CP-11 notice from the IRS

[Peter]

I recently received a CP11 notice from the IRS. In essence, this says that there is a mistake on my return and that I owe them money. It’s not a large amount; changes a $71 refund to a $29 liability.

I think they have it wrong. So does TurboTax. Question is, what to do?

They give a phone number to call, but the voicemail maze didn’t lead to any actual person. The other option is to write them a letter.

Has anyone been through this? I’m somewhat tempted just to pay the extra and be done with the hassle.

 

[RunningBum]

I got a CP2000 once, because my 1099 stock sales that they received notice of didn't match what I reported. They are basically the same thing. CP-11 is for a miscalculation. CP-2000 is for mismatch of information.

I found what I had missed and amended my return to report the missing sale and correct basis but they still didn't match and I couldn't find another missing sale. I sent a letter with my amended return and the replied back that I was still missing that amount I couldn't find. I made a call which was answered by someone who actually had access to my case and within a minute or two of hearing me out was stepping through the sales that had been reported to them. She made a note in my case that I now had everything accounted for and said to reply to the last mail I had gotten to them referring to our conversation, and that took care of it.

So, it is possible to get these resolved. Too bad your phone call didn't get through to the right person. I'd probably try a letter or another call, especially if it's pretty easy to explain the difference. There is some amount I'd just pay, but $100 is worth an effort to me. If it's not to you, pay it and forget it. Also, if you are at all worried about anything else on your return being scrutinized more closely, I'd just pay it, because it could lead to a full audit.

 

[Texas Proud]

You can get in touch with Turbo-Tax and use their guarantee...


Have you tried the calculation yourself It really might be an error....


If the hassle is not worth the $100, just pay it and be done....

 

[rodi]

We had something similar several years ago - I sent back the proper forms and called the number. They explained what I had done wrong. (In my case I had filled out something wrong in the sale of some ESPP shares.) Once they explained it - I sent them the check.

 

[Peter]

Thanks for the responses.

Texas Proud, I had forgotten about the TurboTax accuracy guarantee ... that seems to be the way to go, even though I'm pretty sure it's the IRS at fault, rather than TurboTax.

RunningBum, the possibility of triggering a full audit is one of the reasons I'm reluctant to pursue the issue with the IRS. Not that I'm doing anything wrong, as far as I know, but still ...

 

[ziggy29]

I got one of these with a $31,000 "bill" in 2007 for the 2005 tax year. It turns out it was my error; I did a cashless exercise of stock options in 2005, for $88K of total stock value, that yielded about a $9,000 profit (and I paid about $2,000 out of the proceeds for federal tax and it was already reflected in my W-2 income and taxes paid).

I forgot to include the transaction on Schedule D, probably because it had a net zero impact on taxes (i.e. after taxes were paid my sale price was my cost basis). The IRS saw it, assumed 100% of the $88K sale was taxable income and computed a $31,000 bill (including interest).

Fortunately one 10 minute phone call to a surprisingly nice and helpful IRS agent cleared it up, and a week later I had a letter from the IRS saying my situation was marked as closed and resolved. (Recommendations about records retention aside, I am *never* destroying my 2005 tax records or that letter.)

 

[GrayHare]

Be aware there are many hoops to jump through to claim the Turbotax guarantee. I believe one is you have to file the claim with Intuit (Turbotax) before you reply to the IRS. The details are online but IMO Intuit makes the process more trouble than it's worth except for large $ amounts.

 

[scrinch]

I've had 4 such letters from the IRS over the years. Twice I was in the wrong, once the IRS was mistaken, and once I was in the right but it was so convoluted and time consuming to prove that I just wrote the check anyway. If those are your odds and the settlement only costs $100, I'd just settle with them and be done with it.

 

[Free To Canoe]

I recently received a CP11 notice from the IRS. In essence, this says that there is a mistake on my return and that I owe them money. It’s not a large amount; changes a $71 refund to a $29 liability.

I think they have it wrong. So does TurboTax. Question is, what to do?

They give a phone number to call, but the voicemail maze didn’t lead to any actual person. The other option is to write them a letter.

Has anyone been through this? I’m somewhat tempted just to pay the extra and be done with the hassle.

The way to get through the phone system is to get where it wants a response from you. Then don't do or say anything, no matter how it pleads for a response. You will get to a person. I tried it with the IRS general number and it works.

 

[harley]

$71 is a cheap cost to avoid the stress and hassle of dealing with the IRS. You can fight it and will probably win, but for such a small amount I'd just pay and walk away. Some things just aren't worth it.

 

[rothlev]

Did you read the whole notice. Normally these notices explain exactly what the discrepency is between their figures and yours.

 

[Peter]

Thanks to all for the additional comments.

Rothlev, yes, it's very clear where the discrepancy lies. Turbotax is applying a prior year HSA overcontribution to 2012 HSA contributions. And we do not go over the limit, so as far as I can see it should be OK.

I don't know if this notice was automatically generated, or if someone has looked at the return. If the latter, then perhaps they just saw the deduction on the 1040 and didn't follow back through the various forms and worksheets.

At any rate, I'm going to pay the requested amount, and see if Intuit will pay up. If they don't, it's not a big deal. And if by chance the IRS realizes they are wrong, then I'll get it refunded.

 

[JoeWras]

The way to get through the phone system is to get where it wants a response from you. Then don't do or say anything, no matter how it pleads for a response. You will get to a person. I tried it with the IRS general number and it works.

Or as we learned on the "Begging" thread, just yell "Atlanta, Chicago, Sheboygon!" and it will give up and put you to a person. That apparently works with panhandlers.

 

[FreeAtLast]

I got the same notice a few years ago. The amount in question was under $50 so I just paid it.

 

[Free To Canoe]

Or as we learned on the "Begging" thread, just yell "Atlanta, Chicago, Sheboygon!" and it will give up and put you to a person. That apparently works with panhandlers.

I was trying to be helpful. Keep trying to be funny.