Must mail the FULL 1099 from Brokerage to IRS?

[ipexhaven]

Okay, I have just filed my tax return, and I am immediately caught off guard after a brief moment of relief of finally knocking my taxes out of the way for the year...to now have to mail in Form 8453 along with Form 8949.

Here’s what really irks me, TurboTax doesn’t provide any further guidance on how to proceed from here.

Even more bizarre is that the PDF file that TurboTax requested me to download, print, and mail to the IRS also contains Form 8822 for changing address, which is completely irrelevant, stirring even more confusion of why would there be a Form 8822 needed to go along with Form 8453 and Form 8949.

So, here are my questions:

1.) Do I really need to print and mail the irrelevant Form 8822 (“Change of Address”), which I don’t need to change my address?

2.) Do I need to print and mail BOTH, Form 8453 and Form 8949? Can I just print and mail either one and will be good?

3.) Now, here’s the biggest question confusion: do I really need send documentations for the items in 8949? It doesn’t say so, but I’m going to assume we have to send documentations? If so, that leads to my next question.

4.) Can I just print and mail the beginning portion of the brokerage’s “1099 Composite Summary” and/or some sections for each indvidual1099-B (e.g., “Short-Term Realized Gain/Loss,” “Long-Term Realized Gain/Loss,” and “Total Realized Gain/Loss) from that full 1099 Composite?

5.) Or, do I really need to print out the ENTIRE brokerage’s “1099 Composite” of every little transactions that is 300+ pages long? Not to mention, if we have five brokerages, that would create 1,500+ pages to print and mail.

[fanfare]

Form 8453 is a cover sheet it has no reported  information.

IRS requires details of all sell transactions , one way or another.

EXCEPTION: for covered transactions category Box A or D without adjustments, Form 8949 is not required. No mailing is necessary.

4) that is just exactly what you have on your e-Filed return now if you summarized all categories.

====

Suggestion: don't mail anything.

Don't discard your PDFs in case IRS sends you a notice later asking for the details.

[ipexhaven]

I'm sorry, but that' doesn't clarify the ambiguity and confusion still surrounding how to proceed with the whole physically mailing Form 8453 and 8949, with or without the full brokerage's 1099 Composite or only parts of it scanned and printed only the summaries and 1099-B sections.

"4) that is just exactly what you have on your e-Filed return now if you summarized all categories."

- MY REPLY: Yes, I know, but apparently the IRS might seen to want proof; thus, the lingering question still remain of should I send the full brokerage's 1099 Composite or only the crucial parts of it with the summaries and 1099-B sections consolidating the short-term, long-term, and total?

[fanfare]

Complain to your broker(s) and ask why your 1099-B Box A and Box D report is not partitioned into transactions with adjustments and transactions without adjustments.

It is only the former that IRS wants to see if those are not already listed in detail on your filed Form 8949.

P.S. I took my own advice and asked the question to TD Ameritrade recently.

The response showed they had no idea what I was talking about.

[fanfare]

IRS has always required all transactions to be listed in detail.

When the rules were instituted, nobody made hundreds let alone thousands of trades per year.

So far, IRS has not seen fit to relax or change the reporting requirements.

Refer to the IRS Instructions for Form 8949 and Instructions for Schedule D.

[ipexhaven]

So, nobody knows the answer of WHETHER we should...

a.) mail the printed FULL brokerage’s 1099 500-page package to the IRS

or

b.) mail only the printed summaries and consolidated short-term, long-term, and total sections for mailing no more than 10 pages to the IRS?

[ipexhaven]

“Refer to the IRS Instructions for Form 8949 and Instructions for Schedule D.”

- MY RESPONSE: It doesn’t seem practical to send +1,000-page brokerages’ 1099 packages to the IRS, not to mention with so many young people jumping on the investing bandwagon. I seriously doubt the IRS would ever have the manpower, resources, and time to go through them, all piled up in their building.

[AmyC]

IF you have to mail anything, then a consolidated form makes the most sense. The IRS has received the full copy from the broker already. The IRS will contact you if they need more information.

Instructions for Form 8949 (2020) | Internal Revenue Service states: If you e-file your return but choose not to report each transaction on a separate row on the electronic return, you must either (a) include Form 8949 as a PDF attachment to your return, or (b) attach Form 8949 to Form 8453 (or the appropriate form in the Form 8453 series) and mail the forms to the IRS. (However, you can't attach a paper Form 8949 to Form 8453-FE.) You can attach one or more statements containing all the same information as Form 8949, instead of attaching Form 8949, if the statements are in a format similar to Form 8949.

[ipexhaven]

Hello AmyC,

Would you please specify that?

The consolidated form, mine at least, is 70+ pages. So, you’re saying I only need to send the first few pages of it containing all of the summaries at the beginning and a few other pages summarizing the 1099-B section?

That is where the confusion lies. People keep saying consolidated form - implying the entire full 70+ pages - rather than specify only a few pages from it containing the summaries at the front and additional pages showing the 1099-B sections.

[AmyC · Accepted solution]

If all of your transactions were covered with no adjustments, I would not mail anything.

If you need to mail something, I would mail the minimum as a good faith gesture. The IRS has the forms. The computer is what will do the matching up. Unless you are adding a statement or showing other value, your papers aren't that important. If they do turn out to be the only copy, like IRS lost theirs, then they will reach out for your copy. Yes, those crazy things do happen.

[ipexhaven]

Thanks. I think that clarifies things for now. You should add a separate FAQ page addressing this 8453 issue.

[JG1989]

did you end up sending the 300+ pages, or anything at all? i have the same exact question, and cannot find a proper answer.

[RobertB4444]

@JG1989  You do not need to send the full statement if all of your transactions are covered.  That means the basis has been reported to the IRS by your broker already.

If any of your transactions are 'non-covered', however, you need to send the whole statement to the IRS.  They don't know what your basis is and they aren't going to take your word for it.

[fanfare]

Expert  @RobertB4444  :

"You do not need to send the full statement if all of your transactions are covered. "

You do need to send the details for your covered transactions that have adjustments.  

The IRS instructions are pretty clear,

The detail exception is only for Box A or Box D transactions without adjustments.

If you itemize your Box B or E transactions on Form 8949, you don't have to mail any statement.

The IRS will take your word for it.

If you itemize your Box A or D transactions with adjustments on Form 8949, you don't have to mail any statement.