We received a dreaded CP2000 letter yesterday from the IRS "proposing" a large payment from us with respect to our 2022 return based on four 1099s that the IRS said were not included on our return.
When I looked through the letter the only material dollar amounts related to two 1099Qs from 529 plans for my two sons. The proposed IRS amount assumed 100% of the profit/gain from the 529 distribution was taxable (even tho the IRS presumably also received the 1098Ts covering tuition).
I'm conservative in my 529 withdrawals, and I double-checked today the student worksheets in TurboTax and confirmed that I did not draw more in 2022 for either son than his 2022 529 expenses (in fact I drew slightly less for both). In other words, my tax for both 1099Qs should be zero.
I will write a letter to the IRS explaining all this and attaching (1) the student worksheets from TurboTax and (2) screenshots from the websites of the two universities showing the various tuition and room & board payments in 2022.
Other than tuition and room & board payments I drew about $3,700 in computer/book expenses for one son and about $250 in computer expenses for the other.
My questions:
Am I missing something here? I can see the IRS asking me to provide evidence of my 529 expenditures, but was surprised to receive a proposed adjustment to my taxes based on the assumption that the entire 1099Q profit was taxable.
Anything else I should do? Attach the spreadsheet showing the computer and book amounts (or is that too much info)?
There were two other listed 1099 amounts--$4 and $52--both of which were included in our return . I'll highlight to the IRS where in the return those amounts were included.
When I looked through the letter the only material dollar amounts related to two 1099Qs from 529 plans for my two sons. The proposed IRS amount assumed 100% of the profit/gain from the 529 distribution was taxable (even tho the IRS presumably also received the 1098Ts covering tuition).
I'm conservative in my 529 withdrawals, and I double-checked today the student worksheets in TurboTax and confirmed that I did not draw more in 2022 for either son than his 2022 529 expenses (in fact I drew slightly less for both). In other words, my tax for both 1099Qs should be zero.
I will write a letter to the IRS explaining all this and attaching (1) the student worksheets from TurboTax and (2) screenshots from the websites of the two universities showing the various tuition and room & board payments in 2022.
Other than tuition and room & board payments I drew about $3,700 in computer/book expenses for one son and about $250 in computer expenses for the other.
My questions:
Am I missing something here? I can see the IRS asking me to provide evidence of my 529 expenditures, but was surprised to receive a proposed adjustment to my taxes based on the assumption that the entire 1099Q profit was taxable.
Anything else I should do? Attach the spreadsheet showing the computer and book amounts (or is that too much info)?
There were two other listed 1099 amounts--$4 and $52--both of which were included in our return . I'll highlight to the IRS where in the return those amounts were included.
Statistics: Posted by cowdogman — Sun Jan 07, 2024 12:55 pm — Replies 17 — Views 791
