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Posted by removeps-groups@yahoo.com on April 18, 2008, 8:23 pm
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> Today we got the check back via FedEx from Alliance Bernstein, with a
> note saying that the mailing was postmarked April 16. This will cost
> us an additional $850 in taxes.
Is that $850 for federal tax on the $5000? If you file an amended
return as early as possible, interest on money you owe will be as
small as possible. It's strange that they looked at the postmark on
the envelope.
> We called the bank consultant and got an apology.
>
> What can we do?
Maybe you can sue. But at least you have an early start for tax year
2008 :).
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Posted by Dick Adams on April 19, 2008, 9:10 am
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> My wife went to a local bank on April 15 and opened a $5,000
> traditional IRA, paid with a check dated April 15, was re-assured by
> the consultant that everything would be mailed to the financial
> institution (Alliance Bernstein) in time to claim a deduction for
> 2007.
>
> Today we got the check back via FedEx from Alliance Bernstein, with a
> note saying that the mailing was postmarked April 16. This will cost
> us an additional $850 in taxes.
>
> We called the bank consultant and got an apology.
>
> What can we do?
My take is that the consultant is an agent for Alliance Berstein
and so when you wrote the check you effectively mailed it and it
is good.
That argument is going to get you no where unless one of you
shows up at the bank and gets the contribution remailed with
a letter of explanation from a officer of the bank.
Even then it may not fly. But it is worth the effort.
Dick
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<< ------------------------------------------------------- >>
<< 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 (2007) - All rights reserved. >>
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Posted by Bob G on April 19, 2008, 11:35 am
Please log in for more thread options Thank you all for your replies.
We'll be going to the bank Monday and see what they say.
If all fails, should we file an amended return to cancel the IRA
deduction?
Or will the IRS pick it up automatically and deduct it themselves?
We won't be owing a balance, our refund will be smaller.
--
<< ------------------------------------------------------- >>
<< 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 (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Mark Bole on April 19, 2008, 12:25 pm
Please log in for more thread options Bob G wrote:
> Thank you all for your replies.
> We'll be going to the bank Monday and see what they say.
> If all fails, should we file an amended return to cancel the IRA
> deduction?
Yes, but wait until your original return is processed (timing depends on
whether you e-filed or not).
> Or will the IRS pick it up automatically and deduct it themselves?
> We won't be owing a balance, our refund will be smaller.
Eventually, but you will probably get the refund first, then many months
later a letter stating you owe some of it back plus interest.
-Mark Bole
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<< ------------------------------------------------------- >>
<< 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 (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Elle on April 19, 2008, 3:13 pm
Please log in for more thread options > We'll be going to the bank Monday and see what they say.
Something that might make this moot: How much were you
planning to put in for tax year 2008? You say you were
trying to contribute $5k for you and your wife for 2007.
It's possible you and your wife are eligible to contribute
$10k for 2008. See
http://beginnersinvest.about.com/cs/iras/a/iracontribution.htm
for starters.
If you have not already, I recommend getting documentation
of the bank consultant's apology. Record him on the phone;
get an email from him; whatever it takes. It is an admission
of wrongdoing. Not that it would help legally (though it
might). More that it could help in general when you plead
your case to the consultant's boss.
>From my reading, I think Dick Adams proposal may be dead on.
Consider the words at
http://www.investopedia.com/articles/retirement/05/021505.asp:
"Similar to your tax return, a postmark date is considered
timely; therefore, if you send your contribution in the mail
by April 15, you will have met the deadline, even if your
financial institution receives the contribution after April
15."
Granted this is not the IRS talking, but I suspect it is
based on IRS verbage or cases. If a postmark is considered
timely, then it seems to me the evidence you have (witnesses
saw you at the bank; the consultant says he received the
check on Apr. 15; etc.) would also support an argument of
timeliness.
I keep in mind that the government /wants/ people to save in
their IRAs. It's not like there is a government policy of
wanting to nail IRA contributors with obvious (and
documented) good intentions.
> If all fails, should we file an amended return to cancel
> the IRA
> deduction?
Only if, as you say, all fails. I'd keep probing for the
best answer. I am not sure we're there yet.
I imagine asking Alliance Bernstein to backdate when it was
the local bank's fault is a stretch. But I wonder if it is
legal for the local bank to which you originally went holds
IRAs and it might backdate a deposit into one for you.
Probably not, but do get this answered.
> Or will the IRS pick it up automatically and deduct it
> themselves?
http://www.themoneyblogs.com/dontmesswithtaxes/my.blog/ira-filing-deadline-reminder---.html
for one indicates they will eventually pick up on it.
--
<< ------------------------------------------------------- >>
<< 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 (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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