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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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Cp2000 IRS form question

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Cp2000 IRS form question

LEV :

Hi and welcome to Just Answer!
Please post your question.

Customer:

Hi

LEV :

Be sure you post your question about the IRS notice.

Customer:

I received a CP2000 form. The main issue IRS raised is I received $6345 from Optimum Health Bank, but showed $0 on my return. I have a high deductible medical insurance policy thru work. The Form 1099-SA from OHB shows distribution code 1, I entered I have a high deductible plan on my form 8889

Customer:

$6345 is the gross distribution on the Form 1099-Sa from OHB

LEV :

Can you provide what exactly did you report on 8889?

Customer:

box 1 checked family

Customer:

box 3 $6150, box 4 $0, box 5,6,8,9,11 $6150, box 12 $100

Customer:

used turbo tax....

Customer:

oops box 9 is $6050

Customer:

box 11 is $6050

Customer:

I am wondering if I should have listed my monthly fees? plus $4K deductible, 20% after deductible...

Customer:

did I lose you?

Customer:

hi...is this chat working?

LEV :

Please let me some time to verify

Customer:

ok thanks

LEV :

I see that form 8889 line 2 doesn't report any contribution - that amount should be from W2 - did you have any contributions?

Customer:

let me check

Customer:

what is it listed under?

Customer:

box

LEV :

2. form 8889 Line 14a should be from 1099SA box 1 - do you have any amount?
Line 15 should report Unreimbursed qualified medical expenses - assuming all money were used for medical expenses - these amount should be equal - please verify?

Customer:

12W $2094 and $3955

Customer:

two W2s

Customer:

14 thru 17b are blank

Customer:

so I should have 6345 in box 14a, and since it was all for medical bills, should have $6345 in box 15?

LEV :

1. 12W is employer's contribution on your behalf - that is reported correctly. I assume that you did not make any additional contributions.

Customer:

right

Customer:

I put in $ into the HSA

Customer:

I pay monthly for the medical..

LEV :

Yes - if lines 14a and 15 are blank - that means - you did not report distribution which was reported to the IRS on form 1099SA - and that is likely the issue.

Customer:

so $6345 is the pay out from my HSA......that I contributed to before taxes....

Customer:

So to clear this up, I return the CP2000 with the 8889 marked up and a letter of explanation...

LEV :

I assume the IRS doesn't ask for any supporting documents for your medical expenses - so that is not the issue. But they want you to report distribution from HSA.
Yes - you need to correct form 8889 and send it to the IRS.
You need to prepare amended tax return - form 1040X - no changes in calculations - but in amending reason - mention that corrections are made for form 8889 - and attach this form. You may attach a letter of explanation but it is not required.
All that need to be send with CP2000 - mark that you disagree and explain.

Customer:

ok form 1040x is self explanatory...

LEV :

form 1040x have original and corrected amounts in different columns - in your case - there is no changes and amounts will be same - so there should not be any issues.
As you need to correct form 8889 - all corrections are made as attachments to amended tax return - that is the established procedure.
Do you need a link top form 1040X?

Customer:

no...I am good

Customer:

I think we are all set!

Customer:

thanks!

LEV :

Here is is - http://www.irs.gov/pub/irs-pdf/f1040x.pdf

Customer:

cool

LEV :

You may try to send just form 8889 with CP2000 - sometimes teh IRS woudl accept that - but there is no guarantee.

Customer:

I will fill it out

Lev and other Tax Specialists are ready to help you