Re: Handling notice of insufficient tax payment

"Bishoop" <none@xxxxxxxxx> wrote:

I received a notice from the IRS that they believe I understated my tax
liability for 2004 by $15K and with penalties and interest they want a
total of $19.5K.

All of the understated income is related to securities sales during 2004.
When I entered the data into my software I was off a couple days in the
transaction date for for a couple of trades. I do not file electronically
so this must have been a manual audit, compaing broker information against
my Sch D.

Not necessarily. When you file on paper they transcribe the Schedule D
information. It sounds like you were missing some, specifically the "basis"
column, or they didn't transcribe it properly.

Although in one case, a $26K sale they highlighted is very clearly listed
on the Sch D on the "correct" date and for the correct amount. I assume
the audit clerk just missed it. It was the very first one listed under
short term gains/losses.

There is one transaction they high lighted that clearly is missing from my
Sch D with a gain of about $500. There is another transaction missing
from my Sch D that they did not catch with a net loss of about $100.

Without Schedule D entries they have no way of knowing how much the gain or
loss was, so the computer assumes a gain equal to the sales price for each
transaction.

<snip>

I redid the Sch D manually in the TaxCut software and the recalculation
put my tax liability at ($40) instead of the $153 I recieved as a refund
for 2004.

Actually my question is, how detailed should I be in my reponse to the
IRS.

Send them the corrected Schedule D with a check for the additional tax due.
We can hope that will take care of it.
--
Phil Marti
Clarksburg, MD


.

Relevant Pages

  • Handling notice of insufficient tax payment
    ... I received a notice from the IRS that they believe I understated my tax ... liability for 2004 by $15K and with penalties and interest they want a total ... the Sch D on the "correct" date and for the correct amount. ... There is one transaction they high lighted that clearly is missing from my ...
    (misc.taxes)
  • Re: Handling notice of insufficient tax payment
    ... All of the understated income is related to securities sales during 2004. ... on the Sch D on the "correct" date and for the correct amount. ... There is one transaction they high lighted that clearly is missing from ... put my tax liability at instead of the $153 I recieved as a refund ...
    (misc.taxes)
  • Re: Online Shopping Contract Advice
    ... In the sales I saw a great TV offer on a High Street retailer's website. ... Near the end of the month, I noticed my bank account seemed a bit too healthy. ... After several calls the retailer finally told be they'd cancelled transaction as they suspected fraud. ... My shop relies on the 3rd Man to assess the risk associated with a web transaction, and looks at things like electoral role, how many cards used at that address, web based email or proper email address, mobile number or landline. ...
    (uk.legal)
  • Re: OT: ebay rant
    ... All Sales Final is means the transaction is the end of the ... I guess lesson learned is that you should add No exchanges - No ... a bully consumer. ... I know what All Sales ...
    (alt.fashion)
  • Re: Shops accepting travellers cheques
    ... > because they are so rare many retail ... > salespeople may not know how or remember ... > how to process the transaction on their sales ...
    (rec.travel.usa-canada)