I worked 2 jobs, and ended up having more then the allowed amount of social security withheld (max is $6324). Used turbotax, and they properly allowed me to credit back the overpayment. However, IRS came back with CP2000 form stating that since my wife was on the tax return as well (she did not work at all), she counts towards the social securtiy max level (thus doubling the amount that can be taken from me). This does not appear to be a correct assessment. Am I wrong in protesting this proposed change?

That is totally wrong. Social Security tax assessments are driven individually by the Social Security number of the person earning the income.

Unless there has been a change in the law that I am not aware of, challenge this proposed change.