What This Letter Means
Letter 2194 is an Alternative Minimum Tax proposal from an IRS correspondence examination. The IRS sends it when your individual return looks like it owes the AMT but you didn't complete or attach Form 6251, Alternative Minimum Tax - Individuals.
These cases usually start in return processing. The IRS sends Letter 12C asking about the missing form. If that letter isn't answered in time, the return goes to examination, and Letter 2194 is the first exam contact.
The letter comes with Form 4549, Examination Report. The report shows the proposed AMT, including a Form 6251 computation the IRS prepared. That computation is built from what's on your return, and the IRS may use the largest amounts it can determine. Your actual AMT may be lower.
What to Do
- If you agree, sign the exam report and send it back. The IRS assesses the tax and closes the case.
- If you disagree, send your own figures within 30 days. You can send the specific tax preference and adjustment items, or a completed Form 6251.
- If you claim larger amounts than you reported on your original return, explain why. Some items are limited, and the examiner will check.
The examiner compares your numbers to your return. If your figures are accepted, you get a revised report. If you don't owe AMT after all, the case closes with no change.
If You Don't Respond
After the response period runs out, the IRS issues a notice of deficiency (Letter 3219). That notice gives you the right to petition the Tax Court, with a strict deadline. If that notice also goes unanswered, the IRS assesses the tax and bills you.
Deadlines
Respond within 30 days of the date on Letter 2194. AMT is technical. Have the Form 6251 computation checked before you sign anything.
If you received Letter 2194 and want the AMT computation reviewed, call us at (813) 229-7100.