I do my taxes with TT every year. I did my 2016 return using TT Home & Business. I just got a form CP2000 from the IRS saying there's a discrepancy and I owe them several thousand dollars.
I reviewed what they're talking about and it's regarding a form 1099-B from Vanguard. I believe this was imported electronically. I have the form open in TT but not sure how to tell if it was pulled in that way or I entered it manually. I tend to do the import electronically. Anyway, there are two entries on the paper form which we just downloaded and printed from Vanguard. Both entries are for the exchange of funds in a retirement account.
I can see the 1099-B and first transaction in TurboTax, but don't see the second transaction in that 1099-B anywhere in TT. Is it possible TT didn't pull the second transaction in? Was there a bug like this or something at the time?
To make it more confusing, the IRS form seems to indicate they see it somewhere in my return, except the cost basis was used as the proceeds amount and somehow "reported to them by third parties" they have the cost basis as the proceeds. I don't find either number in my form (printing all forms to PDF and searching, don't see a way to search by an amount in TT).
It sounds like there was simply a transaction in your retirement account, which did not need to be reported at all. Just send the IRS the printed document showing the purchase and sale both within the same retirement account. The cost basis, which came from selling the first fund, should be the same as the proceeds, since you took the money from the sale and used it to buy the new fund.
Again, there was no error on the part of TurboTax. Purchases of stock are not reported on your tax. The sale of stocks in your retirement fund should not be reported on your 1099-b. If the transaction involved selling and buying within the same retirement account, there was nothing to report. You could try and get a corrected 1099-b, or you could simply show the IRS balancing purchase and sales in a retirement account.
I just got this same CP2000 telling me I have two weeks to send them $3,000. The data was imported from Compushare. It appears they have the reported data and the data that "I furnished" through Turbo Tax but cannot view on the return or anywhere else to test its accuracy. The IRS is reporting my taxable income from column 1d Proceeds, while the reported values are coming from column 1e Cost basis! The numbers line up if these columns are swapped. Thus two $4,000 options are reported as $0 income. These two items are different than the others in that they are in Box 5 "non covered security" while the others are "Short Term". These Short-Term options are slightly off and the IRS reports this discrepancy. The result is an 8K underpayment and at big bill plus $170 interest. It looks like Turbo Tax made the mistake and there is no way to actually see the numbers to verify them.
It seems that if you have anything but plain vanilla wage and dividend income, it's much safer to get an accountant than do it on your own withTurbo Tax. I've been using Turbo Tax for over 10 years and this really sucks.
Non-covered securities are usually transactions for which the broker does not supply cost data, meaning you have to enter it yourself. Respond to the notice with the cost numbers for those transactions and a copy of your monthly summary from the broker showing the transaction. The transaction was reported in your return according to the import file that was prepared and coded by the broker.
I also received a CP2000 for 2016 (and for a couple of other years) because TurboTax did not send in my 1099-R for a federal annuity retirement. I've used TurboTax for decades and am quite familiar with the process.
I thought there was an error in the TT program; posted a forum question a couple of times only to see it disappear. It is getting tiresome writing disagreement letters to the IRS; this year I may file a paper return in order to avoid another CP2000 form.