My wife (as of '06) omitted a major portion of her salary for 2005 taxes, because it was received as a stipend as a fellow on an NIH training grant. Her university was not allowed to take out taxes, and up until April 2005 it was debateable whether NIH-NRSA postdoctoral trainees are subject to FICA and medicaire withholding (the IRS now says it is). So we just got a letter now telling us she is liable for taxes on an extra $45000 salary (apparently they haven't gotten to our 2006 taxes yet, since it will be the same for that year).
Apparently some of her co-fellows claimed (to tax authorities, on the advice of their employer) to receive the stipend as a loan, which they pay back with health-related service in the years after the loan.
We have until May 16 to get back to the IRS, and we are not sure what to do. She did not knowingly do anything wrong, and H&R Block did nothing to help us, even though they signed off on it... If we have to, we'll pay, but it's a lot of money...
2007-04-25
07:50:13
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3 answers
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Anonymous