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posted Jun 5, 2019 4:47:02 PM

How do I submit a letter of explanation to the IRS regarding disputed SSA 1099 when I submit my tax return with the correct amount?

I am disputing my 2017 SSA 1099.  The matter is still pending with the SSA and I need to submit my Tax Return by the October extension date.  How do I include a letter of explanation with my e-filed TurboTax return?

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1 Best answer
Level 9
Jun 5, 2019 4:47:03 PM

There is no need to submit a letter of explanation with your tax return.  They won't read it anyways.

You have three options:

  1. Submit your tax return with the information from the current SSA-1099.  If the SSA changes it, then you can amend your tax return.
  2. Submit your tax return with the way that you think it should be.  Then wait for the IRS notice (it will likely take several months).  Hopefully your dispute will be resolved by the time the IRS notice comes.  If it not resolved by then, that is when you can provide the letter of explanation (and any proof of your case) in response to the IRS notice.
  3. Don't file your tax return at all until the dispute is resolved.  If you have paid the entire amount that you owe, there would not be any penalties.  But in a few rare situations, that could possibly complicate other matters, so I would not recommend this option.
Just keep in mind that if you decide on option #2 and the SSA does not change things and the IRS does not agree with your argument, there will be interest owed and possibly penalties and the amount that you should have paid on the disputed amount.

4 Replies
Level 9
Jun 5, 2019 4:47:03 PM

There is no need to submit a letter of explanation with your tax return.  They won't read it anyways.

You have three options:

  1. Submit your tax return with the information from the current SSA-1099.  If the SSA changes it, then you can amend your tax return.
  2. Submit your tax return with the way that you think it should be.  Then wait for the IRS notice (it will likely take several months).  Hopefully your dispute will be resolved by the time the IRS notice comes.  If it not resolved by then, that is when you can provide the letter of explanation (and any proof of your case) in response to the IRS notice.
  3. Don't file your tax return at all until the dispute is resolved.  If you have paid the entire amount that you owe, there would not be any penalties.  But in a few rare situations, that could possibly complicate other matters, so I would not recommend this option.
Just keep in mind that if you decide on option #2 and the SSA does not change things and the IRS does not agree with your argument, there will be interest owed and possibly penalties and the amount that you should have paid on the disputed amount.

Level 15
Jun 5, 2019 4:47:04 PM

2.  Could cause issues with your state as well, if your state taxes Social Security benefits.

Level 15
Jun 5, 2019 4:47:06 PM

for #3.  
Watch out, the Online software (if you are using it) will shut down in Mid October for e-filing, and will shut down entirely for 2017 taxes by the end of October (usually)....when it is locked entirely for anyone's access for a few weeks.....and you can no longer edit your 2017 file at all after that...at least not Online.

 If you are using the Desktop software, the e-file deadline will still be 15 October, but you can print and paper-file by mail yourself anytime after that.

Level 15
Jun 5, 2019 4:47:08 PM

Question: "How do I submit a letter of explanation to the IRS?"


Answer: On paper. You cannot e-file if you want to add an attachment. If you add an attachment, title it Attachment to Return of (your name and SS #) and the subject "Incorrect amount reported on form SSA-1099".