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rated:
I made some quick stock trades, positions I held maybe only for a few days or a few weeks back when I was 21-22 years old in 2002.

I may have made all but $30 to $70 on these trades.  I don't remember what stocks I bought or the sold/bought dates.

The IRS apparently never knew what I bought the positions for and has been asking me to pay a much, much higher amount in taxes ever since 2002.  (Maybe they are basing the tax rate on the sale of the stock if I had bought the stocks at zero, I am guessing.)

The IRS wanted $4861.94 + $1279.92 (interest) = $6141.86 by December 26, 2016, according to a letter received from the IRS dated December 5, 2016.  There is no way I owe anywhere near this amount on stock trades that may have profited some $30 to $70 over an entire year.

I called ETrade , and they have no evidence of transactions going that far back.

I was a dependent at the time, but my parents' IRS account has not been impacted at all, only me.  Because I was a dependent and I had very little income from small contract work, I never filed a tax return myself.  In other neighboring years when I made stock trades as a dependent and also had small income from contract work, my dad simply asked me for documentation from my ETrade and Datek accounts, and he took care of all the paperwork and filings.  The same should have happened in 2002.  Everything went through smoothly in the other years (1996 onwards -- no problems at all).

The issue is not new.  The IRS has been looking for information on these trades since 2002.  There is no new audit or anything.  I had just never attacked the issue.

At one point years back, the IRS took all the cash I had out from one of my accounts, some $300 to $700 or more.  I don't believe I have a "lien" on me or anything serious like that.

I don't currently have any bank accounts, only stocks in an ETrade account, but there is also about $800 to $900 cash in that account.

Man, I really, really wish ETrade or somebody had access to my old stock trade records.  That way, I could prove to the IRS that I really don't owe them that much.  And, I think, this is all the IRS has always been looking for.

I might have some old paper statements of trade confirmations and monthly ETrade statements in storage going that far back.  But they will be almost impossible to find.

What can I do to prove to the IRS that I do not owe them as much as they currently have listed in my IRS account?  What can I do overall?

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rated:
Did you get any email confirmations for the trades in 2002?

On a different note, since when has the IRS been looking at this. Is this a recent audit of old returns? Doubtful since I would think the statute of limitations must have run out. If IRS asked fr it closer to 2002, you would have had a much better chance following up with ETrade for the records.

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fwuser12 said:   Did you get any email confirmations for the trades in 2002?

On a different note, since when has the IRS been looking at this. Is this a recent audit of old returns? Doubtful since I would think the statute of limitations must have run out. If IRS asked fr it closer to 2002, you would have had a much better chance following up with ETrade  for the records.

  There is no statute of limitations if OP never filed a tax return.

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fwuser12 said:   Did you get any email confirmations for the trades in 2002?

On a different note, since when has the IRS been looking at this. Is this a recent audit of old returns? Doubtful since I would think the statute of limitations must have run out. If IRS asked fr it closer to 2002, you would have had a much better chance following up with ETrade  for the records.

  

I can try to look for e-mail records.

The IRS has been looking at this since the very year it occurred, 2002.  There is no new audit or anything.  I had just never attacked the issue.

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anybody else have advice?

what other online forums could I post in that you guys know about?

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First the good news:

The fact that ETrade  no longer has records of your trades is not a problem : you can easily reconstruct the prices you paid based on when you bought them. You seem fairly sure you only held the stock a few days or weeks, so just estimate the date and look up the closing price on the exchange for those dates. The IRS will have no problem accepting those dates & values. Even if you got the dates slightly wrong, the IRS has no way to knowing you got them wrong, since only you and ETrade  know when you bought them. You just need to file an amended tax return with an updated Schedule D.

Now the slightly bad news:

You have a total of 3 years from the time of the original due date (April 15, 2003), to file an amended return. If the IRS notified you of your failure to report the sale of the stock after April 15, 2006, the statute of limitations would have run already (absent claims of fraud by the IRS), so I am assuming they notified you before April 15, 2006. Your failure to filed an amended return by the later of April 15, 2006 OR the deadline specified by the notification you got from the IRS may mean that you are now stuck with the IRS's position that you bought the stock long ago for zero. Your only out is that the IRS has a 10 year time limit to collect any taxes owed plus penalties (from the time they were originally due). Looks like this should already have happened, so you no longer owe any taxes due from stock sales on 2002, but statutes of limitation laws are tricky so you may want to contact a tax lawyer if the IRS is still sending you demand for payment of taxes from 2002.

If you never filed any tax return for 2002, then the statute of limitation has not yet expired. In that case you need to contact a tax specialist to find the best solution for the mess you are in. In theory if you did not owe any taxes in 2002, you can still file the tax return : there is no 3 year limit on filing a tax return if you owe no money, you just can't claim any tax refund based on a late filed tax return. If you file the (late) return for 2002 in Aug 2017, the IRS has 3 years (till Aug 2020) to audit the return, and  another10 years to collect on any deficiency they assess. Make sure to file the return correctly, since you will NOT be able to amend the return.

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ananthar said:   First the good news:

The fact that ETrade  no longer has records of your trades is not a problem : you can easily reconstruct the prices you paid based on when you bought them. You seem fairly sure you only held the stock a few days or weeks, so just estimate the date and look up the closing price on the exchange for those dates. The IRS will have no problem accepting those dates & values. Even if you got the dates slightly wrong, the IRS has no way to knowing you got them wrong, since only you and ETrade  know when you bought them. You just need to file an amended tax return with an updated Schedule D.

Now the slightly bad news:

You have a total of 3 years from the time of the original due date (April 15, 2003), to file an amended return. If the IRS notified you of your failure to report the sale of the stock after April 15, 2006, the statute of limitations would have run already (absent claims of fraud by the IRS), so I am assuming they notified you before April 15, 2006. Your failure to filed an amended return by the later of April 15, 2006 OR the deadline specified by the notification you got from the IRS may mean that you are now stuck with the IRS's position that you bought the stock long ago for zero. Your only out is that the IRS has a 10 year time limit to collect any taxes owed plus penalties (from the time they were originally due). Looks like this should already have happened, so you no longer owe any taxes due from stock sales on 2002, but statutes of limitation laws are tricky so you may want to contact a tax lawyer if the IRS is still sending you demand for payment of taxes from 2002.

If you never filed any tax return for 2002, then the statute of limitation has not yet expired. In that case you need to contact a tax specialist to find the best solution for the mess you are in. In theory if you did not owe any taxes in 2002, you can still file the tax return : there is no 3 year limit on filing a tax return if you owe no money, you just can't claim any tax refund based on a late filed tax return. If you file the (late) return for 2002 in Aug 2017, the IRS has 3 years (till Aug 2020) to audit the return, and  another10 years to collect on any deficiency they assess. Make sure to file the return correctly, since you will NOT be able to amend the return.

 
 what constitutes "filing a return" given the following:

I was a dependent at the time, but my parents' IRS account has not been impacted at all, only me.  Because I was a dependent and I had very little income from small contract work, I never filed a tax return myself.  In other neighboring years when I made stock trades as a dependent and also had small income from contract work, my dad simply asked me for documentation from my ETrade and Datek accounts, and he took care of all the paperwork and filings.  The same should have happened in 2002.  Everything went through smoothly in the other years (1996 onwards -- no problems at all).

So, as indicated above, I never had to "file a return" as a dependent with very little income.  I guess a return did need to be filed on stock trades, and, yes, that part didn't happen.  Does that mean I have not passed the 10-year statue of limitations?  Or does whatever my dad did in 2002 constitute "having filed a return"?

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quickfatwallet said:   
ananthar said:   First the good news:

The fact that ETrade  no longer has records of your trades is not a problem : you can easily reconstruct the prices you paid based on when you bought them. You seem fairly sure you only held the stock a few days or weeks, so just estimate the date and look up the closing price on the exchange for those dates. The IRS will have no problem accepting those dates & values. Even if you got the dates slightly wrong, the IRS has no way to knowing you got them wrong, since only you and ETrade  know when you bought them. You just need to file an amended tax return with an updated Schedule D.

Now the slightly bad news:

You have a total of 3 years from the time of the original due date (April 15, 2003), to file an amended return. If the IRS notified you of your failure to report the sale of the stock after April 15, 2006, the statute of limitations would have run already (absent claims of fraud by the IRS), so I am assuming they notified you before April 15, 2006. Your failure to filed an amended return by the later of April 15, 2006 OR the deadline specified by the notification you got from the IRS may mean that you are now stuck with the IRS's position that you bought the stock long ago for zero. Your only out is that the IRS has a 10 year time limit to collect any taxes owed plus penalties (from the time they were originally due). Looks like this should already have happened, so you no longer owe any taxes due from stock sales on 2002, but statutes of limitation laws are tricky so you may want to contact a tax lawyer if the IRS is still sending you demand for payment of taxes from 2002.

