jbjr[at]webtv.net (William Brenner) wrote:

- quote -

I will relate a recent experience I had. It may give you an
idea.

A few weeks ago I received a notice from the IRS that I had
underreported some 2003 rental income by about $40K. As it
turns out, I have a 50% partner, but the checks get made out
to me. So yearly I receive a 1099 from the renter; and I,
in turn, send my partner a 1099 for his share. Somehow, both
the IRS (and I) had misplaced that nominee 1099. (My
partner did have a copy, though).

After taking that into account,there was an additional
discrepancy due to the fact that the renter mailed their
check for Jan 2005 rent at the end of December, but I did
not receive it until the beginning of January. So I did not
report that income in 2003 (but did in 2004).

In any event, still having some question I telephoned the
IRS using the phone number that was with the paperwork. I
wound up speaking with an examiner who took care of
everything over the telephone and today I received the
Closing Notice telling me not to worry.

You may still need to gather documentation, but you might
try a simple phone call first.

--ron

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A.G. Kalman wrote:

(snipsnipsnip)

- quote -

Trying to think of something "wit"ty to say, but
would only by "half" successful if I could on
such an evening as this, after a rather "taxing"
week at the office and a record six extensions
having had to be filed today (Gawd, I hate those!)

However, it IS a rather ChEAr$$$$$ful day,
ifyougetmydrift.

Harlan, aka notAlan

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William Brenner wrote:

- quote -

I would only respond to what the IRS is requesting. I would
obtain a document from the bank that specifically states
that there was only $8000 withdrawn from the account. I
would attach that statement to your response.

As your wife's transaction does not impact your taxes, I
would amend the return once you resolve the $8000 issue or
when and if you hear from the IRS on that issue.

Sorry, that my name is not Harlan.......

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"William Brenner" wrote:

- quote -

If the two 1099-Rs are duplicates, I suggest you just
respond with info that they are. IRS attempts to deduce
duplicates, but I suspect their quality review process
before a notice goes out is geared to catch only as many as
they can.

The people who work the underreporter cases are not
associated with the people who work 1040X's. Combining the
two may literally rely on the effectiveness of a Post-It
note to shuffle paper around a huge IRS Center. That's how
things get messed up, so I would file a 1040X later after
the dust settles. You'll earn interest on the refund, and
good-faith sounding 1040Xs usually sail right through.
People who work underreporter cases are more technically
oriented. They're raising one issue, and you'd be handing
back two.

Fred F.

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In 2003, I made a single (penalty free) $8000 withdrawal
from my one and only bank CD IRA account. It was duly
reported on our MFJ 1040. I have documentation of the single
withdrawal in the form of an account activity statement from
the bank.

Today (4/13) I received a notice from IRS indicating that
they had received ~two~ 1099-Rs from the bank, each showing
an $8000 withdrawal; and that I owed them an additional
$2065 in tax and interest. (The bank advised that multiple
account withdrawals would have been reported via a single
1099-R.)

Is there something I should do other than send them their
response form along with the bank statement and an
explanation?

There is another complication. Also in 2003, my dear wife
withdrew $1500 from her IRA, but neglected to tell me that
she had (properly) rolled it over. She has documentation.
(There is a miniscule chance that she did tell me and that I
forgot.<g> ) Anyway, I entered it as income on the 1040,
making the total taxable IRA income $9500. (The IRS total
figure is $17500.)

Should I try to clear up both issues together and politely
request a refund, or would it be better to first try to fix
the extra $8000, and when (if) that is settled, file a 1040X
to take care of the over-reported $1500? (The IRS notice
specifies that one should not send a 1040X with one's
initial response.)

Many thanks for your help.

Bill

(Harlan-- Get me out of this and I promise no more
NY Times articles. <g
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