents to show the IRS that their assessment is incorrect. With gambling income, more often than not, your gambling losses will equal or exceed the amount that you actually won, and gambling losses can be used to reduce the taxes that might result from the winnings reported on your tax return, but you will need to itemize deductions to take advantage of this.

Gambling income is normally reported on Schedule 1, line 8B, but generally you cannot reduce the gross gambling income on Schedule 1 by offsetting it with your losses and only report your net winnings. If you have the documentation to support gambling sessions (discussed in more detail below), you may be able to report only the net winnings for each session on Schedule 1). However, gambling losses are usually claimed as an itemized deduction on Schedule A, line 16, if you cannot establish your wins/losses for each session. 

If you did not previously itemize deductions on your tax return, it may be beneficial to amend your tax return in response to the notice. When filing, make sure you write “CP2000” on the top of your Form 1040X. While you can file the amended return electronically, we don’t usually recommend doing so. Instead, send the corrected return with your response and a copy of the notice. You can also submit your response at irs.gov/connect, including a copy of the amended return. You can find out more about responding to a CP2000 notice at irs.gov/CP2000series. Include both the omitted gambling winnings and also include your losses on Schedule A. If you have other itemized deductions that you can claim (usually property taxes, state sales taxes, mortgage interest, and charitable contributions) that you didn’t claim previously because they didn’t exceed your standard deduction, you can also claim them along with your gambling losses to get you over the standard deduction amount. 

You don't mention what your filing status was for 2024, but the standard deduction for a single person in that year was $14,600, for a married filing joint couple it was $29,200, and for a head of household it was $21,900. If you are over the age of 65 or blind, you get an additional $1,550, if you're married filing jointly, and $1,950 if you are single or head of household.

If claiming your gambling losses still won’t result in itemized deductions larger than your standard deduction, you won’t benefit from amending your return and in that case, it’s likely that the amount due on the IRS notice is correct.

When trying to determine your net winnings or losses, the IRS regulations state that you should keep a log or diary of your gambling activity to substantiate your losses. The diary should include the date and type of wager or wagering activity, the name and address of the gambling establishment, the names of any other persons you were gambling with, and the amount won or lost. You may also be able to establish losses through ATM withdrawals, credit card charges, or bank withdrawals. You should keep any paper documentation of wagers placed, such as keno tickets, bingo cards, horse racing tickets, lottery tickets, and of course, slot machine records which you can usually obtain through the use of your player’s card. 

The regulations allow you to report your wins or losses based on your “information reporting period,” which is generally defined as a “period of play that begins when a patron places the first wager on a particular type of game at a gaming establishment and ends when the patron places their last wager on the same type of game before the end of the same calendar day at the same gaming establishment. An information reporting period is a 24-hour period.” [Treasury Regulation §1.6041-10(b)(2)] For example, if you start playing blackjack at a $5 table with a buy-in of $200, even if you change tables occasionally to $10 or $25 tables, take a break for dinner, and then continue playing blackjack until 11:00 PM, and at the end of the evening you have $700 in your pocket which you cash in, your win for that session is $500 ($700 in winnings less the $200 original buy-in), not $700. But again, it’s important to keep records of your sessions.

We hope this answers your question, and good luck with your next gaming adventure!

Sincerely,
Carolyn Richardson, EA, MBA