If you never filed any tax return for 2002, then the statute of limitation has not yet expired. In that case you need to contact a tax specialist to find the best solution for the mess you are in. In theory if you did not owe any taxes in 2002, you can still file the tax return : there is no 3 year limit on filing a tax return if you owe no money, you just can't claim any tax refund based on a late filed tax return. If you file the (late) return for 2002 in Aug 2017, the IRS has 3 years (till Aug 2020) to audit the return, and  another10 years to collect on any deficiency they assess. Make sure to file the return correctly, since you will NOT be able to amend the return.

 
 what constitutes "filing a return" given the following:

I was a dependent at the time, but my parents' IRS account has not been impacted at all, only me.  Because I was a dependent and I had very little income from small contract work, I never filed a tax return myself.  In other neighboring years when I made stock trades as a dependent and also had small income from contract work, my dad simply asked me for documentation from my ETrade  and Datek accounts, and he took care of all the paperwork and filings.  The same should have happened in 2002.  Everything went through smoothly in the other years (1996 onwards -- no problems at all).

So, as indicated above, I never had to "file a return" as a dependent with very little income.  I guess a return did need to be filed on stock trades, and, yes, that part didn't happen.  Does that mean I have not passed the 10-year statue of limitations?  Or does whatever my dad did in 2002 constitute "having filed a return"?

  
The problem is without providing a cost basis to the IRS, they assume you paid $0 for the stock in question. I'm guessing when you look at the sales price of the stock through a lens that has you paying $0 for it, your income is not so little. The fact you're a dependent and you have little contracting income means nothing. Regardless of your age, if you receive taxable income that's reported by third parties (on 1099's, etc) and do not file your taxes, the IRS will compute the tax you owe based the information provided by those third parties using the least favorable situations for you ($0 cost basis, single, dependent, etc). It's up to you to provide information for more favorable tax status (such as providing a cost basis). A person who has say $1,000 in reported taxable income, even with the IRS "worse case" calculations, will show them having a $0 tax due and the IRS won't hassle them even if they don't file.

How much we talking about here? If it's $500 or something it's probably easier just to pay it and mark as a lesson learned. Not trying to beat a dead horse, but waiting 15 years to attack the issue is bulk of the problem. Pretty much any financial company is only going to keep records for 7 years which is I believe the minimum they are required to.  

rated:
vegas4x4 said:   
quickfatwallet said:   
ananthar said:   First the good news:

The fact that ETrade  no longer has records of your trades is not a problem : you can easily reconstruct the prices you paid based on when you bought them. You seem fairly sure you only held the stock a few days or weeks, so just estimate the date and look up the closing price on the exchange for those dates. The IRS will have no problem accepting those dates & values. Even if you got the dates slightly wrong, the IRS has no way to knowing you got them wrong, since only you and ETrade  know when you bought them. You just need to file an amended tax return with an updated Schedule D.

Now the slightly bad news:

You have a total of 3 years from the time of the original due date (April 15, 2003), to file an amended return. If the IRS notified you of your failure to report the sale of the stock after April 15, 2006, the statute of limitations would have run already (absent claims of fraud by the IRS), so I am assuming they notified you before April 15, 2006. Your failure to filed an amended return by the later of April 15, 2006 OR the deadline specified by the notification you got from the IRS may mean that you are now stuck with the IRS's position that you bought the stock long ago for zero. Your only out is that the IRS has a 10 year time limit to collect any taxes owed plus penalties (from the time they were originally due). Looks like this should already have happened, so you no longer owe any taxes due from stock sales on 2002, but statutes of limitation laws are tricky so you may want to contact a tax lawyer if the IRS is still sending you demand for payment of taxes from 2002.

