More IRS Incompetency

[Terry D EA]

Client of mine received a CP2000 adjusting their return and proposing a tax due of 4465.00. All and I mean virtually all of the items the notice states were not included in the return were indeed included in the original return. To make matters worse, this return was later amended due to the client receiving a very late (middle of summer) K-1 from an S-Corp that wasn't even mentioned in the notice. I have read where others indicate the CP2000 is almost always computer generated. If so, then the computer is seriously skewed. My plan is to disagree with all of the changes, include a copy of the original and amended return and wait to see what happens from there Any other suggestions will be appreciated.

Don't know why this posted twice. Sorry, noticed subject line is spelled wrong too.

[kcjenkins]

Your solution is the proper one. It's a pain, but it's really they only way. At that point an actual human will look at the return, and usually that is all it takes to clear things up.

[Terry D EA]

Thanks KC. There was another item on the proposal of a dividend received from a company that my client states they have no idea who that company is and to back that up, I have not seen any documents from that company for this client for the last five or so years that I have been helping them. I guess a cover letter itemizing these things out would suffice?

[kcjenkins]

It should. I had a client that had that problem for 5 years running. Made me so mad that the IRS would not help us to make the broker [Merrill] correct their records to stop reporting the dividends to my client's SSN, or tell us who it actually belonged to. Each year we had to contest the 1099-DIV, and each year, they took it off, but they would not order the brokerage to correct things at their end. And Merrill just ignored every request to clear it up.

[Guest Taxed]

KC your client should complain to FINRA if this has been going on for 5 years and Merrill has made no attempt to correct or explain why they are creating an incorrect 1099-DIV ?

Recently Merrill got fined big time for filing some incorrect reports, so i think a FINRA complaint will get their attention.

Now it is possible that your client may have had an old account that is still active (generating dividends) but forgotten?

[kcjenkins]

Nope, we finally got it resolved sort of. Actually the person who actually owned the account cashed it out that 5th year. Don't know if they switched broker or what, but it ended the problem. This was no small overlooked account, the amount of dividends was over 20K each year. That last year I actually got to talk to an IRS employee with a heart, who looked at the record, saw the repetitions, and looked up the details and told me that, while she could not tell me any details, she could see that the account was closed that year, so we should not have any more of that problem. And she was right.