CP2501 letter

Discussion in 'Tax' started by Ernie Klein, Feb 12, 2008.

  1. Ernie Klein

    Ernie Klein Guest

    We received a CP2501 letter saying that the IRS received 7 1099-B
    reports that were not included on our 2006 return.

    The problem is that all 7 stock/mutual fund sales that they are
    questioning _were_ included on our return in exactly the same amounts
    that they are questioning.

    Some of the entries on our return were a single line entry, some were
    mutual funds with reinvested dividends that were split between long and
    short term, and some were multiple entries using the FIFO method. In
    all cases the total sales amount matches the amount reported on the
    1099-B.

    There were also many other sales in 2006 that we reported on the same
    schedule D that the IRS is not questioning.

    We did efile using TurboTax. It is almost like the IRS didn't receive
    all of our Schedule D data -- is that possible???

    How should I handle this? Attach a copy of our Schedule D and ask them
    to look again?

    --
    -Ernie-

    --
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    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
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    Ernie Klein, Feb 12, 2008
    #1
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  2. Ernie Klein wrote:
    > We received a CP2501 letter saying that the IRS received 7 1099-B
    > reports that were not included on our 2006 return.
    >
    > The problem is that all 7 stock/mutual fund sales that they are
    > questioning _were_ included on our return in exactly the same amounts
    > that they are questioning.
    >
    > Some of the entries on our return were a single line entry, some were
    > mutual funds with reinvested dividends that were split between long and
    > short term, and some were multiple entries using the FIFO method. In
    > all cases the total sales amount matches the amount reported on the
    > 1099-B.
    >
    > There were also many other sales in 2006 that we reported on the same
    > schedule D that the IRS is not questioning.
    >
    > We did efile using TurboTax. It is almost like the IRS didn't receive
    > all of our Schedule D data -- is that possible???
    >
    > How should I handle this? Attach a copy of our Schedule D and ask them
    > to look again?
    >

    That's what to do, yes. Also make copies of mutual fund 1099b and make
    notes as to how to reconcile with the schedule D filed.

    ChEAr$,
    Harlan Lunsford, EA n LA

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2007) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Harlan Lunsford, Feb 12, 2008
    #2
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  3. On Feb 11, 7:39 pm, Ernie Klein <> wrote:
    > We received a CP2501 letter saying that the IRS received 7 1099-B
    > reports that were not included on our 2006 return.
    >
    > The problem is that all 7 stock/mutual fund sales that they are
    > questioning _were_ included on our return in exactly the same amounts
    > that they are questioning.
    >
    > Some of the entries on our return were a single line entry, some were
    > mutual funds with reinvested dividends that were split between long and
    > short term, and some were multiple entries using the FIFO method. In
    > all cases the total sales amount matches the amount reported on the
    > 1099-B.
    >
    > There were also many other sales in 2006 that we reported on the same
    > schedule D that the IRS is not questioning.
    >
    > We did efile using TurboTax. It is almost like the IRS didn't receive
    > all of our Schedule D data -- is that possible???
    >
    > How should I handle this? Attach a copy of our Schedule D and ask them
    > to look again?
    >
    > --
    > -Ernie-
    >
    > --




    If the items listed on the notice were properly reported as you
    stated, perhaps there is something else that just isn't matching up
    correctly. Also check the sum of your 1099B's, 1099DIV's &
    1099INT's. Compare these numbers to the amounts reported on the IRS
    notice.

    That seems to me to be one of those computer generated matching
    notices.
    You have to go through it in detail to be certain what it is really
    looking for.
    Calling the number on the notice should shed some light on the
    situation.



    ___________________________________
    <<< Benjamin Yazersky, CPA [NJ & NY] >>>
    -----> real address on hobokeni or hobokenx <-----


    "This written advice was not intended or written to be used, and it
    cannot
    be used by any taxpayer, for the purpose of avoiding penalties that
    may be
    imposed on the taxpayer."

    (The foregoing legend has been affixed pursuant to U.S. Treasury
    Regulations
    governing tax practice.)


    The information transmitted is intended only for the person or entity
    to
    which it is addressed and may contain confidential and/or privileged
    material. Any review, retransmission, dissemination or other use of,
    or
    taking of any action in reliance upon, this information by persons or
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    this in error, please contact the sender and delete the material from
    any
    computer.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2007) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Benjamin Yazersky CPA, Feb 14, 2008
    #3
  4. Ernie Klein

    Ernie Klein Guest

    In article
    <>,
    Benjamin Yazersky CPA <> wrote:

    > On Feb 11, 7:39 pm, Ernie Klein <> wrote:
    > > We received a CP2501 letter saying that the IRS received 7 1099-B
    > > reports that were not included on our 2006 return.

    >
    >
    > That seems to me to be one of those computer generated matching
    > notices.


    Yes, it seems to be computer generated.

    > You have to go through it in detail to be certain what it is really
    > looking for.


    I have done that, but nothing stands out.

    > Calling the number on the notice should shed some light on the
    > situation.


    I tried that. The "call for assistance" number given (1-800-829-3009)
    seems to be nothing more than a canned, (push 3 to hear...) FAQ. I
    didn't find any way to actually talk to a human - in other words - a
    useless waste of time.

