IRS Notice CP28

[RedRaider97]

Wanted to update on what I found.  First, TT did reach out and helped me get the state returns imported into the desktop version.  They were amazing once I was able to talk to a human.

in the desktop version I was able to see TT put in the beginning balance exactly the same as the ending balance of the loan.  Interestingly, TT only asked me for the ending balance both in the online and desktop version.  Interestingly the desktop version I couldn’t even override the beginning balance - it was hard coded.

i was able to input the taxable interest based on my manual calculation and override what TT calculated.  

I assumed TT would have brought in my 2024 ending balance as my beginning balance but it didn’t this year.  I think something is wrong with the coding for that this year.  

if you got a CP28 notice and confident you answered all the TT questions accurately, I would check to see if TT used your ending balance to populate your beginning balance as that doesn’t provide an accurate Average balance of the loan for the year.

Just mailed my amended return and am done.  What a journey.  Thanks for all of the help!

[Harmonix014]

that’s good to know!! I was also able to connect with an awesome live expert who walked me through manual adjustments. She agreed that TT had some programming/calculation issues. I am now ready to file my fed and state amendments. 

[user17689512664]

I received a CP28 for 2024 and I changed lenders (not my doing, conducted by lending company). I took the sum of interest paid across the two 1098 forms and submitted as my mortgage interest deduction. My loan was under $750,000, while I deducted ~$40k. Any ideas on what went wrong and/or how to fix?

[DaveF1006]

Yes, here's what might have happened. If you recorded the two 1098's separately, the software may have mistakenly understood that you had two different loans totaling a much higher amount. 

The IRS will calculate an "Average Balance" by looking at the principal reported on your 1098s. If two 1098 forms are reported on your tax return, the IRS doesn't distinguish that they are the same loan. It assumes your debt is more than $750,000 and automatically limits your deduction—often at a much lower amount than the $40,000 you paid.

My suggestion is to respond to the notice by mailing a brief statement to the address on the notice. Include both copies of both 1098's and inform them you changed lenders and that the two 1098's issued are for the same loan. Further state that your total principal never exceeded $750K and that you are entitled to the full interest amount of $40,000. 

@user17689512664 

[sarahsunshyne]

Thank you for posting all of this! I too received a CP28 notice. I did try every way possible to chat with someone at TT but can not get past the AI. So frustrating like you said when we are long time paying customers. 

Hoping that is the end for you! 

[DaveF1006]

Here are some suggestions you can use to try to talk to a live person.

1. If you paid for audit defense such as MAX, Plus, or Premium, you can call  877-829-9695.
2. If you have audit support guarantee, which is free for most versions of TurboTax, call 800-624-9066