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    More IRS Fun

    Received a letter from the IRS yesterday, a form CP2000 Under Reporters adjustment. I was shocked to read they made an adjustment to our 2013 return and that we owed $30,000. Now this isn't the first one I've received over the years, there have been two others, one for $50 and one for $130 for which I just wrote an check and moved on.

    When I saw the $30k I have to admit I nearly vomited. There was no way we could possibly owe that much, we don't make enough to owe $30k but it is still a scary feeling. I couldn't even collect myself at the mailbox to finish reading the notice. I went by the safe grabbed the 2013 taxes and found the wife. She said I was white as a ghost.

    After making it through the notice turns out the wife worked a couple weeks for a company who paid her via a 1099, $880.10. The IRS is proposing that it was $88,010.00.

    I can only imagine how much fun it will be getting their error corrected.
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    Senior GTT Super Slacker Gizmo2's Avatar
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    psrumors, I know it's not funny but we also received a notice (the day we brought the new truck home) from IRS for our 2013 taxes. Apparently IRS thinks we owe them approximately $8,600.00. To say I was completely overwhelmed by the notice would be an understatement, so I have a good idea of what you say about being white as a ghost. I gathered up all the 2013 stuff and took it to our accountant. Good luck with yours.
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    Corndog Hater ColonyPark's Avatar
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    Good luck guys, and I will be keeping my fingers crossed that nothing like that shows up here.


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    Bill Berger's Avatar
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    This is exactly why I'm a strong advocate of this:

    Pass the Fair Tax | FAIRtax.org
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    The I.R.S. must love poor folks, they create more and more every day.

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    Quote Originally Posted by psrumors View Post
    Received a letter from the IRS yesterday, a form CP2000 Under Reporters adjustment. I was shocked to read they made an adjustment to our 2013 return and that we owed $30,000. Now this isn't the first one I've received over the years, there have been two others, one for $50 and one for $130 for which I just wrote an check and moved on.

    When I saw the $30k I have to admit I nearly vomited. There was no way we could possibly owe that much, we don't make enough to owe $30k but it is still a scary feeling. I couldn't even collect myself at the mailbox to finish reading the notice. I went by the safe grabbed the 2013 taxes and found the wife. She said I was white as a ghost.

    After making it through the notice turns out the wife worked a couple weeks for a company who paid her via a 1099, $880.10. The IRS is proposing that it was $88,010.00.

    I can only imagine how much fun it will be getting their error corrected.
    Dang, that is scary.
    I'm sure you will get it straitened out but what a pain to deal with.
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    I'm a CPA, but I don't practice any more. That being said, the OP's situation shouldn't be too hard to take care of. If you have a professional prepare your taxes, take it to them and pay them the $200 or so that it will take of their time to rectify the situation. If you do your own taxes, here's what I'd suggest...

    1) Contact the company that your wife worked for. Ask them if they submitted their 1099's to the IRS via paper copy or magnetic media. This really won't matter to the IRS, but it could help explain what happened. If they submitted them via paper copy, once those get to the IRS someone has to key-punch the information into the IRS's computers. Obviously it was some sort of keypunch error at the IRS.** If they submitted them via magnetic media, there might be something wrong with the company's software. Those files are fixed length files and many "fields" don't get used. Some unused fields are populated with zeroes and others are populated with blanks. It's a pretty tedious job to sort those fields out and make sure the right values are in the right place in the file. If there is a problem with the file that was submitted, take heart in knowing that, most likely, everyone else that got a 1099 from that company is also getting IRS notices right now. If they filed mag media, you might request a letter from the company (that you can forward to the IRS) explaining the error. If the error is on the company's end, they MUST contact the IRS to straighten it up. Request that they give you copies of everything they submit to the IRS so you can submit with your letter(s) as well.

    **NOTE: No one outside of the IRS really knows for sure how their systems work, but there should have been some sort of checking algorithm that found such an error. Along with the 1099s, the company also has to submit a 1096 which is a reconciliation of the amounts sent on the 1099s. One would think that their programmer (which is what I do now) would have written some sort of cross check to make sure that the amounts keyed in match the 1096.

    2) Write the IRS a letter explaining the situation - that you only got $800 instead of $80k. Include a copy of the 1099 from the company. If you have any check stubs from the company that match the 1099 amounts, make copies and include them as well. Be polite in the letter and just lay out the facts. Include any pertinent information that you can get from the company. Make sure the letter includes the "notice number" from the IRS's letter and include a copy of the notice in what you send them. Send the letter via certified mail - return receipt requested.

    It may take several weeks (or months) for the IRS to reply back to you. Don't fret too much about it - it will get straightened up. They won't garnish your bank accounts or anything like that without notice so don't worry about that either.

    3) If you live near a city that has a Federal Building, check to see if there's a local IRS office that you can go to. Instead of mailing the information from step 2, take to them and deliver it in person. You can usually do this without any sort of appointment. Don't be afraid to ask for a supervisor instead of just the person at the counter. Take an additional set of copies of what you're giving them and have them date-stamp a receipt date on your documentation. Be aware that you will have to go through a metal detector at the Federal Building so leave your pocket knife at home.

    Again - don't lose any sleep about this. It's merely some sort of clerical error and it will get straightened up. Also, be patient with the IRS employees. Not to be mean, but some of them (many of them!) aren't the sharpest pencils in the drawer. I had a situation with a client many years ago where the IRS had three errors on their calculations of what he owed. I pointed out the three errors in a letter. A week or so later (I was dealing with someone local so it was "quick" turnaround) I got a revised amount taking into account one of the errors. I sent another letter thanking them for taking care of one error, but pointed out there were still two other things that needed taken care of. Next week, another revision with just one of the items taken care of. Another letter and finally they took care of the third item. Had we relied on just the IRS's original revision, it would have made a $15k difference in what my client owed. So, be patient, be polite and stick to your guns since you don't owe them a dime.

    GOOD LUCK!
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    The IRS does make mistakes from time to time...I got a call at work one time...the guy introduced himself, and said he was from the IRS. I asked him what I could do for him, and he says "I wanted to talk to you about this $7800 you owe us". My jaw dropped; I had my taxes all in order, and as far as I knew I didn't owe them a dime, and I told them so. He asked me my name, and I told him; he asked me if my wife's name was "Winnie", and I said "No". The address was different also. Turns out the guy had the same name as me and apparently owed not only the IRS but had skipped out on some other bills. I was getting duns from all sorts of folks.
    Have wings, will travel.

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    It's to bad you have to pay someone to fix an IRS mistake.. Dealing with them yourself is not always so easy. Been there done that. I have also had the cold sweat vomiting feeling myself.. Not fun at all. Retired 12 years ago from my business of 30 years, should have did that years ago.. I'd be retired now if I had. JT
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    Quote Originally Posted by jefftaylor View Post
    It's to bad you have to pay someone to fix an IRS mistake.. Dealing with them yourself is not always so easy. Been there done that. I have also had the cold sweat vomiting feeling myself.. Not fun at all. Retired 12 years ago from my business of 30 years, should have did that years ago.. I'd be retired now if I had. JT
    We shouldn't have to pay someone to fix a government mistake. Who pays to fix our mistakes? - We do. I've had to deal with them before also and it is not fun at all. I hope you guys make out OK.
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    Quote Originally Posted by Bill Berger View Post
    This is exactly why I'm a strong advocate of this:

    Pass the Fair Tax | FAIRtax.org
    Sounds great, but do you think the rich will let it happen? They wouldn't be able to buy the tax breaks they get now!
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