IRS request for 1040X copy after late filed 8606. Thank you!

[1967jeff1967jeff]

Hello, and happy holidays.  A question, please.

In March 2019 I made a nondeductible contribution to a traditional IRA for the 2018 tax year.  In March 2020 I realized that I had failed to file form 8606, so I late filed it that very week.  I included a letter asking for a penalty waiver since I was taking "immediate corrective action."

This week I received a letter from the IRS asking for “a completed copy of Form 1040X, Amended US Individual Income Tax Return, page 1, column C.”

I hadn’t filed a 2018 1040X because it didn’t seem to me like any amendments were necessary.  That is, my failure to timely file 8606 seemed to me to be just a reporting mistake.  Please, am I right?  And if so, what should my letter I send back to the IRS say?

Thank you most sincerely for your help.

[dgs0321]

I used to be a tax attorney and one of my biggest frustrations was this exactly:  If there is no money on the line, why would you want to get involved in a back and forth conversation with the IRS?  They are asking for a 1040X - if all you need to do is copy your 1040 to a 1040x and add the requested form, why would you think that some other process that involves arguing with the IRS would be simpler?  
Of course, you have the right to argue - and sometimes it makes sense to argue - like when there is question of how much you need to pay.  But when it's just about filing a form that contains information that they already have - just filing is almost always the right answer.

[1967jeff1967jeff]

Thank you so very much for your reply.  But please, if there's nothing to amend, wouldn't it be just plain wrong to file a 1040X?

[macuser_22]

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@1967jeff1967jeff wrote:

Thank you so very much for your reply.  But please, if there's nothing to amend, wouldn't it be just plain wrong to file a 1040X?

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I would call the IRS on the number that should be on the letter and discuss it with them.

Unless you deducted the contribution in 2018 and are now changing it to non-deductible (or non-deductible to deductible) both of which would change the AGI and tax then no 1040X is necessary.

The 2018 1040X instructions say:  "Changing your IRA deduction. In Part III of Form 1040X, enter “IRA deduction” and the amount of the increase or decrease. If changing from a deductible to a nondeductible IRA contribution, also complete and attach Form 8606, Nondeductible IRAs.".

And the 2018 8606 instructions say:  "Amending Form 8606
Generally, after you file your return, you can change a nondeductible contribution to a traditional IRA to a deductible contribution or vice versa if you make the change within the time limit for filing Form 1040X (see When To File in the Form 1040X instructions). You may also be able to make a recharacterization (discussed earlier). If necessary, complete a new Form 8606 showing the revised information and file it with Form 1040X"

So again, if you are NOT changing the contribution from deductible to non-deductible (or the other way around), then the 1040X is not necessary.     In addition, you are NOT amending the 8606 since an original 8606 was never filed - you are now simply filing the late original 8606 that should have been attached to the 2018 tax return but was missed and the IRS can charge a $50 penalty for processing a late 8606 which they can waive.

[fanfare]

Look at 8606 Instructions.

Can be filed alone only if you are not filing a 1040 tax return.

otherwise attach to your 1040 return.

• you did file a return.
• you left 8606 out.
• use 1040X to correct or add missing information on an already filed tax return.

[1967jeff1967jeff]

I must profusely thank macuser_22 and dgs0321for their good advice.  I did wind up calling the IRS and they said that the easiest thing to do is to send them the 2018 1040X.  But since there are no amendments, the IRS person said to fill out all of my identifying information, address, and filing status; to explain in Part III that I'm filing the 1040X in response to their letter, and then to sign and date it.  But the person said not to fill in any numbers in lines 1-30 since there were no changes.

Please, does that sound right?  Leave the number lines blank?  Thank you.

[macuser_22]

I still disagree that  1040X is necessary because you are NOT filing a 2018 tax return - you filed that in 2018  and you are not changing anything on that which is what an amended is - a change of what was filed and you are not changing anything.  You are just supplying a missing form for that already filed tax return, but you are not amending anything.

Taxpayers have been sending stand alone 8606 form for years without problems, but if that is what the IRS wants then just follow their directions.    (I would not amend using TurboTax - you can just print a blank 1040X from the IRS and manually fill it out since they told you to leave all the tax information blank.)

2018 1040X

https://www.irs.gov/pub/irs-prior/f1040x--2018.pdf

[bingxia01]

I have exact situation like you. Wondering what did you do with the 1040x? I could not reach out to any IRS person through the their phone number. It's always a bot answering questions. 

[JohnW152]

As indicated in the posts above, you can simply print your Form 1040-X (Rev. July 2021) with zero-dollar entries, and include an explanation in Part III.  Attach Form 8606 to your amended tax return.

The office you’ll send this to is based on your geographic location.  Please see Where To File in the Instructions for Form 1040-X (Rev. September 2021).  

Also note that, according to Penalty for Not Filing in the 2021 Instructions for Form 8606:  

If you are required to file Form 8606 to report a nondeductible contribution to a traditional IRA for 2021, but don’t do so, you must pay a $50 penalty, unless you can show reasonable cause.

[fanfare]

you don't have to put zeros in lines 1-23.

you can leave that all empty, since you are not changing any dollar amounts.

If  you took a deduction and are now making it non-deductible, that's a horse of a different color.

[bingxia01]

Thank you! Should I also leave line 16 empty? 

Total amount paid with request for extension of time to file, tax paid with original return, and additional tax paid after return was filed

[fanfare]

last I looked 16 is within 1-23.

Once you put in a dollar amount anywhere , you are no longer using the available "leave it all EMPTY' option.

[JohnW152]

As fanfare notes, don’t make an entry on Line 16 of Form 1040-X.  

Making an entry there when you have otherwise blank amount lines could cause confusion with the Tax Examiner who looks at your return.  They might correspond for more information, even though you may attach an explanation letter.

@bingxia01

[bingxia01]

Really appreciate! I will leave them all empty.

One last question, do I need to attach any other supporting documents, e.g. 1099R from the next year, f8606 that I already sent to IRS or f5489?

[DianeW777]

An amended return requires only the forms or schedules that are changing.  It is recommended that any document that has any federal withholding should also be attached. You can attach the Form 1099R which may eliminate questions but include the reason with your explanation on page 2, Form 1040-X. Only the Form 8606 for the tax year you are amending needs to go with the Form 1040-X.

@bingxia01