If you never filed any tax return for 2002, then the statute of limitation has not yet expired. In that case you need to contact a tax specialist to find the best solution for the mess you are in. In theory if you did not owe any taxes in 2002, you can still file the tax return : there is no 3 year limit on filing a tax return if you owe no money, you just can't claim any tax refund based on a late filed tax return. If you file the (late) return for 2002 in Aug 2017, the IRS has 3 years (till Aug 2020) to audit the return, and  another10 years to collect on any deficiency they assess. Make sure to file the return correctly, since you will NOT be able to amend the return.

 
 what constitutes "filing a return" given the following:

I was a dependent at the time, but my parents' IRS account has not been impacted at all, only me.  Because I was a dependent and I had very little income from small contract work, I never filed a tax return myself.  In other neighboring years when I made stock trades as a dependent and also had small income from contract work, my dad simply asked me for documentation from my ETrade  and Datek accounts, and he took care of all the paperwork and filings.  The same should have happened in 2002.  Everything went through smoothly in the other years (1996 onwards -- no problems at all).

So, as indicated above, I never had to "file a return" as a dependent with very little income.  I guess a return did need to be filed on stock trades, and, yes, that part didn't happen.  Does that mean I have not passed the 10-year statue of limitations?  Or does whatever my dad did in 2002 constitute "having filed a return"?

  
The problem is without providing a cost basis to the IRS, they assume you paid $0 for the stock in question. I'm guessing when you look at the sales price of the stock through a lens that has you paying $0 for it, your income is not so little. The fact you're a dependent and you have little contracting income means nothing. Regardless of your age, if you receive taxable income that's reported by third parties (on 1099's, etc) and do not file your taxes, the IRS will compute the tax you owe based the information provided by those third parties using the least favorable situations for you ($0 cost basis, single, dependent, etc). It's up to you to provide information for more favorable tax status (such as providing a cost basis). A person who has say $1,000 in reported taxable income, even with the IRS "worse case" calculations, will show them having a $0 tax due and the IRS won't hassle them even if they don't file.

How much we talking about here? If it's $500 or something it's probably easier just to pay it and mark as a lesson learned. Not trying to beat a dead horse, but waiting 15 years to attack the issue is bulk of the problem. Pretty much any financial company is only going to keep records for 7 years which is I believe the minimum they are required to.  
 

  

The IRS wants $4861.94 + $1279.92 (interest) = $6141.86, as of December 26, 2016.  There is no way I owe anywhere near this amount on stock trades that may have profitted some $30 to $70.

rated:
 
As a dependent you can chose to have your parents include your income in their return as long as it does not exceed some maximum amount (around $6000 in wages and $1000 in investment income) : If you earned more than that, even if you were a dependent, you are required to file your own return.

Looks like if you had correctly reported your stock sales in 2002 to your Dad, and your total profit (including any other interest/dividends/cap-gains in 2002) was under $1000 that would have been fine. As soon as you were notified by the IRS about the stock sales that you didn't report, you should have got your Dad to file an amended return : unfortunately the deadline for your Dad to file an amended return was April 15, 2006 so it is too late. 

I would ask a tax specialist if you can still file your own tax return for 2002 and report just the missed stock trades on Schedule D (with purchase price estimated). As a depended on someone else's tax return your taxes are computed differently, but you can still file your own tax return. However I am not sure if you then need to report all your income from 2002 (including what your Dad already reported), and end up paying taxes on that income a 2nd time. Even if that is the case, you probably would still come out ahead, even including the penalties for late filing (which is limited to some maximum percentage of the taxes owed on the 2002 return).

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Do you know what stocks were involved?  You can get historical pricing to estimate your purchase price.  What's the worst case, if you sold at the highest price of the year and bought at the lowest?

 

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quickfatwallet said:   
 
The IRS has been looking at this since the very year it occurred, 2002.  There is no new audit or anything.  I had just never attacked the issue.

  Well there's your problem. You should have taken care if this back when you first got the IRS notice.

rated:
Glitch99 said:   Do you know what stocks were involved?  You can get historical pricing to estimate your purchase price.  What's the worst case, if you sold at the highest price of the year and bought at the lowest?

 

  
I don't know what stocks were involved.  Would the IRS know this?  

rated:
ananthar said:   
 
As a dependent you can chose to have your parents include your income in their return as long as it does not exceed some maximum amount (around $6000 in wages and $1000 in investment income) : If you earned more than that, even if you were a dependent, you are required to file your own return.

Looks like if you had correctly reported your stock sales in 2002 to your Dad, and your total profit (including any other interest/dividends/cap-gains in 2002) was under $1000 that would have been fine. As soon as you were notified by the IRS about the stock sales that you didn't report, you should have got your Dad to file an amended return : unfortunately the deadline for your Dad to file an amended return was April 15, 2006 so it is too late. 

