Retirement tax questions

If the account was never an IRA, then all those deductions were improper.  (And I'm surprised the IRS has not notified you before.)

 

I think it is impossible, if not illegal, for you to have opened an IRA which was then "converted" to a brokerage account.  That would have involved withdrawing all the IRA funds, getting a 1099-R, and paying income tax plus a 10% penalty for early withdrawal. 

 

However, if you had a regular broker account, you should have been getting tax forms every year, depending on how you were invested.  A 1099-B form if you sold shares, a 1099-DIV for dividends, and a 1099-INT for any bank interest that was paid if your investments were held in cash.  It would be almost impossible to invest in something that had no sales, no interest and no dividends, unless you specifically invested in growth stocks that pay no dividends.  (As an example, I invest in mutual funds and ETFs and there are always some capital gains and dividends that are reported due to trading activity within the fund, even if I don't sell my specific shares.)

 

So I would start by gathering information.  Ask e-trade and capital one if they have any 1099-B, 1099-INT and 1099-DIV, for your account, going back to 2014.  Get your IRS wage and income transcripts and see if there are any 1099s on file for you that are linked to these accounts.  https://www.irs.gov/individuals/get-transcript

 

You may need to request your transcripts by mail since the online access does not go back 7 years. 

 

Then, you need to file amended tax returns for all prior years you claimed a deduction for IRA contributions.  Remove the deduction and add the 1099-B, etc., if you got them and didn't already include them.  You can't file an amended return to get a refund, but you can and should file to pay back taxes you owe due to your own mistakes.  Turbotax only supports the last 3 years so to file amended returns before 2018, you will need to see a tax professional or download the forms and instructions and do it by hand.  (It's not too complicated if removing the deduction is the only change you need to make.)  After sending in the tax returns and payment, the IRS may hit you with a bill for late fees and interest, you can apply for a waiver of the late fees for cause, or as a first-timer if you never owed a penalty before.  

 

Now, the statute of limitations for the IRS to audit you is 3 years, or 6 years if your tax is understated by more than 25%.  That means that the IRS probably can't audit you, or bill you, for this mistake on any tax return before 2018, and the audit window for the 2018 window will close April 18, 2022, assuming you filed on time. So you could potentially sit tight and keep quiet for now, and not call attention to the problem.  Wait until after April 18, 2022, and then only file amended returns for 2019, 2020 and 2021, to remove the IRA deduction.  Since the IRS didn't catch you in time, they can't do anything about it now.  However, I am not an attorney, so you should consider these comments as suggestions only, and possibly review the situation with your own tax accountant.

 

Since you got a 1099-B, I would not prepare a substitute 1099-R for the entire withdrawal unless you can find your actual contract from 2014 that says the account was an IRA.  The conflict between those two forms will definitely get the attention of the IRS.  You can assign any name you like to the broker account (it's just a nickname in case you have more than one account), so that by itself doesn't prove anything.  

 

[Note added after]

In my above answer, I assumed you made and deducted "IRA contributions" that weren't, in every year since 2014.  From your question, you might only have made contributions in 2014 and 2015.  In that case, those are the only 2 years that need to be amended.  Or, since they are past the statute of limitations, forget it because it's too late for the IRS to come after you.  

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