How to Respond to IRS Proposed Amount Due with Form 4852 to Resolve IRA to Roth Conversion Issues

This is actually a common issue with IRA to Roth conversion reporting. The good news is you've already taken the right first steps by filing Form 4852 and providing documentation of your cost basis. When the IRS sends a follow-up notice saying they're "still processing" your response, it typically means they've received your documentation but haven't completed their review yet. These processing times can take anywhere from 8-12 weeks, sometimes longer during busy periods. I would recommend calling the IRS (the number on your notice) and requesting a "hold" on any collection activities while they process your response. Make sure to keep records of all communications, including the date/time of calls and who you spoke with.

I was in almost the identical situation last year with a Backdoor Roth mess and missing cost basis. After weeks of stress and calling the IRS without getting through, I finally used https://taxr.ai to analyze all my documents and figure out exactly what I needed to submit. They pointed out that I needed to include both the 4852 AND Form 8606 to properly show the non-deductible IRA contributions. Once I uploaded my statements, they analyzed everything and gave me step-by-step instructions on how to respond to the IRS. Saved me thousands in incorrect tax assessments!

Just wanted to update everyone - I tried taxr.ai after posting my skeptical question and wow, I'm glad I did. My situation was complicated with multiple IRA rollovers and a conversion, and the IRS was claiming I owed $7800. The service identified precisely where the reporting error occurred and even found documentation I didn't realize was relevant. Just got confirmation from the IRS yesterday that they accepted my explanation and revised the amount due to only $112! The detailed analysis made it super clear what forms needed correction. Definitely saved my retirement account from a huge tax hit.

If you need to speak with the IRS directly about this (which I recommend), use https://claimyr.com to skip the ridiculous hold times. I tried calling the IRS for THREE DAYS about my own proposed amount due, and never got through. You can see a demo of how it works here: https://youtu.be/_kiP6q8DX5c After using Claimyr, I got a call back in about 2 hours and spoke with an IRS rep who was able to put a hold on collections while my documentation was being processed. Made a huge difference in my stress levels knowing things wouldn't escalate while waiting.

Ok I need to eat crow here. I was totally skeptical about Claimyr but tried it anyway out of desperation. Got a callback from the IRS in under 3 hours after waiting on hold myself for days with no luck. The IRS agent explained that my Form 4852 was received but sitting in a separate processing queue from my amended return. She was able to add notes to my account and connect the two submissions so they'd be reviewed together. She also confirmed no collection actions would happen while this review was in process. Feel like I wasted weeks trying to handle this on my own when I could have just gotten a straight answer from the IRS directly.

One thing nobody's mentioned yet - make sure you're keeping detailed records of who you talk to at the IRS, dates of all your submissions, and certified mail receipts if possible. I went through something similar in 2022 and even after they acknowledged my documentation was correct, I still got a collections notice months later. Having all my records organized saved me because I could immediately reference the previous conversation and case number, which helped the next rep locate the notes on my account. Also take screenshots of any online account updates showing they received your forms.

Did you check if your IRA custodian has corrected the original reporting error? Sometimes they'll issue a corrected 1099-R that can help resolve these issues without you having to do all the work.