I would ask a tax specialist if you can still file your own tax return for 2002 and report just the missed stock trades on Schedule D (with purchase price estimated). As a depended on someone else's tax return your taxes are computed differently, but you can still file your own tax return. However I am not sure if you then need to report all your income from 2002 (including what your Dad already reported), and end up paying taxes on that income a 2nd time. Even if that is the case, you probably would still come out ahead, even including the penalties for late filing (which is limited to some maximum percentage of the taxes owed on the 2002 return).
 

  

yes, my income was definitely less than 6k.

my investment income I am almost certain was less than 1k.

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quickfatwallet said:   
Glitch99 said:   Do you know what stocks were involved?  You can get historical pricing to estimate your purchase price.  What's the worst case, if you sold at the highest price of the year and bought at the lowest?

 

  
I don't know what stocks were involved.  Would the IRS know this?  

  They're basing their claim on something tangible.  Most likely your broker reported to them the stock symbol(s) and total sale proceeds.

Is your brokerage account still open?  Rather than transactional data, do they still have year-end reporting information or account summaries?  I find it hard to believe they dont still have your account statements from back then, although you'd probably have to pay research fees to dig them up.

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OP, you failed to provide the IRS with your cost basis in the stocks you sold, so in their eyes, there was zero basis and the full amount of the stock sales was taxable.  It is not (well, at the time it was not, but now it is) up to ETrade to calculate your taxable gain & report it to the IRS.  I would call ETrade again & try to dig up anything you can find.  Otherwise, you may need to call the IRS and ask them which stocks they are showing gains for.  Not to beat you up over this, but you really should have addressed this 15 years ago when you became aware that it was a problem.  The IRS doesn't typically just drop things if they don't hear from you.  The amount of time that has elapsed makes it more difficult for you to track down records of what actually happened, which means it is more difficult for you to substantiate your cost basis.  If you can figure out which stocks were involved, you can look up historical pricing & provide that as your basis, it should be close enough...ETrade wouldn't have reported a basis amount to them, so they have no way to track it any more than you do.  Good luck, but I hope you've learned a lesson in terms of handling your responsibilities rather than just letting something go for so long.

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quickfatwallet said:   
Glitch99 said:   Do you know what stocks were involved?  You can get historical pricing to estimate your purchase price.  What's the worst case, if you sold at the highest price of the year and bought at the lowest?

 

  
I don't know what stocks were involved.  Would the IRS know this?  

  Glitch's suggestion is a good one.   That worst case is almost certainly worse than reality but it will probably be much better than the IRS number.   Why don't you talk to IRS to see if they have the
individual stock info.   I kinda doubt it since I would think the 1099B would be similar to yours.....only gives a total sale amount and not detail......but worth asking about just in case...........






 

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this can't happen now right? 1099Bs give cost basis now right?

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quickfatwallet said:   
Glitch99 said:   Do you know what stocks were involved?  You can get historical pricing to estimate your purchase price.  What's the worst case, if you sold at the highest price of the year and bought at the lowest?

 

  
I don't know what stocks were involved.  Would the IRS know this?  

  

I think this is your biggest problem.  Seems like IRS finally gave up trying to get the right information on you and just assumed that you entire proceeds is taxable.  Since you have no idea what trades you made, and ETrade has no record, It seems like you out of luck.  Just pay the amount so that the interest doesn't keep racking up.

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needhelpplease said:   this can't happen now right? 1099Bs give cost basis now right?
  They do.   But it can be incorrect so you are still responsible for checking accuracy (and adjusting the values if incorrect).

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Glitch99 said:   
quickfatwallet said:   
Glitch99 said:   Do you know what stocks were involved?  You can get historical pricing to estimate your purchase price.  What's the worst case, if you sold at the highest price of the year and bought at the lowest?

 

  
I don't know what stocks were involved.  Would the IRS know this?  

  They're basing their claim on something tangible.  Most likely your broker reported to them the stock symbol(s) and total sale proceeds.

Is your brokerage account still open?  Rather than transactional data, do they still have year-end reporting information or account summaries?  I find it hard to believe they dont still have your account statements from back then, although you'd probably have to pay research fees to dig them up.

