I'm puzzled: IRS wants me to submit 1099s

[lucky penny]

I'm expecting a large refund for my 2021 taxes. For the previous 2 yrs I had withheld too little since I wasn't sure how the taxes would play out in the first years of retirement & ended up owing a substantial amount, so this time I over-compensated. Instead of paying estimated taxes, I increased the withholding in my pension as well as my RMDs (for my IRA & deferred compensation accounts).

I just got a letter from the IRS asking me to submit the 1099-Rs showing the amounts withheld. I'm surprised -- doesn't the IRS automatically get 1099s? Isn't that how they know when to question the amounts reported as income?

I've always withheld a portion of my IRA RMD & deferred comp & never had an issue. Maybe the IRS is just looking more closely this time since the amounts last year were so much higher?

Is this something I should address in the future? I file electronically & don't think you can even send 1099s when you use Turbotax.

 

[cathy63]

This happened to someone else here, and it also happened to one of the clients at the Tax-Aide site I volunteer at.

It's some strange thing the IRS is doing this year. Apparently someone thought sending letters asking for even more mail would be a good way to keep everyone busy.

They definitely do get the 1099s that show withholding; you can see them if you pull a transcript by logging into IRS.gov. I don't think there's anything you can do in the future to prevent it.

 

[ERD50]

I'm expecting a large refund for my 2021 taxes. For the previous 2 yrs I had withheld too little since I wasn't sure how the taxes would play out in the first years of retirement & ended up owing a substantial amount, so this time I over-compensated. Instead of paying estimated taxes, I increased the withholding in my pension as well as my RMDs (for my IRA & deferred compensation accounts).

I just got a letter from the IRS asking me to submit the 1099-Rs showing the amounts withheld. I'm surprised -- doesn't the IRS automatically get 1099s? Isn't that how they know when to question the amounts reported as income?

I've always withheld a portion of my IRA RMD & deferred comp & never had an issue. Maybe the IRS is just looking more closely this time since the amounts last year were so much higher?

Is this something I should address in the future? I file electronically & don't think you can even send 1099s when you use Turbotax.

Question: Are you saying you reported the 1099's, and (as far as you know), the numbers match what would be sent to the IRS from the source?

That's curious. At first I sort of misread your post, but then I realized we don't send in copies of 1099's, we only report them and they need to match what the IRS received from the source. So why would they ask for copies from you?

I guess I'd jump through the ID.ME hoops (I failed my first go-around), and as Cathy63 suggests, pull the data from there. Then I guess you could tell the IRS, "yes, here are the copies I downloaded from your site!".

This is really getting crazy!

-ERD50

 

[TheWizard]

Just tell them NO, I'm not submitting any 1099's, you already have them!
Dare them to come after you!!

 

[Jerry1]

Just tell them NO, I'm not submitting any 1099's, you already have them!
Dare them to come after you!!

Sure. For a few minutes if time and the price of a stamp, he should piss off the IRS. That’ll work.

Just submit them and move on. Some bot pulled your data based on some algorithm and they need to follow through.

 

[Montecfo]

I think 1099s that have tax withheld have always been required to be attached.

The process of matching 1099s to the return comes much much later than the process of issuing a refund of overpaid taxes.

So yes, they get copies of 1099s and they need the ones with tax payments included in order to issue a refund timely.

Can't address the differences between electronic and paper.

 

[TheWizard]

Sure. For a few minutes if time and the price of a stamp, he should piss off the IRS. That’ll work.

Just submit them and move on. Some bot pulled your data based on some algorithm and they need to follow through.

NO!
Tell them, We'll see you in Tax Court!!

 

[cathy63]

NO!
Tell them, We'll see you in Tax Court!!

lucky penny says she is expecting a large refund. The IRS wouldn't take her to tax court, they'd just hold up her refund. Sending in the docs would be the fastest way to get it.

 

[cathy63]

I think 1099s that have tax withheld have always been required to be attached.

The process of matching 1099s to the return comes much much later than the process of issuing a refund of overpaid taxes.

So yes, they get copies of 1099s and they need the ones with tax payments included in order to issue a refund timely.

Can't address the differences between electronic and paper.

You only attach 1099s if you paper file. If you e-file, you don't send them in, just like you don't send in your W-2s if you have a job and you e-file.

The letter I saw went to someone whose return I e-filed, and I think the person in the other thread here also said he e-filed his return, so this does seem to be something new they're doing.

 

[Montecfo]

Yes I was speaking of paper filing. I'm not sure how they have reengineered the process to allow payments to be matched prior to refunds being issued, but it appears that process has become manual for some reason. But the wholesale matching process to info returns comes later.

