Received a weird audit letter from the IRS about my 2016 tax return.
We converted some Trad IRA money to Roth, and then recharacterized part of it back, all in that year. Our return was correct, with the 1040 and 8606 showing the right amount of the net conversion.
Yet the audit letter is claiming that the recharacterized amount should have been included in taxable income and now they want the unpaid tax and interest on that amount.
The strange part is that even the detailed information in the audit letter acknowledges that the 1099 for the recharacterization showed Code N in Box 7, which is a recharacterization.
I'm not concerned, and will reply with the details, but it looks as if their computer simply had a hiccup when it processed the return.
Could I be missing something?
We converted some Trad IRA money to Roth, and then recharacterized part of it back, all in that year. Our return was correct, with the 1040 and 8606 showing the right amount of the net conversion.
Yet the audit letter is claiming that the recharacterized amount should have been included in taxable income and now they want the unpaid tax and interest on that amount.
The strange part is that even the detailed information in the audit letter acknowledges that the 1099 for the recharacterization showed Code N in Box 7, which is a recharacterization.
I'm not concerned, and will reply with the details, but it looks as if their computer simply had a hiccup when it processed the return.
Could I be missing something?