Received IRS Letter CP2000 - Error due to Turbo tax import tool using the wrong stock value (penalty)

[heymeyeh]

I sold stocks last year for the first time and naively used TurboTax's import tool via online tied to my trading account. I just received a letter from the IRS saying that what I reported on my securities were wrong. This accrued to a large difference that I owe in taxes and interest fee.

I triple checked by manually typing in each security, only to see that TurboTax did indeed use the wrong cost basis. And this is a larger bank company available through TurboTax's import feature.

I tried to reach out to TurboTax support - of course their phone number hung up once I got past the series of questions and I can't find a support email.

Has anyone gone through this? I'm disappointed there are no better checks in the system and I am now paying for the large unexpected taxes due and interest penalty due to this. Also worried now on my next tax filing and which 2023 filing information to use since I am not doing a tax amendment (unless I should?). 

[AmyC]

You can contact support.  If the program made an error, you can  use our Accuracy guarantee submission. Since your federal return is being corrected, you may need to amend your state return - if you have one and they tax these gains.  See   I need to amend my state return. 

You should definitely look at your 2023 return and verify the correct basis is used, wash sales are exempt, etc. All of the usual things you must do. It is better to get it corrected sooner, less penalties and interest. How do I amend my federal tax return for a prior year? You would also amend your state return.

The IRS expects you to keep track of your own investments. The IRS offered this spreadsheet as one example:

I want to urge you to create a financial notebook that is kept separate from your tax return. Keep it safe and each year, add your year-end statements from all your financial accounts plus a copy of your W2’s, your  carryover information, and proof of your basis in your various investments. You must keep tax records  from the time you purchase until sold/ loss used plus 3 years. It is very easy to lose track of disallowed losses, carryforwards,  and basis. This can be a digital or paper notebook.