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Posted by TxSrv on March 1, 2007, 6:47 am
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Harlan Lunsford wrote:
> Yes, I think you have a very good case for getting them to
> waive this first time failure to include the AMT. After
> all, they are human.
Harlan, the proposed penalty is 6651, late-filing. The
facts hint at a refund return with -0- tax, filed late. AMT
as the only tax thus triggers a 10% (two-month) late
penalty. Orig poster needs to consider if this is the case,
and any reasonable cause for originally filing late.
Nothing to do with AMT.
Fred F.
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
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<< Copyright (2006) - All rights reserved. >>
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Posted by Mark Bole on March 1, 2007, 6:47 am
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citizen_average@yahoo.com wrote:
> I have been filing Federal and California taxes for the last
> 18 years. For for the first time ever, I have received the
> honor of being audited :) I received the letter 2194 (SC),
> form 4549, etc. for tax years 2005.
[...]
> Per IRS, I am subject to AMT just based on high California
> state taxes, and property taxes. No ISO, no option income of
> any kind, no "funny" income, no other deductions, no tax
> shelters. Absolutely nothing else.
Aren't you glad at least that the AMT standard deduction
amounts were extended for one year into 2006 at the
temporary higher rates?
Your AMT was not specifically based on high CA state taxes
(actually, the property taxes in CA for long-time owners are
pretty darn low compared to some other populous states,
thanx to Prop 13). There are AMT deferral items (such as
ISO's and the other "funny" ones you mention) and AMT
exclusion items (such as your state taxes and
personal/dependent exemptions), you got hit with a lot of
exclusion items.
Since the rest of your post addresses penalties, interest,
and IRS administrivia, I'll only comment to say, I'm
beginning to see the wisdom in paying for a professional to
review AMT issues if one even thinks they will be visiting
that fabled land.
As frequent contributor Paul Thomas has commented (and
perhaps others before), the AMT may well become the default
"flat tax" if not indexed to inflation.
-Mark Bole
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by citizen_average on March 1, 2007, 6:47 am
Please log in for more thread options Thanks to Taxman, TxSrv, Phoebe and Paul Thomas for detailed
answers to all my questions. Your answers have confirmed my
conjecture.
-- nothing doing about the interest; rates and compounding
mandated by Congress.
-- penalty abatement possible; does not hurt much to
request it in a short, simple letter.
-- do the AMT for 2006, even with boring tax details!
I have a two minor followup questions:
1. One of the responses seemed to imply that if I pay now,
and sign the Form 4549, it means that this tax year will be
CLOSED. Is this true? I mean I do not suspect anything else
wrong with my taxes, but knowing for sure that this year
will be closed and settled is a "good feeling" (Like I said,
never been audited before).
2. For the 2005 tax year, the tax return was due on
4/15/2006. My return was received by IRS in 6/1/2006 -- I
had filed VALID, TIMELY EXTENSION request. Note that I was
DUE A REFUND, and IRS gave me the $500 refund. Of course,
with AMT, now I owe taxes.
So, is that a timely filing of taxes or not? Is that a
failure to file taxes?
I would answer those as Yes (timely filing) and No (did not
fail to file taxes), but what do tax professionals think? I
am NOT going to argue, legalistically, that my penalty
should be waived. Just that I never did AMT, that I was told
AMT applies when one has special, ISO options (I do have
ISOs).
And, yes, even with my boring taxes of only (W-2 wage income
+ small interest + only mortgage, property taxes and state
taxes deduction), I would do the AMT for the tax year 2006.
Thank you, politicians, for the AMT :(
Perhaps California should leave US, and avoid all this :)
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by TxSrv on March 3, 2007, 4:29 am
Please log in for more thread options citizen_average@yahoo.com wrote:
> 1. One of the responses seemed to imply that if I pay now,
> and sign the Form 4549, it means that this tax year will be
> CLOSED. Is this true?
Yes, but pmt not required, only signature + like 30 days
time-lapse. However, there are exceptions permitting
reopening for serious matters, or a few other non-serious
things. If your only tax is AMT, then AMT _is_ the only
issue as a practical matter, usually. Forget about this
aspect of it, as IRS chose correspondence technique, very
likely after perusal of your entire 1040 as best they could.
> My return was received by IRS in 6/1/2006 -- I
> had filed VALID, TIMELY EXTENSION request. Note that I was
> DUE A REFUND, and IRS gave me the $500 refund. Of course,
> with AMT, now I owe taxes.
>
> So, is that a timely filing of taxes or not? Is that a
> failure to file taxes?
Obtain a transcript of your account for 2005 to see if it
shows they rec'd your Form 4868. By proposing a 10% penalty
(2 months), maybe they didn't process any 4868. Do you have
proof you filed one? Alternatively, the examiner who did
your From 4549 did not review the transcript, and a timely
extension is indeed posted there. File 4506-T with IRS, or
ask the function working you return for a transcript.
Fred F.
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by TxSrv on March 3, 2007, 4:29 am
Please log in for more thread options citizen_average@yahoo.com wrote:
> 1. One of the responses seemed to imply that if I pay now,
> and sign the Form 4549, it means that this tax year will
> be CLOSED. Is this true?
Yes, but pmt not required, only signature + like 30 days
time-lapse. However, there are exceptions permitting
reopening for serious matters, or a few other non-serious
things. If your only tax is AMT, then AMT _is_ the only
issue as a practical matter, usually. Forget about this
aspect of it, as IRS chose correspondence technique, very
likely after perusal of your entire 1040 as best they could.
> My return was received by IRS in 6/1/2006 -- I
> had filed VALID, TIMELY EXTENSION request. Note that I >
> DUE A REFUND, and IRS gave me the $500 refund. Of course,
> with AMT, now I owe taxes.
>
> So, is that a timely filing of taxes or not? Is that a
> failure to file taxes?
Obtain a transcript of your account for 2005 to see if it
shows they rec'd your Form 4868. By proposing a 10% penalty
(2 months), maybe they didn't process any 4868. Do you have
proof you filed one? Alternatively, the examiner who did
your From 4549 did not review the transcript, and a timely
extension is indeed posted there. File 4506-T with IRS, or
simply ask the function working you return for a transcript.
Fred F.
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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