Isn't it funny how the IRS can take 2 yrs to send a letter about a 2004 tax return and give you 2 weeks to ...

Question

rectify and look over your return to find any oversights???
Plus give you a $1,600. fine before you even have a chance to see where the problem lie???
A productive member of society, pay taxes and I am not even given a chance to see what the problem is and they already fined me . Please share any incidents that you went through that you thought were unfair. Feeling frazzled, thanks for your feedback.

Answer 1

They have so many returns to look through, and only so many people and only so antiquated a computer system, that it takes them a while to go through returns. As far as the fine goes, it's probably more that they are proposing a change to your 2004 and telling you that you owe them x amount in tax, x amount in interest, and x amount in penalties. Along with the letter there should be something indicating what the problem is. You should look at that and see if the irs is correct or not. You have the option of not responding back at all, responding back and saying that you agree with everything they say, responding back and saying that you partly agree, or responding back and saying that you don't agree on anything. Then you need to provide proof to them as to why you either partly agree or totally disagree. They can either accept your proof, reject it, or ask for more info. As far as whether it's fair or not, if you do owe any extra tax, you've had the use of that money for 2 years now, and should have paid the tax correctly back when you filed your original return. The interest is for you having the use of that money for 2 years, and the penalties are to force people into making sure they account for all their income correctly when they file a return.

Answer 2

All of the first notices you receive from the IRS are purposed penalty and interest amounts. I have not seen any first notices that also give you the opportunity for an extension of time to address the issue. That is not to say that they are unnerving. The good news is that a good number are resolved with out either penalty or interest. The big problem comes when folks ignore the first couple of notices and want to fix the problem the last day before a levy.

Answer 3

It has been a few years, but I had a tax client that made a mistake in his payroll deposit (941 deposit) by $0.86 and had to cough up over $25.00 for the error.
Also, back before identify thief was so common placed, a Mexican surname client had liens placed on him and even had his bank account frozen. He had explained to IRS that he was a poor hard working American citizen that had worked at same place for over 12 years and lived in the same city since birth. He lived in Texas, and it was impossible for him to have held down another full time job in California. The IRS claimed he owed over $9,000 in taxes and penalties and interest. And that he had not claimed income on his tax returns from his job in California for two years. I did a the work pro bono. Even with certified statements from his employer, copies of "fake" California drivers license, law enforcement statements, the district IRS office in Dallas would not budge. Only when we took the story to the news media did it resolved and all liens and fines and etc. removed. The kicker is that his credit was still destroyed.
I have had numerous individuals in my profession refer to the IRS as the American 'Gestapo', because they can quickly destroy a person's life. And they operate under limited oversight.

Answer 4

I owed money once to the IRS. They were sure to penalize the balance due with a huge interest amount.... YET... when they owe ME money, they take their sweet time getting it back to me... with no interest accrued. A sweet deal if you ask me.

Ahhh the IRS... busy taking money from the people who earned it to give it to the people who don't. Someone emailed this to me... I wish I could take credit for it, but it addresses an issue I have with the IRS:

"A lot of folks in this state I have a job. I work, they pay me. I pay my taxes and the government distributes my taxes as it sees fit. In order to get that paycheck, I am required to pass a random urine test, with which I have no problem. What I do have a problem with is the distribution of my taxes to people who don't have to pass a urine test. Shouldn't one have to pass a urine test to get a welfare check because I have to pass one to earn it for them?? Please understand, I have no problem with helping people get back on their feet. I do on the other hand have a problem with helping someone sitting on their ***. Could you imagine how much money the state would save if people had to pass a urine test to get a public assistance check?"

Answer 5

The fine they show is only if their numbers are correct. If you can show that you don't owe what they think you owe, then the fine will also be lessened or removed.