Money I owe the IRS $4,000 - Page 5

siberian khatru · 02-14-2020, 06:15 PM

So I get home and the wife says she’s got bad news: A letter from the IRS saying we owe $4,000 on our 2018 taxes.

Apparently, she sent all the right paperwork to our tax preparer, but when the preparer returned the completed forms she forgot to include one. My wife failed to check that and signed the return (and got me to sign off, trusting her) and sent it off.

So here we are. My wife is afraid I’m going to divorce her. (I’m not.)

Anyone have an experience like this? Do we have any recourse? That 4 Grand could buy a lot of Super Bowl swag.

threebag · 02-15-2020, 12:17 AM

Quote:

Originally Posted by 007

I'd definitely have words with the preparer.

Does his bush overgrow your yard?

DRU · 02-15-2020, 12:26 AM

What was the form that was forgotten? Was it a 1099? Or do you have any 1099s in general, included or not?

If so, did you maximize all of the possible business deductions you could? There are many that you may not realize.

You could probably chew up that $4k pretty quickly in deductions from cell phone, home office, travel, auto expenses, meals, etc.

For example, as long as you have a separate personal line (which could be Skype, Google voice, etc.) for home, the IRS will allow you to call your cell phone a business expense without worrying about splitting up personal vs. business use. 100% deduction. Just document that you have that personal line and you're set. If you pay $1200/year for cell phone and you're in the 25% bracket, that's $300 in savings, so that would bring your liability down to $3700.

Do you have a room in the house that is used for only business? The simplified home office deduction gives you a deduction of $5/sq. ft. This maxes out at 300 sq. ft. (or a $1500 deduction). If you have a space like this that's another $375 in savings, bringing your liability down to $3325.

Did you document (or can you now) mileage that was used for business with your car? Maybe you drove 2k miles for business, which at a rate of 54.5 cents per mile gives you a deduction of 1,090, which would result in another $272.50 of savings, bringing your liability down to $3,052.50.

Do you have kids that helped you in the business? If they're under 18, you could put them on payroll, and get a deduction for that expense. Since they're under 18 you don't have to mess with payroll taxes or anything, and they would $0 in taxes on up to $12k of income. Say you pay your 12 year old to clean your office, sort your mail, shred documents, lick envelopes, or any other task you can have them doing. Document their hours at a reasonable wage, and you can deduct it. Say you paid them $1500 in wages for the year, that would be another $375 in savings bringing your liability down to $2,677.50.

I could go on and on. There are all sorts of perfectly legitimate ways to reduce your tax liability that many don't consider, but it all depends on having a small business of some sort. Opens doors to all sorts of tax savings.

Amend your return, do as much of this as you possibly can with your CPA helping you strategically, and you can probably chew up the entire liability.

Nickhead · 02-15-2020, 02:28 AM

Quote:

Originally Posted by scho63

Good News and Bad News:

-Bad News is you still owe $4,000

-Good News is you can now PIIHB because she is so ravaged by guilt, she will do anything to get back in your good graces!

Strike while the iron's hot!

just don't steal her water

Skyy God · 02-15-2020, 09:46 AM

I’d kindly request your CPA pay the penalties and interest.

**RockChalk** · 02-15-2020, 10:32 AM

Quote:

Originally Posted by siberian khatru

So I get home and the wife says she’s got bad news: A letter from the IRS saying we owe $4,000 on our 2018 taxes.

Apparently, she sent all the right paperwork to our tax preparer, but when the preparer returned the completed forms she forgot to include one. My wife failed to check that and signed the return (and got me to sign off, trusting her) and sent it off.

So here we are. My wife is afraid I’m going to divorce her. (I’m not.)

Anyone have an experience like this? Do we have any recourse? That 4 Grand could buy a lot of Super Bowl swag.

As a tax planner and advisor (yes, I also prepare), your preparer could/should potentially compensate you for any penalty associated with the balance due, assuming the preparer made a mistake in this case.

However, before you pay the penalty portion on your balance due, see if your preparer is willing to write a letter to the IRS, or assist you in writing a letter to the IRS. The IRS typically allows a one-time courtesy write off of any penalty for taxpayers who are not habitual late filers, etc. Since you mentioned that you've never had this happen to you before, I would bet you are eligible to have the penalty removed. They won't remove the interest, so don't even go down that road, haha.

**RockChalk** · 02-15-2020, 10:34 AM

Quote:

Originally Posted by DaFace

I bet you could at least get them to forgive the interest.

The IRS will never forgive interest. It's a waste of time to ask for it.

However, they will remove penalties. I explained how to go about it in a post above.

Most good CPA firms, mine included, usually offer to help with the penalty portion if the mistake is our fault

Funkstown · 02-15-2020, 10:49 AM

Taxation Is Theft. **** these criminals suing you.

TLO · 02-15-2020, 11:21 AM

Quote:

Originally Posted by Mennonite

Chuck some tea into the nearest large body of water and beat the shit out of every British person you come across.

LOL - What did I just watch?

Skyy God · 02-15-2020, 11:37 AM

Quote:

Originally Posted by TLO

LOL - What did I just watch?

He’ll save children but not the British children.

