dmertz
Level 15

Retirement tax questions

When the IRS system detects the unreported amount, the tax return is kicked out to an examiner.  In this case a smart examiner might observe that the IRA custodian issued a Form 5498 reporting receipt a rollover of the same amount and close the examination.  A less savvy examiner, in the absence of a previously provided explanation, would issue a CP2000 that would require a response indicating that the rollover was indeed completed.