Surprise from the IRS re:CP2000

If you chose to fill out your tax return without reading the instructions that's your decision, but why blame your lack of knowledge on the IRS?

I am now looking at the 2008 Form 1040 Instruction booklet, a massive volume that costs us taxpayers quite a bit, so that taxpayers can read and understand how to fill out their tax returns.

I am looking at both the 2007 and the 1008 Form 1040 instructions, as the following quotes are the same for each year.

On page 21 of the 2008 (page 19 of the 2007) instructions, for Form 1040 line 9a (ordinary dividends) it says

"Each payer should send you a Form 1099-DIV. Enter your total ordinary dividends on Line 9a. This amount should be shown in box 1a ofForm(s) 1099-DIV>"

On that same page of the instructions, it covers Line 9b, Qualified Dividends:

"Enter your total qualified dividends on Line 9b.... Generally, these dividends are shown on box 1b of Form(s) 1099-DIV."

It then explains that in some cases you do not report the qualified dividends.

Common knowldge? I have yet to find a tax preparer who does not know this. And anyone who took the time to just read those few sentences would now know how to report both ordinary dividends and also qualified dividends.

OK, which sentence posted above, taken directly from the IRS instructions, did you find not to be clear?

Yes. The Congress, not the IRS, created the notion of a Qualified Dividend as well as an Ordinary Dividend. The IRS created the forms for payers to report these to you, and for you to report these to the IRS.

In my own opinion, the instructions shown above are pretty well understood, but if you cannot understand the instructions, I recommend you seek professional tax preparation help.

You should not have had your tax refunded unless your taxable income even with ordinary income was zero.

Wait and see.

You asked several times for "comment on this."

Well, here it is. "Whatever CAN go wrong, WILL go wrong." I seem to remember that is SOMEBODY's law. Ah yes.. right. . Murphy's law.

ChEAr$, Harlan Lunsford, EA n LA

Another comment: this is yet another good reason returns should be e-filed. This mistake most likely never would have made it to the IRS in the first place had free e-file been the filing method.

What about the state return? Might need to amend that one to pay any additional tax owed.

-Mark Bole

snipped-for-privacy@panix.com (Arthur Kamlet) wrote in news:h01eg1$ibg$ snipped-for-privacy@reader1.panix.com:

I'm sure you know a lot more about taxes than I do, but I had already read those sections. Nowhere did I see (AFAIK as I said) to put the same data from line 9a also on 9b. That is the correct way, but nothing says that.

ms

It says

Enter your total ordinary dividends on Line 9a.

What is not clear about that? Why did you think it meant

Don't Enter your total ordinary dividends on Line 9a?

You know, it's clear to you and it's clear to me but to a person just reading the 1040 form and instructions for the first time, they might simply guess that "ordinary dividends" and "qualified dividends" are two mutually exclusive categories.

They'd be wrong, but it's not exactly illogical.

The IRS could have, should have, said "ordinary dividends include qualified dividends". It does not look like they did so, in the basic instructions.

The "hint" is that the qualified dividend box is off to the left of the main column of figures. That usually means it's a sub-amount to something in the main column, rather than its own amount.

Steve

You're making this way too complicated. The payer who issued the

What is so hard about including Box 1a where the instructions say to, and Box 1b where the instructions say to?

-Mark Bole

You're making this way too complicated. The payer who issued the

What is so hard about including Box 1a where the instructions say to, and Box 1b where the instructions say to?

-Mark Bole

snipped-for-privacy@speedymail.org (Steve Pope) wrote in news:h02bn7$2d3$1 @blue.rahul.net:

Thank you, you defined the issue better than I did. My investment company provides a 1099-DIV that lists the qualified dividends in one column, the same number as ordinary dividends in another column. Being a senior with bad sleep, I neglected to contact them to ask why they repeat the data in that manner, that would have hopefully cleared it up.

But I've read the IRS 525, 550 and 564 pubs as well as the 1040 data and nothing defined it as clearly as the IRS guy's statement "all dividends are ordinary dividends".

I had to quickly amend the 2008 return before 4/15, and my state return, and my state 2007 return.

IMO, it is still not understandable that the IRS returned the entire 2007 payment, and now sends me a letter.

ms

While waiting for additional correspondence from IRS, you could request a transcript of your 2008 account (call

paultry wrote in news:h03i50$jfe$ snipped-for-privacy@news.eternal-september.org:

Thanks, I did get to Accounts, after a 15 minute wait, I did talk to a IRS rep, got cut off, repeated it and decided after the projected wait, gave up. As a senior, life is too short.

ms

. . .

It says to copy box 1a of the 1099-DIV to Line 9a, and copy box 1b of the 1099-DIV to Line 9b. Did you get 1099-DIV forms? Were they inaccurate?

There's nothing about "the same data". It's different data, appearing in different boxes on the 1099-DIV. The numeric values happen to be the same in a lot of cases.

Seth