Question

CP2000 Question IRA Contribution

Forum|Forum|2 years ago
September 10, 2023
1 reply
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I received a CP2000 notice from the IRS where they adjusted (increased) my income by $12,000, the amount my wife and I each contributed to our IRA. We made the deductions in our tax return, but the CP2000 notice wanted to change the deductions to 0. They said their proposed adjustment was triggered by the Form 5498 documents that were reported by our financial institutions. This leaves me baffled as the Form 5498 documents from our financial institutions show that we contributed the proper amount to our annual IRA.

I called the IRS and the representative's response was for me to disagree with the CP2000 notice and send in my Form 5498 documents as proof. But I'm still confused because I don't think I completely understand the situation and/or haven't received an adequate explanation of the situation. Why would a Form 5498 that clearly shows we made our maximum IRA contributions lead the IRS to remove our deduction?

N

NCPERSON1

@jenandjj

were you eligible for the IRA contribution?

and when you say "our IRA", you really mean $6000 to EACH of your RESPECTIVE IRAs?

you can't contribute $12,000 to ONE IRA and an IRA is for the benefit of ONE of you; a single IRA can't have TWO beneficiaries..

J

jenandjjAuthor

Thank you for your response. Yes, we each made $6000 contributions to our respective IRAs.

I'm hoping your explanation is the correct one as that is all I can think of too. I just assumed that the IRS wouldn't make such a blatant and costly mistake.

M

Mike9241

The 5498 will reflect the IRA contributions. the issuer has no way of knowing whether or not you are qualified to make the contributions. This doesn't mean the IRS is correct only to clarify what the 5498 represents. IRA rules are contained in PUB 590-A but if you used Turbotax, then the questions it asked should have alerted you to any excess contribution.