Help!! I apparently didn't file my 1099-b (crypto stuff) on my 2021 taxes. Got a letter from IRS stating I owe 19k (a couple months past due with interest etc.). On my 1099-B from Uphold (crypto) my proceeds (1d) were 66,573.72. My cost basis (1e) was 62,498.66.
I heard that if you don't file, the IRS will amend with the proceeds without any costs to obtain those proceeds taken out. My question is, what do i need to do and if I file an amended tax return (1040-x) will this help bring dowm my tax burden on that 19k letter they sent me?
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so by amending this, it will update what my taxes owed will be? Will it also suspend any actions by the IRS as far as sending letters and/or progressing to a possible lien stage for non payment of their original amount they said i owed?
what does the notice say to do if you disagree. follow those instructions.
if it gives the option prepare a 1040 x with only the 8949's/schedule d. send it with the notice to the address indicated. include a signed and dated cover letter explaining the amended return now reports the omitted crypto proceeds and their tax basis. Ask that the IRS correct its records accordingly and send me a revised bill.
if you do mail it, use a tracking service so you know that the iRS got it
@ketchmm wrote:
so by amending this, it will update what my taxes owed will be? Will it also suspend any actions by the IRS as far as sending letters and/or progressing to a possible lien stage for non payment of their original amount they said i owed?
The IRS is taxing the entire proceeds, because they don't have to give you credit for anything (such as basis) unless you put it in writing.
Generally, you should start by preparing an amended return to recalculate your tax and see if it is different than what the IRS proposes. If you disagree with the IRS assessment, you have to follow the steps in your notice. That usually means that you write a letter of explanation, and send the letter and your amended return (as proof of your calculations) to the office that sent the notice, instead of mailing the amended return to the usual address for that type of return.
But it depends on what the notice says. And don't delay, if the notice has a deadline and you miss it, you may be deemed to have waived your right to challenge the assessment.