I just got a notice of a mismatch between IRS records and my 2005 returns, telling me that I now owe the fed several thousand dollars. I guess it’s called “an audit” and it fucking sucks (the phrase “audit” doesn’t appear, rather they call it “an examination”).
Words cannot express my current state of frustration.
Update: Thank god for keeping copious paper records. I visited my document archive in the attic and found the trade confirmation for a block of securities being sold to move cash from UBS to Fidelity back in August of 2005. This was handled by our agent at Fidelity, and was never reported by UBS on my 1099-B (yeah, went back and checked that too, thanks). Grand of them to refile with the IRS at some later date (that or the IRS is so incompetent it took them 1.5 years to figure out the discrepancy) and not send me the updated version.
The upside is that the cost basis is almost 99.7% of the sale, versus what the IRS based their calculation on ($0).
The take home: Keep copious paper records. Someday they just might save you $3,285 plus interest.