I got a CP2000 from the IRS for 2016. It concerns three retirement account transactions.
- A direct rollover from an existing IRA to a Solo 401K (a qualified plan; 1099-R Code G in box 7)
- In 2016, I started to do a backdoor Roth and realized that I could not, so I had the funds returned. These also triggered a 1099-R, and I think the code was "81" or "82" (I don't have it in front of me).
- As #2, but for my wife.
It's not clear to me why the IRS thinks these would be taxable events. For #1, the code in Box 7 seems to answer any question they would have about the transaction. How do I further "prove" that this was a roll into a qualified plan?
For #2 and #3, I contributed post-tax dollars and had them returned. If the contributions and returned funds were pre-tax dollars, wouldn't I have had to claim a deduction for that contribution? Even if I had completed the backdoor Roth, it would have been with post-tax funds.
What will the IRS see as sufficient evidence as a response to incorrectly calling these distributions taxable?