IRS notice regarding community property allocation

[ptax255]

Hi, client received a CP2000 and all the differences were regarding form 8958 community property allocation. This was e-filed with the return, at least I see it completed (Proseries Basic).

Has anyone seen similar issues? How did you handle the notice?

Is there a way to get a confirmation of the forms e-filed?

Thanks!

[sjrcpa]

Respond to the notice explaining the community property allocation and attach the form. Mention it was attached to the return as filed.

[BobKamman]

Just out of curiosity, which Service Center issued the CP-2000?  One that is not in a community property state, by any chance?  One explanation is that the clerk processing the return finished training last week and was out of the room during the five minutes community property was discussed.  But another explanation could be that not all of the 1099 and W-2 income was split on the 8958.  The manual says that, in such cases, include all the income in the proposed assessment:

(10) On an individually filed tax return, if there is partially reported income/deductions and the taxpayer resides in a community property state as listed in (3) above, determine if the AUR condition is the result of the income allocation.

1. Consider the information return fully reported if attached statements/worksheets or Form 8958 identifies the income was allocated between both spouses (including RDPs).

2. If the discrepant information return is not addressed in the attached statement/worksheet or Form 8958, pursue the full amount of the income.