irs

L1: irsHello,
Got a examination letter from IRS-scared me to death. 1099-r coded 1, so they hit me with 10% penality and interest. I didn’t notice that TurboTax had not included the form 5329 in filing. I will be calling them and wanted heads up if you think any might be needed…all paperwork in place since 2006-all payment sepp and Vanguard will not code 1099-r with a 02 only 01- so I am sure that flagged IRS? Any input would be appreciated, somewhat nervous. Just want this to be easy, ha. J2010-10-29 01:23, By: Joe, IP: [97.73.64.142]

L2: irsYou have to actively trigger the 5329 in Turbo tax, but unless there is some other issue with your plan, this is very easy to address. Just file a stand alone 5329 for the appropriate year, and indicate exception code 02 on the form. Then return it with a letter to the exam response address and request that the IRS drop the request for a penalty.
Vanguard discontinued the underwriting of your plan distributions some time back and all Vanguard SEPP participants have to file the 5329 every year with their return. If this applies to more than one year, file a stand alone 5329 for each year separately.
What is really questionable here is that the IRS seems to only be charging the penalty for one year in many of these cases, when a busted SEPP triggers a retroactive penalty and interest for all years back to day one. I suppose that was the case here as well?

2010-10-29 03:30, By: Alan S., IP: [24.116.165.60]

L2: irsIf you run into trouble withthe IRS, you could always try the Geithner Turbo Tax Excuse. He had a great deal ofsuccess with it 2010-10-29 22:23, By: Gfw, IP: [24.148.10.164]