Audited 2 years ago by Fed, now state contaced me that I owe them money?

Question

I had an accountant file my returns in 2003, I was audited in 2005, by Federal. I took care of that audit, with my accountant. I remember at the time telling my accountant to make adjustments to that state return and sent him something. Well, the state return was never filed, now I owe 2500, at least 800 is intersting and penalties. I keep calling my accountant and he keeps saying he will call me back and doesn't take any action. I called the state myself, they just want to get paid.
Is there anyway to negotiate the fees and interest since I didn't know about the bill till 2 weeks ago. (2 years after the audit).

The state is CT.

The Federal Return was redone and paid. The accountant nevr filed the State portion.

Help. Any idieas? This was a private CPA firm.

The tax return was filed in 2003, then audited by Fed. in 05, that was done, but the state ammendment was not. The state just got the info. from fed, and are now requesting payment.

Answer 1

When your Federal liability is adjusted based upon an audit it's highly likely that your state liability will be adjusted as well. The IRS notifies the states of any changes to your Federal liability. It's up to the state to determine how that will be handled.

It is YOUR responsibility to ensure that you adjust your state return based upon the changes from the Federal audit. You failed to do so and are now being hit with the additional tax plus penalties and interest. Had you filed an amended return with the state at the time (as you obviously should have) you may have had a case with the state for a remission of the penalties at least. However as you failed to do that, you're now on the hook for the tax plus the penalties and interest due. From the state's perspective, a prudent person would have known about the tax debt 2 years ago, NOT 2 weeks ago.

Many accountants will eat the penalties and interest if the error was theirs though there is no legal requirement for them to do so. (But keep in mind that the IRS and state tax authorities usually consider that income to you!) The tax is exclusively your problem to deal with.

If your CPA isn't responding to you, you may have a complaint with your state's Board of Accountancy. However the requirement to file your return properly and pay any tax due is solely and exclusively yours.

Answer 2

My wife 3 before we got married forgot to hit "send" while e-filing state taxes. She finally got notice this year for the amount and interest. I asked if we could negotiate as I know you can sometime do this with federal taxes. The answer was a resounding NO. They don't care....... individual or CPA it is a person's responsibility to get them in not the states.

Did you file the return in the first place or was it just never filed. Here's the thing either way. The state probably just came to the primary amount you owe with whatever formula and for sure it would not err in your favor.

So you could still amend the first one or just file now. Maybe you did not owe the initial amount and it could be reduced.

You need to go to the CPAs office and ask for copies of the forms in question if you don't already have them. You will need them in court. You probably cannot go to small claims for the primary amount but the interest should be easy. Plus any money lost from work dealing with this. And make sure you write down dates, times and what was said in any communication with anybody..... even phone messages.

Some states will let you set up a payment program. If not and the $2500 is a big bite you can request wage garnishment as that will spread it out.

Answer 3

Withholdings are an estimate, continuously. It looks like something interior the (commonplace) estimate for withholdings would not persist with to you. The "prevalent suspects" are bonus & cost pay...accompanied via oftentimes happening deductions with rather excessive earning, ATM themes, and spouses who artwork with the incorrect withholding status. (a million) as long as you have the minimum withheld each and every twelve months via 12/31/2009 and pay the total volume do via April 15 the subsequent twelve months, you're no longer in violation of the regulation and additionally you will no longer have any themes. The commonplace rule is withhold a minimum of the lessor of: one hundred% of final years entire tax volume or ninety% of what you owe this twelve months. in case you frequently do a minimum of that, you will by no potential have a situation. (see you later as you pay the April fifteenth invoice in complete). (2) you may tell your payroll branch to withhold one extra (dollar) volume or you may tell them a fastened dollar volume to withhold (referred to as a FLAT fee; it tells them to neglect appropriate to the final tax withholding fee tables on your case). yet you will desire to truly attempt to choose the place your particular situation is first: earnings or deductions or particular circumstances. then you particularly can connect a dollar volume to that particular subject while it occurs this twelve months. (3) you additionally will pay anticipated taxes quite than coping with withholding and the W4.

Answer 4

pay the state and take the accountant to court.