Missing Form 8606 for my Roth IRA contributions and now the IRS sent me a CP2000 notice saying I owe taxes

I've been using FreeTaxUSA for filing since 2014 and made post-tax Roth IRA contributions from 2019 through 2021. I never took any deduction for these contributions (since they were post-tax), but I recently realized I never included Form 8606 with any of my tax returns. Now I'm in a mess because the IRS sent me a CP2000 notice saying my withdrawal of contributions is taxable income. They received 1099-R forms from my investment company with "tax status not determined" checked. The withdrawal was about $12,500, and only around $340 of that was earnings. The rest was just my original post-tax contributions that I already paid taxes on! Do I need to go back and file Form 8606 for each of those years I made contributions to prove the money I withdrew was mostly my contributions? I understand I'll need to pay penalty and taxes on the earnings portion, but not on the contributions themselves since that was already taxed income. Has anyone dealt with this situation before? I'm freaking out a little because the notice says I owe almost $3,000 in additional taxes!

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18 comments

Lucas Kowalski

•8M

The good news is that you can absolutely fix this situation. When you make Roth IRA contributions and later withdraw them, Form 8606 is what tells the IRS that you're withdrawing already-taxed money. Without that form, the IRS has no way to know these were post-tax contributions. You should file Form 8606 for each year you made those contributions (2019-2021). You can file these forms separately without having to amend your entire tax returns. This establishes your "basis" in the Roth IRA and proves you already paid taxes on those contributions. When you respond to the CP2000, include copies of these completed 8606 forms along with a letter explaining that the withdrawal was primarily a return of already-taxed contributions. You're right that you'll only owe taxes and the 10% early withdrawal penalty on the $340 in earnings, not on your original contributions.

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Lucas Kowalski

•8M

Yes, you can file Form 8606 by itself without filing a complete 1040X amended return. The IRS specifically allows this for reporting non-deductible contributions. Just complete the form for each applicable year, write "FILED SEPARATELY" at the top, and include your name, address, and SSN. Having documentation from your investment company showing your contribution history is helpful but not required when submitting the forms. However, keep those records in your files in case of future questions. The completed Form 8606 itself is what establishes your basis in the IRA.

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Charlie Yang

•8M

I went through something similar last year and discovered taxr.ai (https://taxr.ai) which saved me so much hassle. I had missing 8606 forms for years of Roth contributions and got hit with a similar CP2000 notice. I uploaded my tax documents and 1099-Rs to their system, and they analyzed everything and generated all the necessary 8606 forms for my missing years plus a customized letter explaining my situation to the IRS. Their tax experts reviewed my specific situation and gave me exact instructions on how to respond to the notice.

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Charlie Yang

•8M

The whole process took about 3 days from when I uploaded my documents to when I received all the completed forms and response letter. They prioritize CP2000 notices because of the response deadlines, so you should have plenty of time within your 30-day window. Yes, their system handles all the basis calculations automatically, even with complex situations like partial conversions or multiple contributions and withdrawals. That was actually the most helpful part for me because the basis reporting on Form 8606 gets complicated when you have multiple years to correct. The forms were perfectly filled out and they provided clear instructions on exactly what to send to the IRS.

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ApolloJackson

•8M

I wanted to follow up about my experience with taxr.ai after getting help with my missing 8606 forms. It worked even better than expected! I uploaded my tax returns and 1099-Rs from the past few years, and they identified exactly where the reporting errors were. They generated accurate 8606 forms for each year I needed plus a clear explanation letter for the IRS. My situation was pretty complicated with multiple contributions and a rollover, but they sorted it all out correctly. The IRS accepted all my forms and canceled the additional tax assessment completely. Definitely worth checking out if you're dealing with Form 8606 issues!

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Isabella Russo

•8M

I had almost exactly this issue last year. Tried calling the IRS for weeks with no success - always disconnected after waiting for hours. Finally used Claimyr (https://claimyr.com) to get through to an actual IRS agent. You can see how it works here: https://youtu.be/_kiP6q8DX5c. The agent reviewed my account while I was on the phone and confirmed that filing the missing 8606 forms would resolve the issue. She even put notes in my account so when I sent in my response to the CP2000, it was processed correctly. Saved me from having to go back and forth with the IRS for months.

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Isabella Russo

•8M

They use a callback system that continuously monitors the IRS phone lines and secures your place in line. When they detect an opening, they call you first, then connect you directly to the next available IRS agent. It's not about jumping the queue - it's about not having to physically stay on hold for hours. They're using the same publicly available IRS phone numbers, but their system handles all the waiting and redialing so you don't have to. I was skeptical too until I tried it. Got connected to an IRS agent within 45 minutes when I had previously spent days trying to get through on my own.

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Aria Washington

•8M

I need to eat my words about Claimyr. After posting my skeptical comment, I decided to try it myself since I've been trying to reach the IRS for 3 weeks about my own CP2000 notice. Within an hour of signing up, I got a call connecting me directly to an IRS representative who actually answered all my questions about my missing 8606 forms. The agent confirmed that filing the missing forms would resolve my issue and even gave me specific instructions on what supporting documents to include. I was able to get everything clarified in one 20-minute call instead of exchanging letters for months. Absolutely worth it if you're facing IRS deadlines.

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Liam O'Reilly

•8M

Something important to understand about Roth IRAs: you can always withdraw your contributions (not earnings) at any time without taxes or penalties. But the catch is you need to have properly documented those contributions with Form 8606 when you made them. The IRS can't just take your word for it years later. I recommend also sending a letter with a spreadsheet showing all your contribution dates and amounts along with your completed 8606 forms. This extra documentation helped me when I was in a similar situation. The more organized your response, the faster the IRS will process it.

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Liam O'Reilly

•8M

A simple Excel spreadsheet that you create is sufficient, but if you can also obtain statements from your brokerage showing the contributions, that would be even better as supporting evidence. I created a straightforward spreadsheet with columns for the date, amount, and tax year of each contribution, then attached copies of year-end statements that verified those contributions. For me, the whole process took about 8 weeks from when I responded to the CP2000 notice until I received confirmation that the issue was resolved. The IRS sent me a revised notice showing I only owed taxes on the earnings portion, not on my contributions. Be patient - it can take time, but they do eventually process these corrections.

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