Jerok · 02-15-2020, 11:52 AM

My wife would say it was my fault that I trusted her and get mad at me for saying that is stupid.

nbkc fan · 02-15-2020, 02:42 PM

CPA here- a simple letter explaining it and that you relied on a tax preparer is usually sufficient to remove penalties. RockChalk above is right, you’re stuck with the interest 99% of the time since you had use of the money. Might be able to get that refunded by tax preparer, but YMMV.

SuperBowl4 · 02-15-2020, 02:47 PM

Quote:

Originally Posted by Nickhead

just don't steal her water

"if you ever wanna be a Mexican cook well you otta, just don't drink the watta" - WIERD Al Yankovich

SuperBowl4 · 02-15-2020, 02:49 PM

Quote:

Originally Posted by Funkstown

Taxation Is Theft. **** these criminals suing you.

what schmuck gave this a thumb down? OBEY!

dlphg9 · 02-15-2020, 02:57 PM

Easy solution is to do an amended return. Better yet have your tax person that ****ed you do an amended return. What form was it tbat she forgot that made you owe 4k?

dlphg9 · 02-15-2020, 03:04 PM

Im pretty sure the best idea was to just throw it in the trash like it never happened.

02-14-2020, 06:15 PM
siberian khatru 21st Century Schizoid Fan Join Date: Jul 2002 Location: The Gates of Delirium Casino cash: $2644950	I owe the IRS $4,000 So I get home and the wife says she’s got bad news: A letter from the IRS saying we owe $4,000 on our 2018 taxes. Apparently, she sent all the right paperwork to our tax preparer, but when the preparer returned the completed forms she forgot to include one. My wife failed to check that and signed the return (and got me to sign off, trusting her) and sent it off. So here we are. My wife is afraid I’m going to divorce her. (I’m not.) Anyone have an experience like this? Do we have any recourse? That 4 Grand could buy a lot of Super Bowl swag.
Posts: 69,115

02-15-2020, 12:26 AM	#62
DRU To the Game Join Date: Oct 2003 Casino cash: $7293516	What was the form that was forgotten? Was it a 1099? Or do you have any 1099s in general, included or not? If so, did you maximize all of the possible business deductions you could? There are many that you may not realize. You could probably chew up that $4k pretty quickly in deductions from cell phone, home office, travel, auto expenses, meals, etc. For example, as long as you have a separate personal line (which could be Skype, Google voice, etc.) for home, the IRS will allow you to call your cell phone a business expense without worrying about splitting up personal vs. business use. 100% deduction. Just document that you have that personal line and you're set. If you pay $1200/year for cell phone and you're in the 25% bracket, that's $300 in savings, so that would bring your liability down to $3700. Do you have a room in the house that is used for only business? The simplified home office deduction gives you a deduction of $5/sq. ft. This maxes out at 300 sq. ft. (or a $1500 deduction). If you have a space like this that's another $375 in savings, bringing your liability down to $3325. Did you document (or can you now) mileage that was used for business with your car? Maybe you drove 2k miles for business, which at a rate of 54.5 cents per mile gives you a deduction of 1,090, which would result in another $272.50 of savings, bringing your liability down to $3,052.50. Do you have kids that helped you in the business? If they're under 18, you could put them on payroll, and get a deduction for that expense. Since they're under 18 you don't have to mess with payroll taxes or anything, and they would $0 in taxes on up to $12k of income. Say you pay your 12 year old to clean your office, sort your mail, shred documents, lick envelopes, or any other task you can have them doing. Document their hours at a reasonable wage, and you can deduct it. Say you paid them $1500 in wages for the year, that would be another $375 in savings bringing your liability down to $2,677.50. I could go on and on. There are all sorts of perfectly legitimate ways to reduce your tax liability that many don't consider, but it all depends on having a small business of some sort. Opens doors to all sorts of tax savings. Amend your return, do as much of this as you possibly can with your CPA helping you strategically, and you can probably chew up the entire liability.
Posts: 2,122

02-15-2020, 09:46 AM	#64
Skyy God 11-5, baby Join Date: Sep 2005 Location: Livin the dream Casino cash: $2191557	I’d kindly request your CPA pay the penalties and interest.
Posts: 22,416

02-15-2020, 10:49 AM	#67
Funkstown Starter Join Date: Oct 2018 Location: DC burbs Casino cash: $10000400	Taxation Is Theft. **** these criminals suing you.
Posts: 146	2 2

02-15-2020, 11:52 AM	#70
Jerok Veteran Join Date: Sep 2013 Casino cash: $4994092	My wife would say it was my fault that I trusted her and get mad at me for saying that is stupid.
Posts: 2,407

02-15-2020, 02:42 PM	#71
nbkc fan Starter Join Date: May 2003 Location: Santa Monica, CA Casino cash: $3586280	CPA here- a simple letter explaining it and that you relied on a tax preparer is usually sufficient to remove penalties. RockChalk above is right, you’re stuck with the interest 99% of the time since you had use of the money. Might be able to get that refunded by tax preparer, but YMMV.
Posts: 101

02-15-2020, 02:57 PM	#74
dlphg9 MVP Join Date: Oct 2010 Casino cash: $2269653	Easy solution is to do an amended return. Better yet have your tax person that ****ed you do an amended return. What form was it tbat she forgot that made you owe 4k?
Posts: 16,737

02-15-2020, 03:04 PM	#75
dlphg9 MVP Join Date: Oct 2010 Casino cash: $2269653	Im pretty sure the best idea was to just throw it in the trash like it never happened.
Posts: 16,737

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