Help with IRS "request for information"

[JeffW]

After 45 minutes on old, thought someone at TUG might be able to help.

Got a request in the mail to explain two lines on my 1040 form:

1. First is line 63 on 1040, Schedule M. Apparently this is the Making Work Pay credit. I never heard of it before, and it looks like Turbo Tax by default gave myself and my wife the credit. Did a little reading on it - seems like most people got it as reduced taxes in their paychecks. How do I determine if that's the case with me?

2. Second is line 40 on 1040, Schedule A. This has a decent amount of info:
- medical expenses
- state, local, real estate taxes
- home mortgage interest
- gifts to charity

What level of detail do they want? For example, do I need to show EVERY medical expense? Copies of every check to my church? I have a rough breakdown on those costs (either in Turbotax worksheets, or in an Excel spreadsheet), not sure they detail they want though.

Thanks.

 

[glypnirsgirl]

I seem to spend most of my working life on hold with the IRS.

Did you happen to take itemized deductions but fail to file Schedule A?

elaine

 

[JeffW]

No. Pulled up my Turbo Tax .pdf file for federal submission, it has a 1040, Sch A, Sch M. Pretty sure that's what I mailed them.

Schedule A values aren't significantly differnent than I've claimed the past couple of years.

Jeff

 

[Talent312]

You are being asked to justify each deductions in lieu of an out-n-out audit which could be next, if you fail to satisfy the dog-sniffers. Ultimately, you could be faced with additional tax, interest and penalties.

IMHO, it would behoove you to provide as much detail as possible, including if it helps, a statement from your employer(s) HR office as to whether the credit was given to you, or if not, why not. For each deduction, summaries won't get it. Fill spreadsheet pages with lists of each item used for that deduction, the doc you relied upon and, if possible, attach a copy (ID it with a number).

It does no good to assert that a tax program misled you. Ultimately, you are responsible for knowing what you can and cannot claim. Form 1040X is there to correct errors, and it may be included in your software.

 

[BocaBum99]

After 45 minutes on old, thought someone at TUG might be able to help.

Got a request in the mail to explain two lines on my 1040 form:

1. First is line 63 on 1040, Schedule M. Apparently this is the Making Work Pay credit. I never heard of it before, and it looks like Turbo Tax by default gave myself and my wife the credit. Did a little reading on it - seems like most people got it as reduced taxes in their paychecks. How do I determine if that's the case with me?

2. Second is line 40 on 1040, Schedule A. This has a decent amount of info:
- medical expenses
- state, local, real estate taxes
- home mortgage interest
- gifts to charity

What level of detail do they want? For example, do I need to show EVERY medical expense? Copies of every check to my church? I have a rough breakdown on those costs (either in Turbotax worksheets, or in an Excel spreadsheet), not sure they detail they want though.

Thanks.

I do not know anything about Schedule M, but they should have an instruction page that tells you what they want.

For your line 40, schedule A, I recommend you prepare a spreadsheet with each line item that makes up this number. Describe what the item is, and the back up proof that you incurred that expense. It should either be a check or credit card statement or receipt from the organization.

Print the spreadsheet and attach copies of the receipts, statements or cancelled checks for each item. What that will do is give the IRS agent an opportunity to see the summary of how you rolled up the number. If they see something out of line, they will go to the receipts to ensure you have proof that you paid the item. That seems to work really well for the IRS.

 

[bobcat]

After 45 minutes on old, thought someone at TUG might be able to help.

Got a request in the mail to explain two lines on my 1040 form:

1. First is line 63 on 1040, Schedule M. Apparently this is the Making Work Pay credit. I never heard of it before, and it looks like Turbo Tax by default gave myself and my wife the credit. Did a little reading on it - seems like most people got it as reduced taxes in their paychecks. How do I determine if that's the case with me?

2. Second is line 40 on 1040, Schedule A. This has a decent amount of info:
- medical expenses
- state, local, real estate taxes
- home mortgage interest
- gifts to charity

What level of detail do they want? For example, do I need to show EVERY medical expense? Copies of every check to my church? I have a rough breakdown on those costs (either in Turbotax worksheets, or in an Excel spreadsheet), not sure they detail they want though.

Thanks.

They will want to see all the bills you claimed. If you can not show proof, you will pay taxes. Good luck.

 

[Pat H]

No. Pulled up my Turbo Tax .pdf file for federal submission, it has a 1040, Sch A, Sch M. Pretty sure that's what I mailed them.

Schedule A values aren't significantly differnent than I've claimed the past couple of years.

Jeff

Are you sure you sent the Sched? I'd send the Sched again and see if that satisfies them.

 

[isisdave]

I'm guessing this was for 2009, right?

