Other Tax Questions
Questions and comments on other topics covered in Fairmark.com, such as UTMA accounts, and any tax questions that don't fit our other categories.
Need help in addressing an absurd IRS dilemma concerning 8606's from prior years that were mistakenly never submitted.
Posted by: provlima, April 11, 2017 04:10PM
I made my first IRA RMD in 2016 at the age of 71, and in filing my 8606 for 2016 reflecting the distribution, realized that nondeductible IRA contributions were required to be reported on 8606 forms in years I made them.

I have read in this forum that the IRS accepts past 8606's that were erroneously not submitted without requiring amended 1040's.

I submitted the 12 8606s in January of this year, and the IRS responded asking me to also submit amended returns for the years 1998 to 2009 the for the years that the 8606's were mistakenly never submitted.

I have no copies of those old 1040's, and the IRS cannot provide them as they are over seven years old.


My inability to retrieve the original 1040's and copy the figures that would have no affect on my taxes for those years would result in my owing thousands of dollars in uneeded income taxes as I withdraw my RMDs in the future, negating decades of using IRA account tax benefits.

I feel like I'm dealing with an inexperienced clerk at the IRS Service Center in Memphis, who opened the 8606's that I submitted, and did not understand the absurd catch 22 situation he was creating.

Any help or advice in resolving this dilemma would be greatly appreciated

Re: Need help in addressing an absurd IRS dilemma concerning 8606's from prior years that were mistakenly never submitted.
Posted by: triad, April 11, 2017 08:30PM
I guess you failed to read my prior response.

In your situation, the 1040X is incredibly easy to fill out. You SKIP all of the numbered lines because the 8606 does NOT impact the numbers on the tax return. This is mentioned in the instructions for the 1040X.

You enter your name, address and year on front.
You explain on back and sign. Attach to the 8606 and send. I would probably put together one little envelope for each and send them all in one big envelope.

PAGE SIX of 1040x instructions:
You are providing only additional information. If you arenít changing any dollar amounts you originally reported, but are sending in only additional information, do the following.

Check the box for the calendar year or enter the other
calendar or fiscal year you are amending.

Complete name, current address, and SSN.

Check a box in Part II, if applicable, for the Presidential Election Campaign Fund.

Complete Part III, Explanation of changes.

Re: Need help in addressing an absurd IRS dilemma concerning 8606's from prior years that were mistakenly never submitted.
Posted by: provlima, April 11, 2017 09:21PM
Thank you very much for your reply!
Looked back on my prior, but did not see your post.
You have made my month! I will follow your advice and send the ammended 1040X's out tomorrow.
Can't thank you enough!!

Re: Need help in addressing an absurd IRS dilemma concerning 8606's from prior years that were mistakenly never submitted.
Posted by: Alan S., April 12, 2017 11:07PM
Or simply send the 8606 forms back to the IRS as is if you do not wish to humor this examiner who does not seem to understand years of IRS policy regarding 8606 form acceptance. A different examiner is likely to accept your forms the second time.

Message boards indicate that plenty of people are sending in these forms on a stand alone basis and you are the only one that reports this response.

That said, there is a one in a million chance that this examiner is smarter than all his co workers. Under RR 82-49 a taxpayer is not eligible for later credits that would have been applied had the taxpayer filed original returns correctly. This means that had you taken a distribution in any year since the year of the first delinquent 8606, you would have paid less taxes and applied some of this basis. RR 82-49 essentially would have you losing any basis that should have been applied to any of those distributions. This applies to closed years as well as the 3 open years. The long shot is that the examiner is smarter than his cohorts and wants to see how much of the basis you are sending in should be disallowed due to distributions you took.

I will bet on the former, not on the long shot scenario.




Sorry, only registered users may post in this forum.