Amend 2003 tax return - yes or no?

[FEDUKE404]

(Sorry to repeat, as this was mentioned in a prior thread.)

Client has excess contributions to Roth IRA for calendar year 2003. Those funds were only recently removed. (NO ONE wanted to go the non-deductible traditional IRA route.)

Does a Form 1040X for calendar year 2003 need to be filed (CAN it be filed?), or just pick up the 2003 funds on line 18 of the 2004 Form 5329 and go forward?

The "normal" three-year statute of limitations may not apply here (see IRC Section 6501) as the 6% tax on excess Roth IRA contributions is technically an excise tax, which means instead of three years there could be a six-year statute of limitation for this type of change.

Just wondered if anyone has dealt with this specific issue before, or can find/interpret the code issues.

Thanks!

FE

[erchess]

I can't cite code

but I thought that the statute of limitations re amending a return applied only when the taxpayer wants to claim a refund or when the IRS wants to examine a return but for some reason cannot bring itself to say the word "fraud". I would therefore have said that you need to in some official way correct the IRS' impression of what is in the ROTH IRA and that the best way to do that was to amend the return.

Firms I have been with have also filed "late amended returns" in response to IRS challenges of the original returns. In essence we would say (for example) yes I know that we left off this W-2 but we also left off something else that more than offsets the effect of the change the Service made. It was always the practice to attach to these the documentation behind the new deductions. The preparer would get a red pen and print across the top of page one and in the comment section "Filed late. No Refund Due. Filed for Information Only." whenever we filed a late return that might have been taken as a request for a refund which it was too late to make.