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IRS Sending Letters Related to Qualified Opportunity Funds (IR 2020-274)

IRS Sending Letters to Taxpayers About Qualified Opportunity Funds

The IRS has started sending letters to taxpayers “who may need to take additional actions” related to Qualified Opportunity Funds (QOFs). Taxpayers who attached or indicated they attached a Form 8996 (Qualified Opportunity Fund) to their return may receive Letter 6250. This letter lets them know that if they intended to self-certify as a QOF, they may need to take additional action to meet the annual “self-certification requirement.” Additionally, taxpayers may receive Letter 6251 notifying them that they “may not have properly followed the instructions” for Form 8949 (Sales and Other Dispositions of Capital Assets) or do not appear to have an “eligible gain” that would enable them to make a valid deferral election for gains invested in a QOF. These taxpayers should file an amended return or an Administrative Adjustment. Request (AAR). (Code §1400-Z; QOFs).

Authored by:

Dr. John Connors, JD, CPA, LLM

Tax Educator’s Network, Inc.

[email protected]

 

For subscription information on Dr. John Connors’ educational materials, click here.

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