Has anyone received this notice and how hard was it to fix? I believe I have enough documentation to fix the issue but assume it will be a hassle. The instructions say to send in documents correcting the problem and statement describing what happened. Will they just send a notice back verifying that my fix resolves the problem? How long can I expect? Any help is appreciated!
2007-09-06 02:27:56 · 3 answers · asked by transypat 2 in Business & Finance ➔ Taxes ➔ United States
If the documentation that you have fixes the problem with you owing less tax then the IRS notice has (which is about 100% guaranteed, since the IRS only has the proceeds of any unreported security sales, and does not have the cost basis for them) then any hassle you go through is worth it. I am a CPA/Tax Preparer and see this type of notice all the time. What you need to do is prepare a 1040X amending your original return for the additional information that you have put together, and send the 1040X along with any changed tax return forms (corrected 1040, schedule D, etc) to the address on the notice. When the IRS receives the notice and forms and is satisfied that your info is accurate, they will send you a new notice with the tax owed, plus penalties and interest.
2007-09-06 02:41:10 · answer #1 · answered by Anonymous · 1⤊ 0⤋
If you didn't report some sales, the IRS will have the sale amount but not your basis to subtract from it, so the notice they send will levy tax on the entire sale price, which could be substantially more than you really owe. It's very easy to fix. Redo your return including the omitted sales and also their basis, and send a copy of that along with the page of the CP-2000 that you have to send back. Also fill out a 1040X amended return showing the change, and include that with what you send them. On the CP-2000 form mark that you don't agree with their assessment. If you owe additional tax that you haven't paid yet and can send that with the package (the page from the CP-2000 and your redone return) then send them a check along with the info - if you owe interest and penalties, they'll bill you.
This is a pretty common situation and the IRS is quite used to getting this kind of change on a CP-2000 for omitted stock sales. The times I've seen this situation is hasn't been a hassle to fix. Just be sure to send in all the paperwork by the deadline they give or you could be giving up your right to appeal. You will most likely either owe some additional tax from what you paid if the omitted sales were a net gain, or have a refund coming if the sales omitted were losses.
2007-09-06 11:38:59 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
Do as they ask and if your evidence supports your position it will be resolved and they will send you a letter stating that.
I would say anywhere from 4-6 weeks given their loads at this time of year.
Do you have a contact person and phone number. If so call that person or call and ask who is handling you file and see if you can fax the info directly to that person. Much faste . Good luck
2007-09-06 09:34:12 · answer #3 · answered by Anonymous · 1⤊ 0⤋