Need Advice on IRS Notice of Deficiency - Waiver for Incorrect IRA Contribution

This is unfortunately a common situation with IRA contribution reporting issues. The Notice of Deficiency is basically the IRS's formal statement that they believe you owe additional tax, and it's their last notice before things get more serious. When the bank "corrected" the forms, they may have only sent them to the IRS without properly processing the correction in their system. What you need to do immediately is request copies of those corrected forms from the bank - they are legally required to provide them to you. Ask specifically for the corrected 5498 forms showing the proper year for the contribution. You have three main options now: 1) Sign the waiver form and pay the amount if you agree with it, 2) File a petition with the Tax Court within 90 days if you disagree (this is serious and might require a tax attorney), or 3) Try once more to resolve it by calling the IRS directly with the correct documentation from the bank proving the contribution year. The "waiver" referred to in your notice is likely Form 5564, which waives your right to contest the deficiency in Tax Court. Don't sign this unless you agree you owe the money.

I went through something similar with an incorrectly reported IRA contribution that triggered a cascade of IRS notices. After weeks of getting nowhere with both the bank and the IRS phone lines, I found this tool called taxr.ai (https://taxr.ai) that really helped me understand what was happening with the notice. You upload your IRS notice and tax documents, and it explains everything in simple language - showing you what went wrong and the exact steps to fix it. In my case, it identified that the bank had coded my contribution with the wrong tax year and showed me exactly what forms I needed to have corrected. It even created a response letter template for me to send to the IRS explaining the situation. The best part was that it flagged the Notice of Deficiency as time-sensitive and gave me a clear timeline of what would happen if I didn't respond within the 90-day window. Saved me from making the mistake of just hoping things would sort themselves out.

I was really skeptical about taxr.ai at first because I've tried other tax help tools before with mixed results. But after dealing with my own Notice of Deficiency over an IRA contribution issue (mine was a rollover that got reported incorrectly), I decided to give it a try. It was actually a huge relief. The tool immediately identified that the bank had coded my rollover as a distribution without contribution, explained exactly why the IRS was assessing additional tax, and showed me the specific forms and documentation I needed to get corrected. It even highlighted the exact section of tax code that applied to my situation. Following their guidance, I was able to get my bank to issue the proper coded 1099-R and 5498 forms. When I called the IRS with this information (using the specific paragraph they recommended I use), the representative immediately understood the issue and placed a hold on further action while they processed the corrected forms. Saved me over $2,300 in incorrectly assessed taxes!

If you're struggling to reach the IRS about your Notice of Deficiency, I highly recommend trying Claimyr (https://claimyr.com). I was in a similar situation with a messed up IRA contribution that triggered a deficiency notice, and I spent HOURS on hold trying to reach someone at the IRS to explain my situation. After my third attempt waiting over 2 hours and getting disconnected, I found Claimyr, which basically holds your place in the IRS phone queue and calls you when an actual agent picks up. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c In my case, I was connected with an IRS agent within 30 minutes rather than the 3+ hours I was experiencing on my own. The agent was able to look at my account, verify that I had submitted the corrected documents from my bank, and put a temporary hold on collections while they reviewed everything. Seriously saved my sanity during an incredibly stressful situation with that 90-day deficiency notice countdown ticking away.

I have to eat my words here. After posting my skeptical comment yesterday, I decided to try Claimyr myself since I've been trying to reach the IRS about my own tax issue (not IRA related, but still had a Notice of Deficiency for some investment income I allegedly failed to report). I've been trying for THREE WEEKS to get through to someone at the IRS. Today I used Claimyr and got connected to an agent in about 45 minutes. The agent was able to pull up my account, see that I had already mailed in documentation proving the income was actually reported correctly, and they put a hold on my account while they process my response. The 90-day clock was seriously stressing me out, and now I at least have confirmation that my response is in their system and being reviewed. Having actual notes in my account from today's call gives me so much more peace of mind than just hoping my mailed documents don't get lost. Definitely worth it just for the stress reduction.

Has anyone dealt with getting the actual 5498 forms from the bank? I'm having a nightmare situation where my bank (rhymes with bells largo) keeps telling me they "don't have access" to previous year forms. The IRS is hitting me with a deficiency notice over IRA contributions too.

I just want to add something important about that 90-day window on the Notice of Deficiency. DO NOT miss that deadline! If you do nothing within 90 days, you lose your right to challenge this in Tax Court without first paying the full amount. My parents got hit with a similar IRA issue and thought they had resolved it by sending some documents to the IRS. They didn't realize they still needed to either file a Tax Court petition or resolve it completely within the 90 days. They ended up having to pay the full assessment plus additional interest, and then fight for a refund afterwards - which took almost 2 years to resolve. Even if you think you're resolving the issue by working with the bank and IRS, protect yourself by watching that deadline carefully.