    --
    -Ernie-

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2007) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Ernie Klein, Feb 14, 2008
    #4
  5. Ernie Klein

    Ernie Klein Guest

    Re: CP2501 letter (UPDATE - the IRS at work)

    In article <JY7sj.72879$>,
    Harlan Lunsford <> wrote:

    > Ernie Klein wrote:
    > > We received a CP2501 letter saying that the IRS received 7 1099-B
    > > reports that were not included on our 2006 return.
    > >
    > > The problem is that all 7 stock/mutual fund sales that they are
    > > questioning _were_ included on our return in exactly the same amounts
    > > that they are questioning.
    > >
    > > Some of the entries on our return were a single line entry, some were
    > > mutual funds with reinvested dividends that were split between long and
    > > short term, and some were multiple entries using the FIFO method. In
    > > all cases the total sales amount matches the amount reported on the
    > > 1099-B.
    > >
    > > There were also many other sales in 2006 that we reported on the same
    > > schedule D that the IRS is not questioning.
    > >
    > > We did efile using TurboTax. It is almost like the IRS didn't receive
    > > all of our Schedule D data -- is that possible???
    > >
    > > How should I handle this? Attach a copy of our Schedule D and ask them
    > > to look again?
    > >

    > That's what to do, yes. Also make copies of mutual fund 1099b and make
    > notes as to how to reconcile with the schedule D filed.
    >


    UPDATE:

    So I did that. I answered each item on the CP2501 and because there was
    one minor difference, I attached a amended 1040X (which resulted in no
    change in the tax, but did change my carry over amount to 2007
    slightly). I sent that to the IRS by certified mail, return receipt. I
    received the receipt back on Feb. 28 showing the IRS had received my
    package.

    Today I received a CP2000 notice saying that since I DIDN'T reply to the
    CP2501 at all, I now owe $34,993.

    Of course I called the information number and after waiting 45 mins.
    actually got to talk to a live person who verified that they did indeed
    receive my reply before Feb. 28 but it *was not forwarded* to the
    examining department *until March 30* (the non-reply notice to me was
    already in the works by then). They told me just to "ignore" the CP2000
    notice and I should be hearing from an examiner within 30 days.

    I am not holding my breath - I am waiting for the next letter saying
    that I ignored this CP2000 letter and to pay up as now I owe $50,000
    with interest an penalties.

    --
    -Ernie-

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2007) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Ernie Klein, Apr 11, 2008
    #5
  6. Re: CP2501 letter (UPDATE - the IRS at work)

    Ernie Klein wrote:
    > In article <JY7sj.72879$>,
    > Harlan Lunsford <> wrote:
    >
    >> Ernie Klein wrote:
    >>> We received a CP2501 letter saying that the IRS received 7 1099-B
    >>> reports that were not included on our 2006 return.
    >>>
    >>> The problem is that all 7 stock/mutual fund sales that they are
    >>> questioning _were_ included on our return in exactly the same amounts
    >>> that they are questioning.
    >>>
    >>> Some of the entries on our return were a single line entry, some were
    >>> mutual funds with reinvested dividends that were split between long and
    >>> short term, and some were multiple entries using the FIFO method. In
    >>> all cases the total sales amount matches the amount reported on the
    >>> 1099-B.
    >>>
    >>> There were also many other sales in 2006 that we reported on the same
    >>> schedule D that the IRS is not questioning.
    >>>
    >>> We did efile using TurboTax. It is almost like the IRS didn't receive
    >>> all of our Schedule D data -- is that possible???
    >>>
    >>> How should I handle this? Attach a copy of our Schedule D and ask them
    >>> to look again?
    >>>

    >> That's what to do, yes. Also make copies of mutual fund 1099b and make
    >> notes as to how to reconcile with the schedule D filed.
    >>

    >
    > UPDATE:
    >
    > So I did that. I answered each item on the CP2501 and because there was
    > one minor difference, I attached a amended 1040X (which resulted in no
    > change in the tax, but did change my carry over amount to 2007
    > slightly). I sent that to the IRS by certified mail, return receipt. I
    > received the receipt back on Feb. 28 showing the IRS had received my
    > package.
    >
    > Today I received a CP2000 notice saying that since I DIDN'T reply to the
    > CP2501 at all, I now owe $34,993.
    >
    > Of course I called the information number and after waiting 45 mins.
    > actually got to talk to a live person who verified that they did indeed
    > receive my reply before Feb. 28 but it *was not forwarded* to the
    > examining department *until March 30* (the non-reply notice to me was
    > already in the works by then). They told me just to "ignore" the CP2000
    > notice and I should be hearing from an examiner within 30 days.
    >
    > I am not holding my breath - I am waiting for the next letter saying
    > that I ignored this CP2000 letter and to pay up as now I owe $50,000
    > with interest an penalties.
    >

    I do hope you got the name and badge number of the IRS person with whom
    you spoke and told you you are safe.

    ChEAr$$$$,
    Harlan Lunsford, EA n LA

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2007) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Harlan Lunsford, Apr 11, 2008
    #6
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