How far back to amend erroneous 8606 forms

Submitted by Paul Congdon on Fri, 2023-01-06 04:33

I opened a traditional IRA in 2009 and have never taken a distribution, but noticed on my old tax returns that form 8606, which was filed every year, was incorrect. The first incorrect 8606 form was filed in 2010 and has never listed the correct basis since. I would like to correct this, but was wondering how many previous 8606 forms I need to amend? I’ve read something about the last 3 years being sufficient. Ideally, if I could only amend last year, that would be preferred – there are no current tax consequences since I have never taken a distribution, but plan to in the coming years and don’t want to be double taxed.



Submitted by Alan - IRA critic on Fri, 2023-01-06 15:30

Since it has become evident that the IRS ignores retroactively filed 8606 forms, if you made a ND 2022 contribution, you could update your line 2 of the 2022 8606 to reflect the correct accumulated basis as of the end of 2021, and include an explanatory statement with your 2022 return. If no 2022 contribution, then amend your 2021 1040 and Form 8606 as indicated with explanation. 

Submitted by Carmen Sanchez on Mon, 2024-01-29 18:59

This year I realized that the cost basis in form 8606 is incorrect. I had file form 8606 since 2003 but lost the earlier 7 years of them. During a several years I used an accountant and completely mess up the cost basis reporting the value of the IRA account at the end the year instead of the accumulated non-deductible contributions.  Afterwards I used TurboTax, but the software did not ask the question and did not carry over the following contributions.  I made the mistake of not educated myself in this subject.My questions are:1) Do I have to send the correct 8606 form for every year since 2003 or just need to correct form for the last 3 years?2) If I need to reconstruct the cost basis, can I request the IRS for the return transcripts of those early years (2003 to 2009)?Thanks

Submitted by Alan - IRA critic on Mon, 2024-01-29 19:13

The IRS apparently does not process very old 8606 revisions, so there is no sense trying to file such forms. You should still try to determine what your correct current cost basis is and enter it on line 2 of the next 8606 you would otherwise have to file. The IRS will probably accept that figure if it is reasonable, but no guarantee.

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