2023 Amended Return and IRS Letter

[mgmike]

I amended my 2024 return using TurboTax and paid the additional tax owed. The issue was about a IRA distribution that we completely missed because it was provided electronically and not mailed. The amendment had to be mailed in. 

I received a letter from the IRS with the statement "All complete supporting documentation is needed to support the changes listed on your amended return. This includes a Schedule A and Schedule 2 and any other documentation required."

I reprinted and re-mailed the documentation ensuring schedule A, schedule 2 and the 1099-R was included. In both the mailings my explanation on page 2, part 2, Explanation of Changes said "I am amending my 2024 tax return to report a $40,000 Roth IRA conversion from a traditional IRA. This distribution is shown on Form 1099-R (distribution code G). The additional income increases taxable income and the federal income tax, which are reflected in this amended return."

I received another letter from the IRS stating that the supporting documentation was not complete.  The crazy thing is that we had this exact issue occur in 2023 and I used the same explanation for the changes. That amendment was accepted. 

I'm at a loss for what to do next.

[LenaH]

Distribution code G is for direct rollovers, not Roth conversions. Typically, a Roth conversion is code 2 or code 7, depending on your age.  If your 1099-R says code G, that is likely the cause of the problem because Roth conversions and rollovers are treated very differently and is likely the root of the problem. The IRS treats these transactions very different, and a mismatch between the code and your amended return will continue to be a problem. 

You will need a corrected 1099-R from your financial institution and the right code should be on your amended 1099-R. Then, respond to the IRS with the corrected form. 

Either way, the IRS needs Form 8606 Part II to document the conversion and calculate the taxable amount. Make sure this is in the amended packet of your return. If it is isn't in your amended packet, that's a separate reason the return kept coming back incomplete. Make sure both the corrected 1099-R and the Form 8606 are included before you mail anything further. 

[VolvoGirl]

And how did you get a taxable amount to show up on your return if the 1099R was a code G?