Thanks for pointing that out, cathy63.

 

[lucky penny]

I think 1099s that have tax withheld have always been required to be attached.

I am flummoxed & humbled. I was prepared to say this can't be right, but now I'm poking around & finding that Turbotax apparently says you need to submit 1099-Rs showing taxes withheld.

I have never done that, & I've been using Turbotax & withholding taxes on RMDs for years.

I have no idea how to send the IRS a 1099 if I file electronically -- does this mean that I can use Turbotax but will have to print the return & file it by mail along with the forms they want? Oh well, I've got a year to figure this out before filing next time. I will probably call Turbotax -- I've done that occasionally & usually get someone pleasant & knowledgeable.

In the meantime, I'll respond to the IRS & mail the forms they want tomorrow. I filed my return on March 1 & have been expecting that refund for weeks. The IRS letter says that if the amount is correct (& it is!) it will be sent 6-8 weeks after they get my response.

 

[Jerry1]

When you “print” your return and save it as a .pdf, there is an instruction page that Turbo Tax generates. Did it tell you to file (send in) your 1099’s? If so, it would have told you where to send them.

For now, just file them the way the IRS instructed you to in their letter.

FWIW, I’ve had certain stock transactions where I didn’t want to enter the detail into the return. When you do that you send in a form even if you electronically file. A little different than your situation, but not necessarily uncommon to have to send something in even when you e-file.

 

[Freedom56]

When you e-file you either manually enter your 1099-R information into your tax software or downloaded the date from the trustee site that issued your 1099-R. There must be a discrepancy in either the taxable amount (Box 2a), federal tax withheld (box 4), or state tax withheld (Box 14) between what you entered and filed with your return and what was actually on your form. You should review the amounts again on your filed return versus the 1099-R you received. I would recommend sending the IRS a copy of your 1099-R or if you do find a discrepancy file an amended return.

 

[lucky penny]

When you “print” your return and save it as a .pdf, there is an instruction page that Turbo Tax generates. Did it tell you to file (send in) your 1099’s? If so, it would have told you where to send them.

For now, just file them the way the IRS instructed you to in their letter.

FWIW, I’ve had certain stock transactions where I didn’t want to enter the detail into the return. When you do that you send in a form even if you electronically file. A little different than your situation, but not necessarily uncommon to have to send something in even when you e-file.

Thanks Jerry. I just read the "Filing Instructions" in the pdf I saved & it says nothing about filing the 1099s.

Can you briefly explain the logistics of sending in a form when you electronically file? Do you mail the form with a hard copy of the return, a letter, or something else?

I started increasing the withholding on my RMDs instead of filing estimated taxes several years ago after seeing that suggestion here. It seemed like a great idea & others seemed to agree, but I don't recall seeing any warnings about "be sure to file those pesky 1099s with the IRS." If I'm doing this wrong I'm sure I'm not the only one, & when I figure this out I will spread the word!

 

[cranberryjoe]

Is it possible you entered the wrong amount withheld, such that it doesn't match the 1099-R the IRS has? That's the only reason this request makes sense to me. Of course, what do I know?

 

[lucky penny]

Is it possible you entered the wrong amount withheld, such that it doesn't match the 1099-R the IRS has? That's the only reason this request makes sense to me. Of course, what do I know?

I double-checked the numbers I reported & they are correct.

Doesn't make sense to me either, unless it turns out that I really was supposed to submit the 1099-Rs.

Interestingly, they did not ask for the SSA-1099 which shows withholding on Social Security. Guess they have that one.

 

[Sunset]

....
Can you briefly explain the logistics of sending in a form when you electronically file? Do you mail the form with a hard copy of the return, a letter, or something else?

...

When e-filing, one does not send in any paperwork.

When the IRS sends a letter, I photocopy the letter, attach my own letter summarizing my reasoning or explaining why I did something, and then attach photocopies of the papers they want. I mail that back to them, certified so I have proof I responded.

Don't send in another tax return, they don't want it.

OP is doing nothing wrong having extra withholding, maybe the IRS didn't get or lost the 1099 from the originator, or they are meeting quota for randomly checking on taxpayers.

 

[Jerry1]

Thanks Jerry. I just read the "Filing Instructions" in the pdf I saved & it says nothing about filing the 1099s.

Can you briefly explain the logistics of sending in a form when you electronically file? Do you mail the form with a hard copy of the return, a letter, or something else?