If you worked and earned wages in 2009, you're entitled to the Schedule M deduction. But if your only income was from pensions or social security, you're not. If you were on SS, you got a different "stimulus" ... an additional $250, if I recall.

Did you have W-2 or self-employment income for the year in question?

 

[JeffW]

I'm guessing this was for 2009, right?...

Letter states: We received your Dec 31, 2010, Form 1040 federal income tax return, but we need more information to process your tax return accurately.

Income was from a standard W-2, as a fulltime employee.

Guess I'll start with my spreadsheets, bills or cancelled checks where easily doable, and see how they respond to that. I'd like to hope if I send them that, and they want even more detailed information (ie. on my charitable contributions), they'll tell me that's what they want, and I don't waste time showing them say medical information.

I don't know if I'm asserting a "tax program misled me". If if gave me credit for something I didn't qualify for, I'm okay with that. My refund this year would have been about 1/3 less than last year. It's not like it was twice as much, with an IRS person, "Didn't you inspect your return to see why it was so much?"

Lastly, since I'm expecting a refund, there's really no penalty involved for this delay, is there? I'm assuming if there are some numbers that get reduced (same the Schedule M credit), worst that will happen is my eventual refund is reduced.

Thanks for everyone's help so far.

Jeff

 

[bobcat]

I would say you will need all your medical bills. I would have them ready if you do not send them to the IRS.

 

[Miss Marty]

Tax Returns

Got a request in the mail to explain
two lines on my 1040 form:

2. Second is line 40 on 1040, Schedule A.

This has a decent amount of info:
- medical expenses
- state, local, real estate taxes
- home mortgage interest
- gifts to charity

Your mortgage company provides IRS Form 1098-Int
to both the person listed (social security #) and IRS
It includes real estate taxes and mortgage interest.

The Form 1098, Mortgage Interest Statement, is used to report interest that a taxpayer has paid on his or her mortgage. Such interest is tax-deductible at the federal level, unless the taxpayer is subject to the Alternative Minimum Tax.

 

[JeffW]

Sort of related to my original 'on-hold' post, is there any advantage to trying to contact the IRS? Would they be able to look up specific information on me, and say, "We are interesed in medical and charity deductions...". Or, will an agent just see the generic "Schedule A, M requests", and say, "you need to provide all documentation to back up every amount?"

Not really fond of sitting on hold forever, but if it narrows down what I need to provide, it might be worth it.

Thanks.

Jeff

 

[bogey21]

Pretty sure that's what I mailed them.

I always file electronically. My belief is that there is less chance of IRS issues if their computer accepts my data.

George

 

[BocaBum99]

Sort of related to my original 'on-hold' post, is there any advantage to trying to contact the IRS? Would they be able to look up specific information on me, and say, "We are interesed in medical and charity deductions...". Or, will an agent just see the generic "Schedule A, M requests", and say, "you need to provide all documentation to back up every amount?"

Not really fond of sitting on hold forever, but if it narrows down what I need to provide, it might be worth it.

Thanks.

Jeff

There is only downside to contacting the IRS. The first time I got audited, I called the IRS to try to be helpful. The IRS agent was confused and since I mentioned another part of my return, she expanded the audit to include that new section. That was my first and last mistake in the area of only answering the questions the IRS asks. Your best bet is to read the IRS request for information literally and provide them exactly what they ask for. You are guilty until proven innocent. You need to prove your innocence.

Your goal is to provide a detailed accounting and proof that you are entitled to a set of deductions. Just provide a line item detail of what you deducted along with receipts, statements or cancelled checks. If you can't do that, then you will just owe more tax. With taxes and penalties, it will be about double what you originally saved.

 

[BocaBum99]

I always file electronically. My belief is that there is less chance of IRS issues if their computer accepts my data.

George

All that will do is ensure you are audited sooner if your return sets off red flags.

 

[BocaBum99]

Letter states: We received your Dec 31, 2010, Form 1040 federal income tax return, but we need more information to process your tax return accurately.

Income was from a standard W-2, as a fulltime employee.

Guess I'll start with my spreadsheets, bills or cancelled checks where easily doable, and see how they respond to that. I'd like to hope if I send them that, and they want even more detailed information (ie. on my charitable contributions), they'll tell me that's what they want, and I don't waste time showing them say medical information.

I don't know if I'm asserting a "tax program misled me". If if gave me credit for something I didn't qualify for, I'm okay with that. My refund this year would have been about 1/3 less than last year. It's not like it was twice as much, with an IRS person, "Didn't you inspect your return to see why it was so much?"

Lastly, since I'm expecting a refund, there's really no penalty involved for this delay, is there? I'm assuming if there are some numbers that get reduced (same the Schedule M credit), worst that will happen is my eventual refund is reduced.

