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Posted by tobe on June 8, 2007, 1:21 pm
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I just received a notice from the IRS concerning my 2005
taxes, and I have three questions about what information I
need to supply to them to show that the original return was
correct as submitted.
1. I (stupidly, I guess) included individual dividends on
Schedule B that were lumped together in one 1099-DIV from
Fidelity. There were also a few other dividends from other
1099-DIV's, but the IRS thinks I left out the Taxable
Dividends from the Fidelity 1099-DIV entirely. My total
Schedule B part II income DOES match the total from all
1099-DIV's I received.
* Do I need to do anything besides explaining this and
listing the dividends from Schedule B which total the amount
on the 1099-DIV?
2. Interestingly, the Notice points out that I had a
slightly smaller amount of Qualified Dividends from the
Fidelity 1099-DIV that they note I DID include on my return!
[No question here, except are they really that stupid that
they can't match my total 1099-DIV's with my Schedule B?]
3. They note that I did not list taxable income from a Form
1099-Q. This distribution from a QTP was entirely used for
reimbursement to me from tuition paid for my dependent child
(in college), and therefore not taxable. I was not aware
that I needed to list this amount anywhere in the original
return.
* What documentation do I need to include to show that this
was the case? Would a statement from the college listing
billed items and amounts paid suffice?
With the original return, I also filed a Form 8863,
Education Credits, claiming the maximum amount for the
Lifetime Learning Credit. I did, however, carefully
calculate the amount of the education bills I paid which
qualified each for the Lifetime Learning Credit and the
non-taxable QTP distribution, and I can legitimately claim
both (no overlap: no double-dipping).
* In order to head off further trouble, should I explain
this in detail if I include the Statement from the college?
[I assume I should be polite in the letter and not point out
their stupidity, and that my original return was correct.]
n.b.: Private college expenses are outrageous. If you are
saving for it, you cannot save enough in your lifetime if
you have a normal income! Furthermore, the more you save,
the less you qualify for grants.
Thanks in advance for advice.
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