How can I/do I need to file form 8997?

[DXS]

Someone on here suggested using TuboTax without the Form 8997 and then filing an amendment to include the Form 8997. 

OH HE** NO!  Do not file a Form 1040X unless you are owed an additional refund (which will take 20 weeks according to their web site).  You run the risk that the IRS will mess up and decide you owe additional money. Here is what happened to me, although my Form 1040X did not involve a Form 8997.

(What the IRS won't admit to, is.... if they think they can squeeze more money out of you, they FAST TRACK those Form 1040X's.  )

I received a corrected tax document from an investment company.  I had additional income.  So I filed (electronically, TaxActOnline lets you file free if you used their service on your original Form 1040) a Form 1040X. I dutifully paid the tax.

ONE MONTH later, I got a reply from the IRS acknowledging my Form 1040X and acknowledging my payment, but they decided I owed an additional $1500 plus penalties and interest.  HUH? (yeppers, they fast track if they can squeeze you for additional money!)

I sent in a protest letter which included a copy of my previously filed Form 1040X.  Guess what, the IRS completely ignored my protest letter and processed my COPY (of my previously filed Form 1040X) as a SECOND Form 1040X.  (I discovered this after numerous, numerous phone calls to IRS TaxPayer Advocate Office.) Then they sent me another letter claiming I still owed $1500 plus penalties and interest.

Finally I found an astute TaxPayer Advocate who told me that the problem was.....  my original tax was computed using QDCGTW (Qualfied Dividends Capital Gains Tax Worksheet), which I was entitled to and if you have capital gains and dividends, you get that rate, too.  When I sent in my Form 1040X, the IRS recomputed my tax using the Tax Table and not the QDCGTW. 

So I sent in another protest letter requesting the IRS to recompute using QDCGTW.  I should not have had to do that, it should have been obvious.  But TaxPayer Advocate said I pretty much had to. 

Finally got the IRS to back off.  It took three months, but I also made numerous phone calls and was a "squeaky wheel." 

DO NOT file a Form 1040X unless you are owed extra money back. 

[pkkrishna]

Hi Campfred,

Did you get any response from irs to send the form 8997. I am in the same state now for my 2022 tax return.  So was wondering.  Pls let me know.

[Anonymous_]

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@pkkrishna wrote:

Hi Campfred,

Did you get any response from irs to send the form 8997. I am in the same state now for my 2022 tax return.  So was wondering.  Pls let me know.

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@pkkrishna 

You are asking a question from a user who has not posted in close to 2 years so you might not get a response from @campfred. 

[lorenrex]

Why can't Turbo Tax include form 8997?  This would allow me to file my taxes oneline!

[DXS]

I am just taking a VERY WILD guess.  It takes some time to train programmers into how the tax forms work.  They don't need to know the tax law, but they gotta know how the tax forms work so they know what numbers to send over to what documents and how to add it all up.  I am guessing they decided it wasn't worth their time to train programmers in how to work the Form 8997 and make it flow to Form 8949.  They probably analyzed their customer data and found that people who have this level of investments most likely do not use TurboTax or the few that would was not worth it for them to train programmers. 

Just a wild guess. 

[Anonymous_]

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@DXS wrote:

Just a wild guess. 

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Yes, that is definitely wild, all right.

[Styg88]

8997 is a very simple form, but Intuit may have decided that too few taxpayers that would need it, and that they were unlikely to lose many customers over a single missing form.

     I do wonder if they took into account the loss of revenue from customers who must file paper returns because they need to submit 8997. If you file your Federal return on paper, then you are forced to file your state returns on paper too. Many QOZ investors have more complex tax returns including needing to file in multiple states -- so Turbotax is losing out on not just one state e-filing fee per customer, but in many cases multiple state e-filing fees they could be collecting.