  
Yes, my ETrade account is still open and has stocks and cash in it.  Yes, I to was surprised I could not find anything earlier than 2010.  In speaking with them on the phone, they said there is not recourse for any data past 7 years.  Is this accurate?  Who else could I call at ETrade ?   

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raringvt said:   OP, you failed to provide the IRS with your cost basis in the stocks you sold, so in their eyes, there was zero basis and the full amount of the stock sales was taxable.  It is not (well, at the time it was not, but now it is) up to ETrade  to calculate your taxable gain & report it to the IRS.  I would call ETrade  again & try to dig up anything you can find.  Otherwise, you may need to call the IRS and ask them which stocks they are showing gains for.  Not to beat you up over this, but you really should have addressed this 15 years ago when you became aware that it was a problem.  The IRS doesn't typically just drop things if they don't hear from you.  The amount of time that has elapsed makes it more difficult for you to track down records of what actually happened, which means it is more difficult for you to substantiate your cost basis.  If you can figure out which stocks were involved, you can look up historical pricing & provide that as your basis, it should be close enough...ETrade  wouldn't have reported a basis amount to them, so they have no way to track it any more than you do.  Good luck, but I hope you've learned a lesson in terms of handling your responsibilities rather than just letting something go for so long.
  Do you think the IRS will have ticker symbols and buy/sell dates saved if ETrade sent that to them?

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needhelpplease said:   this can't happen now right? 1099Bs give cost basis now right?
  wish I knew

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kaneohe said:   
quickfatwallet said:   
Glitch99 said:   Do you know what stocks were involved?  You can get historical pricing to estimate your purchase price.  What's the worst case, if you sold at the highest price of the year and bought at the lowest?

 

  
I don't know what stocks were involved.  Would the IRS know this?  

  Glitch's suggestion is a good one.   That worst case is almost certainly worse than reality but it will probably be much better than the IRS number.   Why don't you talk to IRS to see if they have the
individual stock info.   I kinda doubt it since I would think the 1099B would be similar to yours.....only gives a total sale amount and not detail......but worth asking about just in case...........






 

  will do  thank you

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https://www.irs.gov/irm/part5/irm_05-001-019.html

5.1.19.3.15 (01-01-2006) Substitute for Return

1.When a taxpayer fails to file a timely income tax return or files a false or fraudulent return, the Service may execute a return under the authority of the IRC 6020(b) deficiency procedures. If the taxpayer fails to respond to the 90 day notice, the Service makes a deficiency assessment. The Service may also make a deficiency assessment if the deficiency is upheld by the Tax Court. Upon that assessment, the 10 year period of limitations on collection, provided for in IRC 6502(a)(1) begins.     




If it turns out my Collection Statute Expiration Date is within the next two years or so, is it still too risky to "ride it out". Is the IRS going to go after me harder as the date approaches with credit reporting, liens, lawsuits? I don't want anything like that to happen. At the same time, it might make logical sense to wait for the 10-years to expire given the fact that I will have to search long and hard for the records.

rated:
Bend3r said:   
needhelpplease said:   this can't happen now right? 1099Bs give cost basis now right?
  They do.   But it can be incorrect so you are still responsible for checking accuracy (and adjusting the values if incorrect).

Moreover, reporting of basis gets done only for stocks bought after the recent regulations went into effect  (and as Bend3r said, you still need to check whether they are reported correctly). 
For stocks you have held for a long time (prior to this requirement to report basis went into effect), your broker may not have any basis information to report.
 

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quickfatwallet said:    
Yes, my ETrade  account is still open and has stocks and cash in it.  Yes, I to was surprised I could not find anything earlier than 2010.  In speaking with them on the phone, they said there is not recourse for any data past 7 years.  Is this accurate?  Who else could I call at ETrade  ?   
 

  
This is one of the big pitfalls of the switch to online only statements. Once the 7 year document retention requirement passes, if you didn't print them out you may be SOL.

This happened to me with an old check I was was looking for to prove how much of a deposit I put on something.

rated:
quickfatwallet said:   
If it turns out my Collection Statute Expiration Date is within the next two years or so, is it still too risky to "ride it out". Is the IRS going to go after me harder as the date approaches with credit reporting, liens, lawsuits? I don't want anything like that to happen. At the same time, it might make logical sense to wait for the 10-years to expire given the fact that I will have to search long and hard for the records.
 

