IRS form CP3219A Notice of Deficiency for Unreported RSU Income - What to Do?

This is unfortunately a common issue with RSUs. Here's what's likely happening: your broker reported the stock sales to the IRS on a 1099-B, but the IRS doesn't automatically know these were RSUs already reported on your W-2. They're essentially "double-counting" the income. When you receive RSUs, the fair market value at vesting is considered taxable income and appears on your W-2. If shares were sold to cover taxes, those sales appear on the 1099-B from your broker. When filing, you need to properly report both documents but adjust your cost basis on the 1099-B transactions to avoid being taxed twice. Make sure your response includes a completed Schedule D and Form 8949 showing the correct adjusted basis for each RSU sale transaction. The key is proving you already paid taxes on the income reported in the CP3219A notice. Include a clear explanation letter that connects each transaction on the broker's list to your W-2 income.

After getting tangled in a similar RSU mess last year, I found this amazing AI tool that helped sort everything out - https://taxr.ai I was completely confused about how to document everything properly for my response to the IRS. The tool analyzed all my RSU documentation, my W-2, and the CP3219A notice, then guided me through exactly what forms I needed and how to explain the situation to the IRS. It even created a detailed letter template that connected each transaction to my W-2 reporting. The biggest help was that it identified exactly which transactions were being double-counted and showed me the precise cost basis adjustments needed on Form 8949. Saved me hours of stress!

I initially thought these AI tax tools were just hype, but after struggling with my CP3219A notice related to my RSUs, I gave https://taxr.ai a try based on recommendations here. Completely changed my experience! The tool identified exactly where the disconnect was happening between my W-2 reporting and the 1099-B from my broker. It turns out I had completely botched the cost basis adjustment on several vesting events where I sold some shares immediately but held others. The document package it created for my IRS response was incredibly detailed - it matched each transaction the IRS was questioning to the specific line items on my W-2 and broker statements. Just received confirmation last week that my case is resolved with no additional taxes owed!

For anyone dealing with these IRS notices, I HIGHLY recommend using Claimyr (https://claimyr.com) to actually speak with an IRS agent directly about your case. I spent WEEKS trying to call the IRS about my CP3219A notice (which was also about RSUs), and kept getting the "call back later" message. Using Claimyr got me through to an actual IRS agent within 2 hours after weeks of failed attempts. They have this system that holds your place in line and calls you when an agent is available - you can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent walked me through exactly what documentation they needed to resolve my case and gave me a direct fax number to send everything to. Got confirmation that my case was resolved correctly within 3 weeks instead of waiting months for a mail response.

I have to admit I was completely wrong about Claimyr. After reading about it here, I was desperate enough with my CP3219A situation to try it. Within about 90 minutes of signing up, my phone rang and there was an actual IRS agent on the line! I explained my RSU situation and the confusion with the CP3219A notice. The agent confirmed exactly what others here mentioned - the IRS was double-counting my RSU income because they saw the broker's 1099-B but didn't connect it to what was already reported on my W-2. The agent provided me with a specific fax number and told me exactly what documentation to send. They even added notes to my file about our conversation. Received confirmation yesterday that my case was closed with no additional tax owed. Saved me thousands of dollars and months of stress!

The thing that most people miss with RSUs is the basis reporting on Form 8949. When your RSUs vest, the FMV becomes your W-2 income AND becomes your cost basis for those shares. If you sold shares to cover taxes, you need to report those sales with the adjusted basis. Here's how to fix this: 1) Get your original Form 8949 that you filed 2) Create a corrected version showing the proper basis for each RSU transaction 3) Include a statement explaining the connection between your W-2 RSU income and the 1099-B transactions 4) Reference IRS Publication 525 which specifically addresses RSU taxation The most important part is proving that you're not trying to avoid taxes - you already paid them through your W-2 withholding at vesting.

I had almost the EXACT same situation last year! My CP3219A was for $12,450 in supposedly unreported income from RSUs. Here's what worked for me: 1. I called my broker and had them create a special statement that specifically showed which 1099-B transactions were from RSU vesting events 2. Got a letter from my employer confirming the exact RSU value included in my W-2 Box 1 3. Created a spreadsheet matching each RSU transaction to the corresponding vesting date and W-2 income 4. Wrote a cover letter explaining the double-counting mistake 5. Filed Form 8949 with a statement in column (f) for each transaction saying "BASIS ALREADY REPORTED AS INCOME ON W-2" The IRS accepted everything and closed the case. Don't panic - this is fixable!