Something Does Not Seem Right

By Danielle R. Page, EA
March 1, 2024

It is time to file your tax return, only 45 days until April 15^th, Tax Day!

You have collected all your tax documents, and you quickly run to your favorite tax preparer or tax software to begin preparing your tax return. BUT WAIT! Something does not seem right; one of your tax documents is missing!

First things first, do not panic; there are multiple options to obtain a copy of the missing document. First line of defense is to call the company that was supposed to issue you the document, for example, your employer or past employer, retirement account facilitator, or investment broker. If they are responsive and issue you a copy of the tax document, GREAT! You can move forward filing your tax return, BUT that is not always the case.

The next option is contact the Internal Revenue Service (IRS) to request a Wage and Income Transcript for 2023. Now, this option may result in you having to file Form 4868 Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, due to the timeline of the IRS having a complete and accurate transcript for you.

The IRS estimates that a complete and accurate Wage and Income Transcript is available by the month of May following the closed of each tax year. For example, when you request a Wage and Income Transcript for tax year 2023, the IRS may not have a complete and accurate transcript for you until May of 2024. Upon receiving the Wage & Income Transcript, you may use that document to file your tax return, knowing you have all the information that was submitted to the IRS by income sources you may have.

Another option is to use Form 4852 Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions from Pensions, Annuities, Retirement, or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. to report the information you believe to be correct and accurate, to the best of your knowledge. This option allows you file your return on time by April 15^th. Although, if you receive the document, you were missing after you have submitted your tax return, and the numbers you filed on Form 4852 does not match the document you received, you will have to file Form 1040-X, Amended U.S. Individual Income Tax Return to make the necessary adjustments.

Let’s say you filed your Form 1040 U.S. Individual Income Tax Return with all the information you had and to the best of your knowledge everything was 100% accurate. You have received your refund or paid the balance due on the original filing, whichever applies, and all is happy and good for the 2023 tax filing year. But then you go to the mailbox in early fall and find a love letter from the IRS, a CP 2000 Notice, Proposed Changes to your 2023 Form 1040.

This notice is telling you that the information reported on your 2023 tax return, does not match the information that the IRS has on record. You can reach out to a tax professional for help on resolving this matter due to the strict timeline for resolution on the CP 2000, or you may try to handle the notice yourself. Do not let the timeline on the CP 2000 be overlooked; the process to resolve the notice becomes very difficult once that timeline has expired.

If you believe a document is missing, do not just file the return thinking it does not matter. It is important to act and be proactive. Otherwise, you will be hearing from the IRS in due time.