  
The lesson you were supposed to learn from all this was "never ignore the IRS". Please take that to heart now. Things will only get worse and interest will accrue.

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needhelpplease said:   this can't happen now right? 1099Bs give cost basis now right?
  
that was a sad day when the irs started requiring that info to be reported to them.

it closed one of the greatest loopholes available to common folks.

it was bound to happen, with the advances in technology, but before this, it was a goldmine.

to give u an example, lets say i bought apple at $10 and sold it at $700.  all the irs would see is u sold it for $700, it's up to u to tell them the rest. of course people would say they bought it at $690, or even at a loss if u were really greedy.

man, i miss those days.

rated:
UncleJr said:   
needhelpplease said:   this can't happen now right? 1099Bs give cost basis now right?
  
that was a sad day when the irs started requiring that info to be reported to them.

it closed one of the greatest loopholes available to common folks.

it was bound to happen, with the advances in technology, but before this, it was a goldmine.

to give u an example, lets say i bought apple at $10 and sold it at $700.  all the irs would see is u sold it for $700, it's up to u to tell them the rest. of course people would say they bought it at $690, or even at a loss if u were really greedy.

man, i miss those days.

  

would this have been within legal bounds or considered fraudulent if an audit had taken place?  

rated:
quickfatwallet said:   
UncleJr said:   
needhelpplease said:   this can't happen now right? 1099Bs give cost basis now right?
  
that was a sad day when the irs started requiring that info to be reported to them.

it closed one of the greatest loopholes available to common folks.

it was bound to happen, with the advances in technology, but before this, it was a goldmine.

to give u an example, lets say i bought apple at $10 and sold it at $700.  all the irs would see is u sold it for $700, it's up to u to tell them the rest. of course people would say they bought it at $690, or even at a loss if u were really greedy.

man, i miss those days.

  

would this have been within legal bounds or considered fraudulent if an audit had taken place?  

Fraud if they could prove it.  

rated:
UncleJr said:   
needhelpplease said:   this can't happen now right? 1099Bs give cost basis now right?
  
that was a sad day when the irs started requiring that info to be reported to them.

it closed one of the greatest loopholes available to common folks.

it was bound to happen, with the advances in technology, but before this, it was a goldmine.

to give u an example, lets say i bought apple at $10 and sold it at $700.  all the irs would see is u sold it for $700, it's up to u to tell them the rest. of course people would say they bought it at $690, or even at a loss if u were really greedy.

man, i miss those days.

  Statement that you sign on form 1040:
IRS form 1040 said: Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and accurately list all amounts and sources of income I received during the tax year. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
 

rated:
Summarize your correspondence history with them. Did they reject your explanation when you responded to the notice of deficiency? Or did you just ignore it for 15 years? I'd either file or amend your 2002 return with the correct info. Make a reasonable estimate of your basis based on historical pricing if you don't have records.  And every year after that too if you didn't file. Filing starts the clock on the SOL, which could otherwise be forever as others mentioned here.  You don't want to have to do this every year.

It would probably be easier to just hire a tax attorney to deal with this. It's serious now that that they've attached your bank account, If you don't have any tax liability for 2002, maybe they can negotiate it down to only paying the failure to file penalty or maybe nothing. Of course, you'll have to pay the tax attorney.

rated:
quickfatwallet said:   Yes, my ETrade  account is still open and has stocks and cash in it.  Yes, I to was surprised I could not find anything earlier than 2010.  In speaking with them on the phone, they said there is not recourse for any data past 7 years.  Is this accurate?  Who else could I call at ETrade  ?   
I doubt there is anyone else to call. Companies generally destroy records as soon as legally possible to limit their future liability (can't produce for a lawsuit what has been destroyed).

The timeframe in which your dealing with, the brokerages didn't transmit any detailed information (stocks, trade dates, cost basis, etc.) to the IRS so I don't think you'll find anything going down that route.

Unless you can dig up some records, I suspect you'll need to pay the amount or work out some payment plan.

rated:
sfchris said:   
quickfatwallet said:    
Yes, my ETrade  account is still open and has stocks and cash in it.  Yes, I to was surprised I could not find anything earlier than 2010.  In speaking with them on the phone, they said there is not recourse for any data past 7 years.  Is this accurate?  Who else could I call at ETrade  ?   

