Reviewed and updated October 16, 2026
Rules and decisions to review
- Reconcile income across businesses, brokerages, partnerships and trusts, including corrected forms and late statements.
- Track basis in investments and pass-through entities. A cash distribution and taxable income are not always the same amount.
- Document valuations and the business purpose of transactions that affect deductions, losses or transfers.
- Retain filed returns and supporting schedules in a way that makes a requested tax year easy to retrieve. If a notice arrives, respond to its actual scope and deadline.
A practical example
An investor receiving partnership cash may also receive a Schedule K-1 reporting a different taxable amount. Records of basis and prior-year activity help explain the result rather than treating deposits as the only tax measure.
Records to gather
Gather K-1s, brokerage statements, basis schedules, valuation reports, entity returns and transaction agreements.
Your next step
Reconcile complex income and basis schedules before filing. For a notice, use the stated tax year and requested issues to assemble a focused response rather than relying on broad claims about enforcement priorities.
Official sources
This guide provides general information. The rules depend on the tax year, jurisdiction and your circumstances. Ask our team which filing or planning steps apply to you.
