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IRS audit help - disputing IRS bill
Posted on 1/15/21 at 10:05 am
Posted on 1/15/21 at 10:05 am
So I got audited and I didn't report my HSA distributions in 2018. I think this was my first year with a HSA and I guess I didn't think you had to report nontaxable distributions.
Well the IRS now sent me a bill that I owe because they are assuming my distributions were taxable, and of course, this was the year my wife had surgery and was pregnant, so the medical bills were pretty substantial that year, and thus, the IRS bill is pretty substantial if you include all the penalties.
Anyways...I can challenge the bill and I have all of my monthly statements for the year that show all the distributions are for medical purpose and are non taxable.
This should be sufficient...yes? Just want to make sure I'm not missing anything or if anyone else has had success disputing the IRS...
Well the IRS now sent me a bill that I owe because they are assuming my distributions were taxable, and of course, this was the year my wife had surgery and was pregnant, so the medical bills were pretty substantial that year, and thus, the IRS bill is pretty substantial if you include all the penalties.
Anyways...I can challenge the bill and I have all of my monthly statements for the year that show all the distributions are for medical purpose and are non taxable.
This should be sufficient...yes? Just want to make sure I'm not missing anything or if anyone else has had success disputing the IRS...
3
Posted on 1/15/21 at 10:10 am to Salmon
The statements should work, but if you have access to the actual bills and want to remove any doubt the IRS doesn't screw up their review it wouldn't hurt to include them.
Posted on 1/15/21 at 10:42 am to SLafourche07
I thought about trying to obtain all the bills but there are like 30-40 and I only have till Feb 1st to respond
not sure if its worth the hassle...
I know I didn't keep them so I'd have to see if the hospital still has them
not sure if its worth the hassle...
I know I didn't keep them so I'd have to see if the hospital still has them
Posted on 1/15/21 at 11:00 am to Salmon
You can always send the bills after you send in your response statement; whether or not they ask. I would try to get as many of the bills you can before 1/31. If you do not have 100% of them, just send the statement alone.
Once you have 100% of the bills, I would make copies and send with a copy of the original statement you will send on 1/31. When you send the bills, you will want to create a cover page itemizing the details. Date, Amount of bill, what it covered (surgery, pregnancy, prescriptions, OTC meds...), and a column stating what each bill specifically covered (i.e., surgeon, anesthesiologist, meds, room...). Make it as simple as possible.
Once you have 100% of the bills, I would make copies and send with a copy of the original statement you will send on 1/31. When you send the bills, you will want to create a cover page itemizing the details. Date, Amount of bill, what it covered (surgery, pregnancy, prescriptions, OTC meds...), and a column stating what each bill specifically covered (i.e., surgeon, anesthesiologist, meds, room...). Make it as simple as possible.
Posted on 1/15/21 at 11:05 am to Weekend Warrior79
ok I'll start the process of obtaining all of the bills, just in case
but I like the cover letter idea
I think I'll do that for the statements as well, list all of the distributions and show that they equal the total of distributions reported
but I like the cover letter idea
I think I'll do that for the statements as well, list all of the distributions and show that they equal the total of distributions reported
Posted on 1/15/21 at 12:47 pm to Salmon
There is some good advice here. I would also fill out a copy of Part II of Form 8889 and send that in with it.
You can also try to call the IRS and ask them for more time, if you can get through, they will probably give you an additional 30 days without much fuss.
You can also try to call the IRS and ask them for more time, if you can get through, they will probably give you an additional 30 days without much fuss.
Posted on 1/15/21 at 3:41 pm to Salmon
I don't want to jinx you, but I'd have no worries about getting the balance adjusted if I was you. Seems like you're on the right track. Good luck!
Posted on 1/15/21 at 3:59 pm to Salmon
quote:
So I got audited and I didn't report my HSA distributions
Hmmmm....need to go see if I’ve filed an 8889.
We have an administrator and have to submit receipts to them. Hopefully those printouts would be sufficient.
ETA: Mine is an FSA, just have to submit form 2441 for my dependent care portion.
This post was edited on 1/15/21 at 4:10 pm
Posted on 1/15/21 at 5:28 pm to LSUKTR
quote:
Mine is an FSA, just have to submit form 2441 for my dependent care portion.
If you had dependent care deductions taken out of your paycheck, and you don't file 2441, you will get a letter, FYI
Posted on 1/15/21 at 9:15 pm to LSUFanHouston
quote:
If you had dependent care deductions taken out of your paycheck, and you don't file 2441, you will get a letter, FYI
Just looked through my 179 page return, looks like it was in there. Added that to my list of annual checks.
Posted on 1/15/21 at 9:58 pm to Salmon
The IRS probably just wants the Form 8889, not all your HSA statements and medical bills.
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