Just got notification from the IRS concerning Schedule D Capital gain dividends in the amount of 98,990 and not reported by me.
In my schedule D (Form 1040) Part II clearly reports this long term capital gain in the amount of 100,000, with a cost basis of 25, and all takes paid. Clearly these are the same items as nothing even similar can be construed elswhere.
How did the IRS computer likely screw up, and how do I fix it.
Probably, you reported an incorrect amount ($98,990<>$100,000), and it does not match to the amount reported on a 1099 or similar form from the payer to the IRS.
No idea how to fix it.
Isn’t there any contact information for the IRS? If so, call them. If not, find the nearest IRS branch and ask what needs to be done.
Since the OP is looking for advice, this is best suited to IMHO.
Colibri
General Questions Moderator
There is a “sales price” column on Schedule D. The number you put in this column must match exactly with the corresponding number reported on Form 1099-B. If they don’t match or you have omitted something that was reported on Form 1099-B, the matching program will kick out your return and you will get a letter. They assume a basis of zero for any unreported sales so the amount they say you owe is generally the worst case scenario.
This is easy to fix. Write the IRS a letter explaining that you did, in fact, report the amount in question. Include enough detail to show that your claim is true. An IRS agent will review your case and, if you are correct, will close the case.
I agree with Gus Gusterson above.
To elaborate, if you got a CP2000, the last page should contain a “Response Form.”
The Response Form has three options:
Option 1 - I agree with all changes.
Option 2 - I do not agree with some of the changes.
Option 3 - I do not agree with any of the changes.
If you do not agree, check the box next to Option 3.
Make a copy of the Schedule D you filed and of the Form 1099-B you received.
Write a letter that points out where on Schedule D you reported the transaction. If the amount shown as “sales price” on Schedule D does not match the amount in Box 2 of Form 1099-B, explain why.
Make the letter short and easy to read. Mail the Response Form, letter, and copies of Schedule D and 1099-B to the address on the Response Form. If you wish, send it by Certified Mail so you have proof of responding on time.
I thought that it was something like exactly not matching. I will do what you suggest. In rare past IRS interactions I have had some appallingly stupid people to talk to as well as rarely very bright people who understood everything. Hopefully, this will be solved quickly and amicably.
I had a question for the IRS once, about six or seven years ago. I called them on some help line - I’d have to search for the number, but I’m sure it’s easy to find online. I was very pleasantly surprised with how polite and helpful they were. The guy I spoke to didn’t actually have an answer for me, but took my number and called me back a few hours later.
-D/a
Is this the new 2011 version of Sch D, which pulls information from 8949, or is the 2010 and earlier?
If it’s the newer one, then the mismatch might also result from whether you coded the 8949 correctly. The codes are: A (sale and cost basis both reported to IRS), B (sale reported to IRS, but not cost basis) or C (neither reported to IRS). If you put a C when an A or B was correct, I would expect the IRS to send a letter like this.
If this is a return from 2010 or earlier, I’d agree with what the others have said.
takes? Truer words were never typed.
StG
Probably 800-TAX-1040 (800-829-1040). And yes, if you’re not calling them in mid-April, you may be surprised to find someone who’s actually knowledgeable and nice.
I had a vaguely similar issue recently. Got a letter from the IRS saying they found a discrepancy so I owed more money. I wrote them back showing them that they were wrong, and including documentation. A few months later they sent another letter telling me that they accepted my explanation, I didn’t owe anything, and the case was closed.
It was really not a big deal, though when I got that first letter it was infuriating.