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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7526
Experience:  15years with H & R Block. Divisional leader, Instructor
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For 15 years Ive claimed simple IRA contributions but I didnt

Resolved Question:

For 15 years I've claimed simple IRA contributions but I didn't make them to an official IRA account, through my own stupidity I guess. I thought I could just put money in investments/savings but now realize it has to be an official account.
Am I completely screwed? Is there anything I can do, like officially creating an IRA now, then taking distributions from it when I'm required to at 70 1/2 years old, or is that pointless now and I should expect to be fined/prosecuted about this? I'm 67.
I'd planned on taking distributions and paying taxes on that but it seems like it has to be covered by a 1099 or some other reporting form?
Thanks for your help: didn't mean to break the law, and should I get an attorney to sort this out? Or just hope they don't ever notice at IRS?
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Robin D :

Hello and thank you for using Just Answer,
The last thing you really want to do is the last thing you suggested (just hope they don't ever notice at IRS).
You are correct it has to be an actual IRA for the deductions to matter.
To really clear his up you need to go back and amend the returns that you filed that show the amount to cliamed for the deduction.

Robin D :

clear this up * sorry

Robin D :

You would not be prosecuted you will have interest to pay on the amount you will owe becuas ethe deduction claimed that you really were not allowed to claim.

Customer:

Okay, thank you. I'm wondering whether it's worth opening an IRA and taking distributions from that, or just bite the bullet, work with a CPA and clear it up...or do "the last thing" as you said.

Robin D :

Do not do the last thing you suggested!!

Robin D :

You need to work with a tax professional that can go back and clean this up for you.

Robin D :

Even opening an IRA at this point is not enough.

Customer:

Ah...the "last" thing I want to do, I misread. Okay, thank you, XXXXX XXXXX your help. Mainly I suddenly panicked that they'd toss me in jail for fraud, but if I clear it up, it's just a matter of fines and penalties I suppose.

Robin D :

No you will not be tossed in jail because you are attempting to correct this situation.

Robin D :

ANy penalties would be in the form of interest on the balance due.

Customer:

Very good, thanks again, much obliged.

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7526
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and 6 other Tax Specialists are ready to help you
Customer: replied 1 year ago.

Sorry, I jumped off to soon. Will do re the survey, thank you.

Expert:  Robin D. replied 1 year ago.
You were very kind just to come back and respond to that. I wish you the best in your situation.
Customer: replied 1 year ago.

Thank you Robin, I appreciate that.


All the best

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