One more detail
- From: "Bishoop" <none@xxxxxxxxx>
- Date: Thu, 6 Jul 2006 19:21:13 -0400
"Bishoop" <none@xxxxxxxxx> wrote in message
news:jJidnd3qOoWMFTDZnZ2dnUVZ_vKdnZ2d@xxxxxxxxxxxxxxx
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.
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.
As near as I can figure what happened is when I did the import from MS
Money into TaxCut the two above mentioned transactions were not imported
and I did not catch it during my "audit" before filing. Guess I've put
too much reliance on the software doing the right thing and not checking
closely enough.
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. Should I just send in the revised Sch D. Or, should I write a
detailed letter explaning everything, include broker sale/purchase
confirmations, broker 1099s with transaction records, etc.
I agree now that I under payed $113. I have no idea how to calculate
interest and/or penalities. Would I be wise to just include a check for
$113 and let them tell how much more I owe? I want this to go as smoothly
as possible.
Thanks in advance for any useful suggestions.
Bishoop....
In my revised Sch D I "lumped" all transactions for a single security which
made up a single order I placed into one line item on the form. That is, If
I placed an order to sell 10K shares of ABC it may take several transactions
by the brokerage to fill the order. In the print out from the IRS each and
every transaction was listed. Should I get that detailed or is my lumping
them together OK. I have always done that in the past.
Is NOT listing every single transaction that the broker reports another
problem, even though the "small" transactions equal the "lumped" amount I
list on D?
I want to get this right the first time.
I've been filing for over 50 years and this is the first question of any
kind that has come up. Will this latest fiasco label me for closer scrunity
in the future?
Thanks again.
Bishoop....
.
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