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Subject Author Date
IRS problems annoyed52 09-23-2008
---> Re: IRS problems Paul Thomas, CP...09-23-2008
Posted by annoyed52 on September 23, 2008, 4:31 pm
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I have been trying to sort out an IRS problem for my 19 year old
daughter. She earned a little over $5k in 2007. She initially filed a
1040 (she had some stock sales) with her not claiming herself as a
deduction. This gave her a tax liability of $11 (because of the stock
sales) and a rebate of around $130. When we did our tax return we
realized she was eligible to claim herself as a deduction as she paid
more than half her own expenses when we take into account the stock
sales. So she filed a 1040x which should have given her another $11
refund (and we hoped the $300 stimulus payment though I have read
since then that corrected returns don't get it).

The original $130 refund from the 1040 was paid direct into her bank
account. Then she got a check in the mail. Was expecting $11 so was
very surprised to find a check for @ $2700! The attached explanation
notice showed income figures that bare no relationship whatsoever to
her income or anything that was on her returns. Tried sorting it out
over the phone which was a waste of time. So wrote to the IRS in June
explaining the problem and including copies of the tax returns, the
IRS notices and the IRS check and asking what to do. Did not cash the
check and told them that.

Late August got a notice saying she owes the IRS @ $2750 in taxes plus
interest for late payment of taxes. Wrote back registered mail
explaining the situation again and that she never owed $2700+ in taxes
let alone paid them late and including the check, copies of all
previous letters and IRS notices and tax returns.

Yesterday received a notice saying she owes nearly $2800 including
more interest.

I called the Tax advocate office and they said it can take 45 days for
the IRS to process the check (well cancel it presumably as it is their
check) but when it is processed all the interest charges should go
away. She said to give it 30 days (or if another notice comes) then
fax all the info to the advocate plus a POA so they can talk to me
instead of my daughter (poor kid is scared to death with these
threatening notices and demands for thousands of dollars).

Is that the right way to handle this? I am so frustrated right now.
She was doing the right thing by not cashing the check so to find her
being told she owes thousands of dollars because of an error that
completely originated with the IRS is infuriating. The fact that they
completely ignore all our correspondence leaves us feeling very
helpless. I have a pretty good understanding of figures and taxes and
I am finding this incredibly stressful as whatever we do we get no
response. I can't help thinking how even more appalling this situation
would be for people who do not understand what is going on and for
young people (like my daughter who will never have any faith in the
IRS after this) or older people. Plus we have already spent more than
the $11 she was actually due in copying documents and mailing them to
the IRS.

Anyway - venting aside - is there anything else I should be doing? Is
it ok to wait another 30 days as the advocate said? I am worried with
all these penalties and interest being added.

--
<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>

Posted by Paul Thomas, CPA on September 23, 2008, 4:55 pm
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<<Snip story

> I called the Tax advocate office and they said it can take 45 days for
> the IRS to process the check (well cancel it presumably as it is their
> check) but when it is processed all the interest charges should go
> away. She said to give it 30 days (or if another notice comes) then
> fax all the info to the advocate plus a POA so they can talk to me
> instead of my daughter (poor kid is scared to death with these
> threatening notices and demands for thousands of dollars).
>
> Is that the right way to handle this?


It's the slow way to handle this, but it should work out.



<<Another snip


> Anyway - venting aside - is there anything else I should be doing? Is
> it ok to wait another 30 days as the advocate said? I am worried with
> all these penalties and interest being added.



If in the end they fix the problem and show there is no tax due, then there
would be no penalty or interest due either.




FYI: I have no idea where the IRS is on budget cuts like so many of the
other government agencies are doing, but I do know they are short staffed
this time of year, maybe even more so these days, so what might have been
taken care of in a week or three may take a couple of months or four.

Keep good records of who you talked to and about what, along with your
correspondence. It takes time, so give it time.

Also, if by say the end of October this isn't resolved, if there is a walk
in IRS office close to you, take the batch of papers up there and see if you
can get a sit-down with a face who can help resolve this.

