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IRS audit help -1099-SA differences?

Asked by: emeka22uche 2172 views YA Discussion

Hello – Received a notice from the IRS that a financial institution reported to them that I received a distribution from an HSA to the amount of $ 5,549. However, the 1099-SA form that I received from that institution indicates a distribution of $ 1,249. In short, the IRS is telling me that due to the difference, I own them over 2K in back taxes.

Was wondering if anyone had experience with such matters and might know the best course of action I should take, and how there could be such a large difference between my 1099-SA and what the IRS has?

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2 Answers



  1. chatsplas on Mar 17, 2012 Reply

    1099 SSA is a report from social security administration about SS benefits paid
    That income is reported on tax return and may be partially taxable
    Distribution from HSA is NOT taxable when used for permitted medical expenses, ONLY when used for other expenses

    http://www.irs.gov/pub/irs-pdf/f8889.pdf

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  2. Quick Answers on Mar 17, 2012 Reply

    The othe poster doesn’t know the difference between an 1099-SA and an SSA-1099? Sheesh.

    As for you, this isn’t an full blown audit, this is a CP2000.

    Step one, use form 4506-T to request a copy of your wage and income transcript as this is the source of the figures the IRS is using for comparison. If the IRS copy or copies of the 1099-SA are incorrect, contact the HSA administrator and ask how come there is a discrepancy.

    Step two, go back to your HSA and get the 1099-SA and 5498-SA for each year you’ve had the HSA. Since the amount that is off is $ 4300 (a round number), I’m wondering if you properly reported your contributions. Many people fail to do that correctly and excess contributions can add up quickly too.

    Step three, review your 8889s that you filed each year.

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