  
This is one of the big pitfalls of the switch to online only statements. Once the 7 year document retention requirement passes, if you didn't print them out you may be SOL.
 

  
OP couldn't be bothered to file a tax return for 15 years even after multiple letters from the IRS, what are the chances they'd even look at the statement let alone save it for a decade and a half?

rated:
quickfatwallet said:   
Glitch99 said:   Do you know what stocks were involved?  You can get historical pricing to estimate your purchase price.  What's the worst case, if you sold at the highest price of the year and bought at the lowest?

 

  
I don't know what stocks were involved.  Would the IRS know this?  

  I wonder if something like this would help.    I was trying to remember my doctor's nurse's name before I made the OV so I wouldn't be embarrassed cuz I've known her for 20 yrs.   Did a google search for
ladies names and hoped that a check of that list would jog my memory.   Could not find it .......seems it's old fashioned and wasn't listed.    You know the kind of stocks you used to buy and what exchange they would be on............what if you did a search for stocks on xxxx exchange.......perhaps a look thru those names would refresh your memory.   You could then create a list and then do glitch's calculation.
It wouldn't be ideal but it wouldn't be complete fiction..........maybe semi-fiction and depending on the IRS examiner's mood,perhaps it might get you off the hook.  It would certainly be closer to the truth than
the default 0 basis that IRS assumes.    This, of course, only if IRS doesn't have the individual stock data which your call to them would tell you.

rated:
At some point, the taxpayers remedies for appeals are exhausted past a certain point. He definitely needs expert advice now.

Also, you can call the IRS and ask. Maybe even anonymously.

rated:
doveroftke said:   
sfchris said:   
quickfatwallet said:    
Yes, my ETrade  account is still open and has stocks and cash in it.  Yes, I to was surprised I could not find anything earlier than 2010.  In speaking with them on the phone, they said there is not recourse for any data past 7 years.  Is this accurate?  Who else could I call at ETrade  ?   

  
This is one of the big pitfalls of the switch to online only statements. Once the 7 year document retention requirement passes, if you didn't print them out you may be SOL.

  
OP couldn't be bothered to file a tax return for 15 years even after multiple letters from the IRS, what are the chances they'd even look at the statement let alone save it for a decade and a half?

  If his investment income was under $1k and total income under $6k(?), he most likely was never required to file a return in the first place.  Providing the correct (or even estimated, if they accept it) cost basis for the stock sales would literally make this go away, it's only an issue because the $0 cost basis results in capital gains above the threshold that requires a return be filed.  He could've easily resolved this by providing the transaction confirmations in response to the initial inquiry 13-ish years ago.  I'm guessing the initial tax bill scared him so he dodged it, instead of getting it fixed so that there was no balance due.

rated:
doveroftke said:   
sfchris said:   
quickfatwallet said:    
Yes, my ETrade  account is still open and has stocks and cash in it.  Yes, I to was surprised I could not find anything earlier than 2010.  In speaking with them on the phone, they said there is not recourse for any data past 7 years.  Is this accurate?  Who else could I call at ETrade  ?   

  
This is one of the big pitfalls of the switch to online only statements. Once the 7 year document retention requirement passes, if you didn't print them out you may be SOL.

  
OP couldn't be bothered to file a tax return for 15 years even after multiple letters from the IRS, what are the chances they'd even look at the statement let alone save it for a decade and a half?

  


I did not discard any past ETrade statements or stock trade confirmations in hard copy as far as I can remember.  I just can't with confidence say I have 2002.  Chances are probable that I do.  Problem is they are buried deep in storage.

I also have not discarded any old e-mails.  They, as well, may be on an old computer's hard drive.  

Skipping 52 Messages...
rated:
UncleJr said:   
needhelpplease said:   this can't happen now right? 1099Bs give cost basis now right?
  
that was a sad day when the irs started requiring that info to be reported to them.

it closed one of the greatest loopholes available to common folks.

it was bound to happen, with the advances in technology, but before this, it was a goldmine.

to give u an example, lets say i bought apple at $10 and sold it at $700.  all the irs would see is u sold it for $700, it's up to u to tell them the rest. of course people would say they bought it at $690, or even at a loss if u were really greedy.

man, i miss those days.

  
What's you're describing is as much of a "loophole" in the tax code as somebody not locking their front door is a "loophole" in the burglary law.

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