Go ahead and file the 2848 today though. Keep a copy and or make a second
with original signatures to take in with you or fax at some later date and
time.




--
Paul A. Thomas, CPA
Watkinsville, Georgia

--
<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>

Posted by annoyed52 on September 23, 2008, 7:10 pm
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wrote:
>
> <<Snip story
>
> > I called the Tax advocate office and they said it can take 45 days for
> > the IRS to process the check (well cancel it presumably as it is their
> > check) but when it is processed all the interest charges should go
> > away. She said to give it 30 days (or if another notice comes) then
> > fax all the info to the advocate plus a POA so they can talk to me
> > instead of my daughter (poor kid is scared to death with these
> > threatening notices and demands for thousands of dollars).
>
> > Is that the right way to handle this?
>
> It's the slow way to handle this, but it should work out.
>
> <<Another snip
>
> > Anyway - venting aside - is there anything else I should be doing? Is
> > it ok to wait another 30 days as the advocate said? I am worried with
> > all these penalties and interest being added.
>
> If in the end they fix the problem and show there is no tax due, then there
> would be no penalty or interest due either.
>
> FYI:  I have no idea where the IRS is on budget cuts like so many of the
> other government agencies are doing, but I do know they are short staffed
> this time of year, maybe even more so these days, so what might have been
> taken care of in a week or three may take a couple of months or four.
>
> Keep good records of who you talked to and about what, along with your
> correspondence.  It takes time, so give it time.
>
> Also, if by say the end of October this isn't resolved, if there is a walk
> in IRS office close to you, take the batch of papers up there and see if you
> can get a sit-down with a face who can help resolve this.
>
> Go ahead and file the 2848 today though.  Keep a copy and or make a second
> with original signatures to take in with you or fax at some later date and
> time.
>
> --
> Paul A. Thomas, CPA
> Watkinsville, Georgia

Paul Thomas - Thank you for your advice. I have the 2848 downloaded
ready to go along with the 911 for the tax advocate. Just wanted to
check that it is the correct form or a family member to be the
representative. There is a part that I have to sign that says" I am
aware of regulations contained in Circular 230 (31 CFR, Part 10), as
amended, concerning the practice of attorneys, certified public
accountants, enrolled agents, enrolled actuaries, and others;" which
threw me a bit as I am not any of those things just a family member so
maybe 'other' applies. So I wanted to make sure that 2848 is correct
as opposed to 8821. I know now to make sure in future the kids check
the box authorizing me to be allowed to discuss their taxes. I have
kept copies of all correspondence but foolishly did not note who i
talked to on the phone. Will do so from now on.

--
<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>

Posted by Taxmanhog on September 23, 2008, 5:06 pm
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>I have been trying to sort out an IRS problem for my 19 year old
> daughter. ............
> Anyway - venting aside - is there anything else I should be doing? Is
> it ok to wait another 30 days as the advocate said? I am worried with
> all these penalties and interest being added.

You have done as much as can be expected, in time the returned refund will
be reposted to the account, and will automatically reverse all the assessed
& accrued Penalties & Interest.

Request a transcript of the tax period after about 60 days to verify the
adjustments have been completed.

--
<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>

Posted by annoyed52 on September 23, 2008, 7:15 pm
Please log in for more thread options


>
>
> >I have been trying to sort out an IRS problem for my 19 year old
> > daughter. ............
> > Anyway - venting aside - is there anything else I should be doing? Is
> > it ok to wait another 30 days as the advocate said? I am worried with
> > all these penalties and interest being added.
>
> You have done as much as can be expected, in time the returned refund will
> be reposted to the account, and will automatically reverse all the assessed
> & accrued Penalties & Interest.
>
> Request a transcript of the tax period after about 60 days to verify the
> adjustments have been completed.

Taxmanhog - thank you. How do I request a transcript of the tax
period? Is it something we can do online or do we need to write to the
IRS office we have been dealing with. I assume that is something that
will show that she is up to date and all taxes paid for 2007.

--
<< ------------------------------------------------------- >>
<< 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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