Thanks for everyone's help so far.

Jeff

The IRS will not give you a second chance. They will take your input and then render a judgement on your return. I would do the best job you can on the first try to provide proof beyond any reasonable doubt that the items you deducted are legit. More clarity is better.

You may not know for 6 months what they decide. You will receive mail saying they are complete, though. Either no change to your return or an updated return with a bill for what you owe.

 

[bogey21]

All that will do is ensure you are audited sooner if your return sets off red flags.

You may be right but I believe that eliminating "data imput" errors results in fewer "red flags"

George

 

[PigsDad]

You may be right but I believe that eliminating "data imput" errors results in fewer "red flags"

The OP said the forms were printed out from TurboTax, so the forms would not be manually inputted -- they woudl be scanned which would not have the error issues you fear.

Kurt

 

[NJmom]

I have seen a few of these lately but they seem to be asking for back up for a specific item on schedule A , not everything on the schedule. I had one asking for canceled checks / w-2 s for taxes paid deduction. I agree with the other poster that it sounds like they didn't get you Schedule A and Schedule M. There is also usually an IRS contact. I would ask the question if at all possible before I went crazy looking for canceled checks.
Good Luck

 

[JeffW]

Think at this point it's worth a call to see if they know what they want. Not all of my numbers are 'presentation quality', so I'd hate to spend the time to clean them up if it's what they needed.

Not that it affects this, but my tax return was sent back in May (?), saying it was missing a signature. Both my wife and I signed it, but I guess she didn't put a lot of effort (pressure) into it, as it admittedly looked like it could have been done in pencil. She resigned (right over it), with an updated date next to it.

So, does that mean they didn't even being to process it until after it came back with (to them) a valid signature? Would have been nice if they had sent it back with all the requested information at one time. The delay in receiving the rebate won't kill me, but I hate to think I'll go thru this request for information, and 2 months from now, they'll come back and say, "Now we want this...".

Jeff

 

[bogey21]

The OP said the forms were printed out from TurboTax, so the forms would not be manually inputted -- they woudl be scanned which would not have the error issues you fear.

Kurt

You are correct if scanning is infallable. I have not always found it so. Maybe with the IRS it is. Most likely I am over cautious, but I try to avoid all intermediate steps by going computer to computer. My view in dealing with the IRS is that I want to avoid anyone at the IRS touching anything.

George

 

[cpamomma]

I would call them and get some clarification on exactly what they want. Do not offer any unrelated information. Try to keep on topic as much as possible. Also, make sure to ask for the person's name/employee number. Take notes of the conversation. Good luck!

 

[ondeadlin]

The IRS doesn't release audit data on e-filed returns vs. traditionally filed returns, but they do release data that shows e-filed returns have a much, much lower rate of simple math errors. This makes sense, of course, since the computer does your math for you on e-filing. Something like 20 percent of traditionally filed returns are flagged for math errors.

Here's the real answer to your question: You should speak to a tax attorney or tax accountant. Immediately. TUG is a great resource, and there's great advice on this thread, but what you really need is for a pro to sit down and look at what you filed and tell you what's wrong.

You can't get that here and it's not worth risking doing it yourself.

The few hundred dollars you spend on professional help is well worth it.

 

[glypnirsgirl]

Not that it affects this, but my tax return was sent back in May (?), saying it was missing a signature. Both my wife and I signed it, but I guess she didn't put a lot of effort (pressure) into it, as it admittedly looked like it could have been done in pencil. She resigned (right over it), with an updated date next to it.

So, does that mean they didn't even being to process it until after it came back with (to them) a valid signature? Would have been nice if they had sent it back with all the requested information at one time. The delay in receiving the rebate won't kill me, but I hate to think I'll go thru this request for information, and 2 months from now, they'll come back and say, "Now we want this...".

Jeff

Correct, they do not even ACCEPT a return until it is signed. So they would not examine the return until after it was signed and submitted the second time.

elaine

 

[JeffW]

Called IRS, got the answer. The winner is.....they just need copies of Schedules A & M! Got a nice agent on the phone who said, "Sounds like those pages somehow got separated from your return..." Confirmed that, "I just need to provide the single page forms, not all the underlying data?", she said yes.

I then recounted the May/June incident about them sending the 1040 back for a signature. Thinking about it, I don't remember it being anything else but the Form 1040 pages. She agreed it's possible it could have gotten separated then.

So I just printed out those two pages, put them in the envelope provided, and will put it in the mail this morning.

Thanks to everyone who replied with information. I guess had I just called right at the beginning, I wouldn't have had to start this thread to begin with. But in dealing with the government (especially the IRS), probably not a bad idea to get as much info ahead of time before contacting them.

Jeff