In my situation, I put summary numbers on Schedule D for my stock transactions. That required me sending in my 1099-B’s with all the detail. TT prepared a form and I just mailed the form and my 1099-B’s to whatever address they indicated. Noting special. I was just wondering if they did something similar for you as I had never heard of sending in 1099-R’s.

When e-filing, one does not send in any paperwork.

Never say never - especially with the IRS. There are times you send in some paperwork. Beyond my example above, another more common example is if you owe money, you can send in a check. TT will print out a voucher and give you an address to send it to.

 

[donheff]

I have deducted all of our joint taxes from my pension for years. I covered both our income taxes, DW's self employed payroll taxes, and our dividends and CGs. IRS has never requested a copy. Sounds like they are pestering a few random people this year.

I'm with the just send the form in group. Flipping IRS the bird is a loser's game.

 

[audreyh1]

I am flummoxed & humbled. I was prepared to say this can't be right, but now I'm poking around & finding that Turbotax apparently says you need to submit 1099-Rs showing taxes withheld.

I have never done that, & I've been using Turbotax & withholding taxes on RMDs for years.

I have no idea how to send the IRS a 1099 if I file electronically -- does this mean that I can use Turbotax but will have to print the return & file it by mail along with the forms they want? Oh well, I've got a year to figure this out before filing next time. I will probably call Turbotax -- I've done that occasionally & usually get someone pleasant & knowledgeable.

In the meantime, I'll respond to the IRS & mail the forms they want tomorrow. I filed my return on March 1 & have been expecting that refund for weeks. The IRS letter says that if the amount is correct (& it is!) it will be sent 6-8 weeks after they get my response.

Sounds like that in your case they didn’t receive those 1099s and thus need your copies to complete your return. You just need to follow the instructions in the IRS letter.

We had to send a form in when we filed electronically - a 1098-C. TurboTax printed a form specifically for sending in attachments for electronically filed returns with the box regaled to our form checked and the instructions including the address. After our return was accepted we attached the 1098-C and mailed it in.

The information that we had to do this was included in the instructions that TurboTax generated in the initial pages of our PDF copy of the return.

When e-filing, one does not send in any paperwork.

Not true it turns out. There are some exceptions. TurboTax spelled out what we had to do.

 

[Midpack]

Another reason I’ve eFiled for about 20 years, ZERO documentation required, and the IRS has never asked for any…

 

[lucky penny]

In my situation, I put summary numbers on Schedule D for my stock transactions. That required me sending in my 1099-B’s with all the detail. TT prepared a form and I just mailed the form and my 1099-B’s to whatever address they indicated. Noting special. I was just wondering if they did something similar for you as I had never heard of sending in 1099-R’s.

Thanks -- very interesting to hear this. TT never indicated anything about sending in the 1099s & certainly didn't prepare a form like that. That seems like a pretty good indication that it's not required.

But I'd like to get to the bottom of this so it doesn't become a recurring event, so I just called TT & asked the question. The agent I spoke with seemed to have no idea but said she'd do research & get back to me.

 

[Eagle43]

Same problem here. IRS wanted paper copies of my 1099s. Also they said DW and I had not signed the filing. Irs sent paper copy of our filing. We signed it, attached the 1099s and returned same. Never happened before this year.

 

[lucky penny]

Same problem here. IRS wanted paper copies of my 1099s. Also they said DW and I had not signed the filing. Irs sent paper copy of our filing. We signed it, attached the 1099s and returned same. Never happened before this year.

Eagle, did you originally file electronically or a paper copy of your return? Some have indicated that if you file a hard copy of the return you ARE required to include 1099s that include withholding but that this isn't required if you file electronically.

 

[cathy63]

In the 1040 instructions, under "Assemble your return" it gives these instructions for filing on paper:

Attach Forms W-2 and 2439 to Form 1040 or 1040-SR. If you received a Form W-2c (a corrected Form W-2), attach your original Forms W-2 and any Forms W-2c. Attach Forms W-2G and 1099-R to Form 1040 or 1040-SR if tax was withheld.

For e-filing, the IRS doesn't specifically mention 1099-Rs, but here's what they say about W-2s, which should be the same:

When filing electronically:

- You must provide a copy of your Forms W-2 to the authorized IRS e-file provider before the provider sends the electronic return to the IRS.
- You don't need to send your Forms W-2 to the IRS and should keep them in a safe place with a copy of your tax return.

The mailing in of other documents, like transaction details when you summarize investments on your 8949 or donation of a motor vehicle to charity on a 1098-C, is different. If you have something like that when you e-file, the software will alert you to print out form 8453, fill it out, attach the relevant docs and mail them to Austin, TX. This form is not used for sending in 1099s or W-2s.