What This Letter Means
Letter 4416 is the Bondholder Ownership Confirmation Follow-up. It comes from the IRS tax-exempt bond examination program, which looks for noncompliance in tax-advantaged bonds.
The IRS identified you as a possible holder of bonds involved in one of those cases. It first sent Letter 4415, asking you to confirm the amount of bonds you held and how long you held them. That request went unanswered for 30 days, so the IRS sent this follow-up.
The IRS generally does not start writing to bondholders until it has issued a final adverse determination on the bonds.
Why It Matters
The IRS uses bondholder responses to decide who it treats as a confirmed bondholder. Confirmed bondholders may then be contacted about an adjustment to income tied to the bonds.
If You Don't Respond
If there is still no response, the IRS may refer you to another IRS division for an examination. Ignoring the letter does not end the matter.
What to Do
- Pull your brokerage statements and trade confirmations for the bonds named in the letter.
- Confirm the amount you held and the dates you bought and sold them, following the instructions in the letter.
- If you never held the bonds, say so in writing.
- Keep copies of what you send and proof of mailing.
What May Come Next
If your ownership is confirmed and your return for those years is not already under exam, the IRS may send Letter 4414. That letter includes copies of the proposed or final adverse determination, information on resolution options, and requests to extend the time the IRS has to assess tax for open years. Read any extension request carefully before you sign it.
If the IRS is asking about tax-exempt bonds you held, call us at (813) 229-7100.