Can an overlooked tax form result in IRS audit correspondence?

Think tax forms are confusing? You’re not alone. A recent article highlights several commonly encountered areas of frustration. 

Unfortunately, some common mistakes might also trigger the IRS’ attention. For example, a health savings account is set up with tax savings in mind, including tax-free withdrawals for specified or authorized medical expenses. However, it involves two separate forms. The taxpayer must complete a Form 8889 to document contributions to the account, and the institution that oversees the account must complete a Form 1099-SA to document withdrawals taken by the taxpayer. 

When a single tax area requires multiple forms to be completed by different entities, it’s easy to understand how confusion could arise. One commentator recalls a situation where a taxpayer received an audit-related communication from the IRS because she had not included the Form 8889 with her return. However, the IRS had received the Form 1099-SA from the administrator, apparently setting off an audit trigger. 

Small business owners may encounter ever more tax troubles. When depreciable assets are sold, there is a way to recapture that depreciation. Similarly, a business may have used a Section 1031 exchange to defer capital gains or losses on the sale of assets. When all the forms are not submitted, a taxpayer may lose out on tax benefits or, worse yet, get audit correspondence from the IRS

Our Washington, D.C.-based tax law firm has helped countless employers and business owners with tax controversies with the IRS. Visit our website to learn more about our practice. 

Source: Accounting Today, “Tax pros share their most confusing forms, clients and more,” Jeff Stimpson, Jan. 16, 2016

No Comments

Leave a comment
Comment Information
Email Our Team

Contact Us to Get Started Today

Located in the Washington, D.C area, we serve clients in the District of Columbia, Maryland and Northern Virginia, as well as across the country and overseas. For a free initial consultation, call 202-381-1261 or complete our brief online form.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Six Convenient Office Locations in and around the DC Metropolitan Area

Washington, D.C.
1629 K Street NW, Suite 300
Washington, D.C. 20006

Phone: 202-618-1873
Fax: 888-235-8405
Washington Law Office Map

Columbia Office
10440 Little Patuxent Parkway, Suite 300
Columbia, MD 21044

Phone: 410-497-5947
Fax: 888-235-8405
Columbia Law Office Map

Annapolis Office
839 Bestgate Road
Suite 400
Annapolis, MD 21401

Phone: 410-497-5947
Fax: 888-235-8405
Annapolis Law Office Map

Fairfax Office
8280 Willow Oaks Corporate Drive
Suite 600
Fairfax, VA 22031

Phone: 703-621-7169
Fax: 888-235-8405
Fairfax Law Office Map

Rockville Office
199 E. Montgomery Avenue
Suite 100
Rockville, MD 20850

Phone: 240-599-5009
Fax: 888-235-8405
Rockville Law Office Map

Baltimore Office
400 East Pratt Street
8th Floor
Baltimore, MD 21202

Phone: 443-743-3381
Fax: 888-235-8405
Baltimore Law Office Map