File amended 2022 (with additional CG loss CF) at same time as 2023

[madmanc20]

Doing son's 2023 taxes. Just discovered unreported crypto sale in 2022 resulting in

- Needing to do amended return

- Additional CG loss carry forward (CF) to 23.

Ideally, I'd like to file amended 2022 and 2023 at the same time. But worried IRS will trigger an audit if I enter the new larger CG loss CF from the amended 2022 return into the 2023 return.

I prefer not to properly sequence the filing (file extension for 2023 to delay until 2022 amended return is processed) for 2 reasons

- IRS has been really slow on processing amended returns, could be unprocessed by 2023 extension deadline.

- Have large refund in 2023 return. Prefer to get it sooner rather than much later.

Stupid thing is neither 2022 and 2023 taxes change at all as both returns has max -$3k CG loss before and after the new 2022 CG loss CF. Only change is amount of CG loss CF in 22 and 23

Thoughts on filing these simultaneously? If risky, how do I handle 2022 amended return is not completed processing by IRS before 2023 extension deadline?

Maybe the risk of an audit based on this is low? Just go ahead and do both at the same time?

Maybe no need to file 2022 amended return? No new refund or tax liability. Just CG loss CF figures change.

[JamesG1]

Personally, I have two customers with amended tax returns sitting untouched by the IRS for many months.  Tax Advocate Service has not been helpful to this date.

I would certainly understand not wanting to deal with the 2022 issue at all.

I would file the 2023 tax return with the information that you currently have.  

After that refund has been received, then amend the 2022 tax return.  

After that amendment has been approved, then amend the 2023 tax return.  

I say this knowing the complete process will stretch out for months on end.

I have not found the audit risk to be enhanced but everyone seems to have their own opinion about that issue.

[madmanc20]

Make sense to do the order you suggested. It is properly sequenced to work through IRS's slow amended return processing. 1 extra amend step (2023) but everything is explainable at any time without any mismatch in flight.

Thanks.

[madmanc20]

I suppose a pathological case is

1. File 23

2. Wait 23 accepted, Amend 22

3. Wait 22 Amend accepted, File 23 Amend

If #3 doesn't complete by extended 24 filing deadline, then 24 will need to use the wrong Cap Ls Carryfwd info and the vicious cycle continues and perpetually playing catch up to IRS amended return delay.

Would be nice to not get caught up in this potential hamster wheel. But only way is to file new return with correctly amended Cap Ls Carryfwd followed by the amended return...

[LeticiaF1]

Yes, and hopefully all the amendments get processed before the 2024 tax return is due.  Something to keep in mind is that amended returns can now be electronically filed, and you should be able to e-file both 2022 and 2023 amendments. E-filing will hopefully speed the process.  For more information on amending returns see the TurboTax help articles below:

How do I amend my federal tax return for a prior year?

How to File an Amended Tax Return with the IRS

@madmanc20 

[madmanc20]

Thanks. Unfortunately TurboTax 2022 efiling window for 2022 Tax is closed by 10/16/2023. So can't efile 2022 now with with Tubotax.

Have an additional issue with the CGs as this was for messy tax accounting of cryptocurrency. Don't know if that issue would bias the amended return sequence (probably not). But I'll note it here as well (posted it as separate topic)

https://ttlc.intuit.com/community/taxes/discussion/w[product key removed]es-for-cryptocurrency/00/32...

[madmanc20]

UPDATE on result of IRS 2022 amended return processing for CG loss CF

• Filed 4/1/24. Filed 23 extension hoping for resolution before 10/15 deadline
• IRS says 16 weeks wait, don't bother us
• Finally early 9/24, qualified for a free tax payer advocate referral
• 1 week before 10/15 23 extended filing deadline, spoke to advocate (was assigned a week earlier but they didn't reach out)
• After brief discussion on amended return, advocate said they triggered IRS to complete the 22 amended processing
• 10/30/24 called into IRS to ask for status. Said amended was completed and accepted on 10/24/24 and letter is sending out now.

So quite a delayed mess. Amended just sat around until someone finally got pushed to look at it.

Now need to wait until 2023 finish processing (do check my refund with a bonus return $ if was $0) before paper filing 23 amended return to roll in the CG loss CF to 24. Hope that completes by 10/15/25 by starting this one ~5 mo earlier than the 22 amended return.

So basically this sequence of processing require 7! months.