Ok, so I am now being audited by the IRS due to a mistake that an investment company made when I cashed in on my 401K a couple years ago, For tax year 2005 I never received a 1099 for the disbursement, and when we called, they had the wrong address still listed. After multiple times we finally got the check, but no 1099. On the stub of the check it had the total amount, and texes, etc., so it allowed us to file our taxes.
Well, now it comes to find out that we claimed over 4k in taxes on the federal side, but it appears as if it was split between Federal and Massachusetts. Now they say we owe the IRS about 3k. I believe this amount may have gone to Massachusetts, even though we do not live there anymore, nor had we for the entire year. Florida does not have state taxes so we should not owe this amount.
Any ideas on what we can do to rectify this? Is it even possible to get the money back that was paid incorrectly to Mass?
2007-04-23 08:11:58 · 4 answers · asked by camcrazy08 1 in Business & Finance ➔ Taxes ➔ United States
Contact the investment company and demand a copy of the 1099 showing the actual taxes withheld. Then file amended returns as appropriate based upon the actual amounts withheld. You may have a case to avoid the penalties from the IRS, it won't hurt to ask, but there's no way around the interest.
If you had demanded the 1099 in a timely manner you would have filed proper tax returns and would not be in this situation. At the very least you should have pursued this last year and amended your returns as soon as the error was discovered. Letting that go and "assuming" how the withholdings were handled has lead you to your current dilemma.
2007-04-23 08:22:26 · answer #1 · answered by Bostonian In MO 7 · 1⤊ 0⤋
Who says that it's not income? Maybe you don't, but the LAW damned sure does and that's ALL that matters. Where in the tax code do you find reference to the term "liquid assets?" And where do you find an exemption from taxation for lottery winnings? The "government" is not messed up, but your understanding of the law most certainly is. If you try to raise this issue as a defense against charges of tax evasion, you will be hit with a $25,000 penalty for raising a frivolous defense. The IRS can also slap you with a $5,000 administrative penalty for trying to claim that the lottery winnings are not taxable income. They only way to have that penalty removed is to sue in Tax Court, and the TC virtually always will side with the IRS on the matter, given the extensive case law on the IRS' side. The odds that Congress would exclude lottery winnings from taxation is exactly 0%. Contrary to a few clueless responses, lottery winnings are not capital gains. A capital gain is when you purchase something and sell it later for more than you purchased it for. Common examples of capital gains would be stocks or your home. The gain on the sale of stocks is taxable under the capital gains rules. While a portion of the gain on the sale of your personal residence *may* be exempted from capital gains taxes, if you don't qualify or if the gain is above a certain level, capital gains taxes will be due.
2016-04-01 03:47:48 · answer #2 · answered by ? 4 · 0⤊ 0⤋
You can determine whether a tax refund request can be filed at this late date in MA. Some of the taxes may have been FICA, and medicare would have been paid if this qualified as earned income, which it would have as a company stock option, for example.
You'll have to pay the federal tax, the only question is whether you can get the MA overpayment back, assuming there was an overpayment.
2007-04-23 08:17:00 · answer #3 · answered by Still reading 6 · 0⤊ 0⤋
you should probably speak to a tax specialist - i would think that if you lived in mass. then you owe them taxes
2007-04-23 08:17:42 · answer #4 · answered by DoYouKnowMe 2 · 0⤊ 0⤋