This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Yikes! I Sent My Tax Return to the Wrong Address

I used TurboTax to prepare and file my tax return using the 1040PC form. The printed instruction told me to put the return and Form W-2 in one envelope; the voucher and check in another envelope. The only address supplied was the Austin, Texas center.

I did exactly as instructed, then two days after the deadline I found out through someone else's IRS publication that returns without taxes due should go to Austin, while those with tax payments should go to Missouri! What should I do?

-- Liem Nguyen


According to the instructions for Form 1040 , the Internal Revenue Service center in Austin serves four states: Texas, Kansas, New Mexico and Oklahoma. I assume you live in one of them.

Since you apparently printed your tax return and mailed it, your return and your payment went to the right place, the Austin service center.

Had you electronically filed your tax return, things would have been different. In that case, according to the instructions for Form 1040-V -- Payment Voucher, you would have been required to send your check to the St. Louis, Mo., service center. But Form 8453-OL -- U.S. Individual Income Tax Declaration for On-Line Services Electronic Filing, the signature form required with e-filing, would have gone to a second address in Austin. Again, the details are in the instructions for that form.

Only slightly confusing, right?

But what if you had sent your return or check to the wrong address? "It's not a problem," says IRS spokesman Don Roberts. Mailing returns and payments to the correct address helps the IRS sort everything out, says Roberts. If they go the wrong address, it slows things down, but there's no penalty to the taxpayer. It will be forwarded to the right address.

Some IRS service centers process only payments -- not tax returns. So sending your payment to that proper address expedites the processing of your check. Yes, there is a rationale for these different addresses.

The IRS process returns and payments in a specific order, so having them sorted at different locations helps cut down the confusion for the IRS (though not necessarily the taxpayer).

First, the IRS processes your payments and cashes your checks ASAP. The returns that accompany the checks are set aside for later. Tax returns requiring a refund get attention next. The Service has 45 days from the April 17 deadline (or from the day it receives your return, if you filed late) to process your return. If not, it owes you interest on your refund. "But we make one heck of an effort to get them done," says Roberts. So don't bank on an IRS interest payment.

When all the returns requiring a refund are done -- probably around the end of May -- the payment-due tax returns will be processed.

HOLDRs and the Wash Sale Rule

In the recent downturn, I sold several stocks. In every case, there were some shares that were sold at a loss. Can I get back into those stocks using HOLDRs before 60 days without losing the losses? Or is the answer "nice try"?

-- Bob Zeek


Nice try. The short answer is: The wash sale rule does indeed apply.

Merrill Lynch's HOLDRs offer ownership in a basket of 20 stocks through a single investment. A perk to these securities is that you have the option to redeem them (in 100-share lots) and get shares of the underlying stocks in return. (See a recent Dear Dagen for more details on HOLDRs.)

Since that gives you direct ownership of the stocks, the wash sale rule applies. Even if you don't redeem the HOLDRs, technically you still own them, says Erik Hendrickson, a Merrill Lynch spokesman.

Remember the wash sale rule says that if you sell a security at a loss, you can't deduct the loss on your tax return as long as you acquire a "substantially identical" security 30 days before or after the sale. Read our mega-piece for further details on the wash sale.

Let's say you sold 100 shares of Genentech (DNA), the biotech company that uses human genetic information to develop pharmaceuticals, at a loss. (FYI: If you bought the stock on March 1, your position is down 48.4% as of April 27.)

Instead, you decided to buy 100 shares of Biotech HOLDRs (BBH) (which, by the way, are also down 44.1% over the same period). In this instance, you'd have a partial wash sale.

Here's why. There are 22 shares of Genentech in each round lot of the Biotech HOLDRs. (Check out this section of the American Stock Exchange's Web site for more details.) So the loss on 22 of the Genentech shares you sold would be disallowed.

Keep in mind that the disallowed loss can be added to the cost basis of the repurchased security. In other words, you can add the disallowed loss on your Genentech shares to the cost basis of your Biotech HOLDRs.

But if you redeem the shares of the HOLDRs, you must attach that loss to the HOLDRs' Genentech shares only -- you can't apportion it among all the stocks in the HOLDRs, says Jim Calvin, an investment management tax partner at Deloitte & Touche in Boston and editor-in-chief of the Journal of Taxation of Investments.

See this previous Tax Forum to help you figure out your basis in the HOLDRs after redemption.

Any more tax questions? Send them to , and please include your full name. Tax Forum appears on Tuesdays, Thursdays and Saturdays.
TSC Tax Forum aims to provide general tax information. It cannot and does not attempt to provide individual tax advice. All readers are urged to consult with an accountant as needed about their individual circumstances.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.19 0.00%
FB $118.06 0.00%
GOOG $695.70 0.00%
TSLA $222.56 0.00%
YHOO $36.00 0.00%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs