I received a CP2000 letter from the IRS for the 2020 tax year saying I owe more money. How do I verify that the IRS is correct? And why did TurboTax get it wrong?

[dzc5386]

It looks like TurboTax saw each transaction that took place, but got the amount wrong. Why would this happen?

[VolvoGirl]

What did the IRS say was wrong?  What transactions did Turbo Tax see?  Look over your 2020 return.  What amount is wrong?  Do all the amounts look right?  Make sure you really understand what the amounts are from.  What lines don't you understand?

[xmasbaby0]

https://ttlc.intuit.com/turbotax-support/en-us/help-article/internal-revenue-service/got-cp2000-noti...

[Mike9241]

What this notice is about
The income or payment information we have on file doesn't match the information you reported on your tax return. The notice explains what information we used to determine the proposed changes to your tax return.

What you need to do
Read your notice carefully. It explains the information we received and how it affects your tax return.
Complete the notice response form and state whether you agree or disagree with the notice. The response form explains what actions to take. (Your specific notice may not have a response form. In that case, the notice will have instructions on what to do). You can return your response by:
Mail using the return address on the enclosed envelope,  (if you mail use a method whereby you can track receipt) or
Fax your documents to the fax number in the notice using either a fax machine or an online fax service. Several online fax services use the internet to send files from your computer or smart device to a fax number.
If you agree with the proposed changes, follow the instructions to sign response form. We require both spouses' signatures if you filed married filing jointly.
If you disagree, complete and return the response form. Provide a signed statement explaining why you disagree and supply any documentation to support your statement.
If the information reported to us is not correct, contact the business or person who reported the information. Ask them for a corrected document or a statement to support why it is in error, then send us a copy with your response.

another possibility

The Audit Defense service is provided by TaxResources, Inc., also called TaxAudit.com, in partnership with TurboTax. If you paid for Audit Defense and you received a notice, call TaxResources, Inc. at 877-829-9695, or report your notice on their website at http://intuit.taxaudit.com/. Do not contact the tax agency until you have spoken to TaxResources. They may contact them on your behalf.

[NCperson]

@dzc5386 - there are two types of errors

1) the calculations in the software are wrong - TT guarentees they are accurate otherwise, they pay any interest and penalties on your behalf under their guarentee

2) the taxpayer entered something incorrectly - TT does not guarentee this

either type or error can cause the tax return to be incorrect 

Let's focus on 2) 

what is it spefically stated in the letter? one of the issues that typically surfaces on these adjustments on these boards is is the stimulus / recovery rebate credit.  

1) what is the EXACT amount of th adjustment the IRS made

2) what is on line 30 of Form 1040? 

There was a point in the interview process where TT asked how much you received for each of the 1st two stimulus payments.  If you entered a number that does not match the IRS records, the IRS will adjust the difference.   Is that what happened? 

[dzc5386]

There are 14 securities transactions that were reported with a "shown on return" number less than the "reported by others" number. Basically for these 15 transactions, the IRS is saying that the amount that TurboTax used when filing my taxes was not the correct number and that I still owe on the remainder. Each of these 15 transactions look to be off by about 15 to 20%

There are 5 other securities transactions that appear to have been missed by TurboTax when filing because their "shown on return" number is $0. 

There is 1 dividend line saying that I didn't report any dividends. I'm not sure why TurboTax didn't report that.

Then there is an interest amount of $20 from a checking account of mine. I'm not sure why TurboTax didn't report that either.

The three biggest questions I have is:
What part of what form do I look at to verify all of these changes and how do I find it?

Why didn't TurboTax correctly report these / why didn't the IRS correctly report these?

I somehow lost the response form for the CP2000 notice. Is there a way to respond without mailing it? If not, how can I get a replacement response form?

[NCperson]

@dzc5386 - from what you stated, and that is somewhat limited, here are some thoughts

1) Sounds like you should have received a brokerage statement which should have included Forms 1099-DIV and 1099-B. Sounds like what the brokerage firm reported to the IRS for these forms doesn't match what you have in your 2020 tax return.  Did you enter it or import it? did you check the entires (this is what I was refering to as taxpayer error). 

2) on the $20 of interest.  The Bank was not required to send you a 1099-INT, but you were still responible to report the income.  Appears the Bank reported it to the IRS and you don't have it on your tax return. 

3)  Get out the brokerage tax report you received and compare it to what is on your tax return  on Schedule D as well as the on line 3a and 3b for the dividends. 

Why didn't Turbo Tax correctly report these? I'd ask the question whether you reviewed what was entered.  Turbo Tax is a 'do it yourself' process and it's the user's responsibily to know what was entered.

why didn't the IRS correctly report these? why do you think it's wrong? it likely matches what the brokerage firm told then (which should be the same form you received).  The one area where 'wrong' may occur is sales related to purchases prior to 2011.  The brokerage firm is unlikely to have the cost basis, so it could have reported "$0". it's your responsility to enter the correct cost basis in these situations.

does that help?  

[rjs]

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@dzc5386 wrote:

the IRS is saying that the amount that TurboTax used when filing my taxes was not the correct number

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TurboTax used the amounts that you entered. It has no other source of information. It has to rely on you to enter correct and complete information.

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@dzc5386 wrote:

There are 5 other securities transactions that appear to have been missed by TurboTax when filing because their "shown on return" number is $0. 

There is 1 dividend line saying that I didn't report any dividends. I'm not sure why TurboTax didn't report that.

Then there is an interest amount of $20 from a checking account of mine. I'm not sure why TurboTax didn't report that either.

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You haven't said whether you entered your investment income manually or imported it. If you entered it manually, it's up to you to make sure you enter everything. TurboTax has no way of knowing if you omitted some income. If you imported it, it's up to you to make sure that you import everything, to check to make sure that the imported information is complete, and to manually enter anything that was not imported. The time to verify the information on your tax return is before you file it.