Multiple 8606"s

Client received a letter from IRS asking for additional transactions to be reported on 8606. Backstory is that he does regular back-door Roth. His wife also does back door ROTH conversion but has a Traditional IRA balance so we must pay tax on a ratable portion of the IRA balance as he converts each year.

My question is can the spouse have more than one 8606? One for the normal $5,500 back door and the other one reflecting taxable portion of the Tradional IRA.

Yes, the taxpayer has an 8606 and the spouse has an 8606. However, there can only be one Form 8606 for each person.

Thanks but the IRS letter is asking for another 8606 bc only one 8606 was issued...weird I thought!

Yes, the taxpayer has an 8606 and the spouse has an 8606. However, there can only be one Form 8606 for each person.

Except technically, and not the OP situation, an inherited IRA might have its own pro forma 8606, so one person might have two, one for their own IRA, and one for an inherited IRA.

Thanks but the IRS letter is asking for another 8606 bc only one 8606 was issued...weird I thought!

Do you mean they are asking for an amended Form 8606? That would make sense.

The letter says One 8606 shows the $5,500 with zero taxable income and another 8606 shows the secondary taxpayer has zero taxable income for another $5,500. Then verbatim it says, "This leaves the 3rd distribution of $5,111 reported under the secondary taxpayers SSN unaccounted for in the Form 8606 since you only filed two Forms 8606. Please submit another Form 8606 to calculate the taxable amount for distribution of $5,111."

The letter says One 8606 shows the $5,500 with zero taxable income and another 8606 shows the secondary taxpayer has zero taxable income for another $5,500. Then verbatim it says, "This leaves the 3rd distribution of $5,111 reported under the secondary taxpayers SSN unaccounted for in the Form 8606 since you only filed two Forms 8606. Please submit another Form 8606 to calculate the taxable amount for distribution of $5,111."

The IRS computers seem to have real problems handling 8606s for backdoor Roths -- I see problems with CP2000s on other boards I read. What is confusing me here is: if the spouse has an IRA balance, why is the conversion marked as nontaxable?

If the spouse does a backdoor for 5,500 and additionally converts 5,111, you would do one 8606 for the entire 10,611 and find the taxability based on the basis rules.

Except technically, and not the OP situation, an inherited IRA might have its own pro forma 8606, so one person might have two, one for their own IRA, and one for an inherited IRA.

Yes, that would be an exception not relevant to the OP. I do appreciate the technical correction in case someone were to later find this thread while doing research and misread my intent. Cheers!

Thanks donut. This reminds me I need to go get a cup of coffee and a donut myself right now!