CP2000 for 2017 showing missing interest, dividends and a 1099R from Charles Schwab, but the IRS tax computation is different than the tax program

[Just-Lisa-Now-]

We agree with the missing income, but when I enter it into the 2017 program the tax computed is different than the CP2000.   The QDCGT worksheet comes up with a different figure than the IRS computed on the notice...is that common?

This missing Schwab statement also had some stock sales that we forgot, but they're not shown on the CP2000, the net profit is only $140 and they all had basis reported to IRS, but the only way I can get the income on the return to match the "as corrected by IRS" income on the CP2000 is to leave out those stock sales.

I think the IRS computers have gone bonkers.

[TaxMonkey · Accepted solution]

IRS will routinely omit transactions below certain dollar thresholds.

[Just-Lisa-Now-]

They had 3 different interest amounts of $4  $7 and $18 listed in the CP2000, I'd only caught the $4 and had rounded it to $5 since it was 4.89, and the $18 one.  So we missed the $7.

Weird!

[George4Tacks]

IRS historically truncates, rather than rounding. Their itty bitty computer brain has not learned how to round numbers.

[itonewbie]

Maybe they are still using 486 for PCs.

[poolcleaner]

XT?

[itonewbie]

Antique.

[itonewbie]

But that was top of the line back then.

[Just-Lisa-Now-]

The good old days, no point and grunt, spelling and punctuation counted!

[IRonMaN]

Maybe the IRS is using Drake to process their returns.

[Just-Lisa-Now-]

LOL

[abctax55]

Any of the distributions capital gain distributions?  Maybe the IRS missed that and the tax *nets* to the difference?
Or - the IRS is just wrong in how they entered the covered transactions (missing that huge gain?)
Or - it was a full moon when they issued the notice?

[poolcleaner]

What about a Sch D loss carryforward?.  The IRS has a tendency to ignore those in their calculations.

[Just-Lisa-Now-]

No capital gain distributions, no loss carry forwards.  Ordinary dividends with some of them qualified, but the CP2000 showed how much was qualified.

I went ahead and entered the missing things the CP2000 showed, and picked up $126 in foreign tax paid on the Schwab statement (IRS didn't have this on the CP2000 either), sent a detailed letter of explanation along with the QDCGT worksheet, client is sending a check for what we came up with.   Guess we'll see what happens!

[poolcleaner]

:+1:

[sjrcpa]

That's what I would do @Just £isa Now!