Will I get a notice from the IRS?

May 25, 2007 3 Replies

During 2006, wife withdrew a small amount of excess same-year contributions from her SIMPLE IRA. Fidelity performed the transaction and sent a letter at the time indicating the taxable amount (the earnings) of $13. However, when the 1099-R came Fidelity left the "Taxable Amount" box 2a blank. Using TaxAct (and also TaxCut), I couldn't find a way to get the taxable amount ($13) onto the correct line of Form 5329 (line 1 and then 3) UNLESS I put the $13 into Box 2a of the 1099-R worksheet provided by the software. So, when I e-filed, the 1099-R that I completed in the software didn't exactly match the 1099-R that Fidelity filed. But, the penalty of $1 did correctly appear on 1040 line 60. Do I have anything to worry about. And, if so, how long do they normally take to discover such things?



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You have nothing to worry about.

You may get an IRS letter. If so, either respond with the payment they compute in a timely manner or give them the explanation you gave above. On such a small amount I would expect a very tiny amount if a letter is sent at all and its usually easier just to pay it and get it behind you than playing letter tag with them on such a small matter. Mike

Never fear; the end is not near. You handled it correctly and IRS cares little about such incongruity. ChEAr$, Halan Lunsford, EA n LA

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