...I hate the IRS! (And I'm not too fond of TurboTax either these days)
Long story short...Two years ago, after doing my tax return with TurboTax, I recieved a larger than normal tax return. At the time, I thought nothing of it. We usually got decent refunds each year and while this was larger, I thought it was mainly due to the larger salaries my wife and I were earning. Well, my refund went back down to normal levels and now I find out why...Turbotax took both my wife's income and my income and counted it all as mine. Then it deduced that I paid too much in social security as a result and refunded it back to me. So now I get a letter asking me to pay back the refund I took in error back in March 2006 PLUS Interest on said refund PLUS a "Late Payment Penalty" for not paying it back sooner (how was I supposed to pay it back sooner when I NEVER KNEW I HAD TO PAY IT BACK UNTIL THIS MONTH!)
My tax friend said I should call the friendly folks at the IRS to explain to them my error and to ask them if they would consider removing the interest and late payment penalties and I would gladly pay the back taxes I obviously owed. What a painful experience!
First, the IRS has a telephone prompt system from the 1980's...It took me a good 10 minutes to weave my way through the various prompts to reach a live person. It was almost like they were hoping I would give up trying to speak to a live person and just pay thier extortion money.
Second, once I got through the prompts, I was put into a Musak queue that lasted an additional 25 minutes "while I waited for the next available agent". Once again, they seemed to want me to give up.
Now I get to speak to a live agent after waiting a good 1/2 hour plus. Already fired up, I start to explain my plight (My defense being, "I relied on TurboTax and it screwed me"). I explained how a CPA friend confirmed the IRS was right and I was ready to pay the back taxes but thought they could help out on the interest and penalty portion. The helpful agent explains that I will have to fill out one form to request abatement on the interest (Form 843) and send a seperate letter requesting the removal of a penalty. She also said to pay the full amount (including interest and penalties) and ask for the refund later, so I do not accrue any further penalties and interest while they decide whether they should grant my requests...
I have no problem paying the backtaxes. That was, in essence, my fault. And if it comes down to it, I will pay the interest (although I'm going after TurboTax to pick that up in the end...it was thier error that resulted in the Fed not getting thier money on time). But I'll be damned if anyone is going to pay the government for assessing a late payment penalty when it was they who never notified me (until this month) that I was late in getting them thier money...
And people wonder why government gets a bad name...
3 comments:
Hi, I work as an accountant in Canada. Recommendations I have observed by most accountants here is to pay the principal and request a review of the interest and penalties. An I&P on the outstanding balance will also be reversed once they have adjusted for you. Unfortunately, if they don't adjust you will have a little bit more today, but I suspect it will be minimal. You may also want your tax friend to write the letter on your behalf. In my neck of the woods it seems to hold a little more weight (so to speak).
To Bob:
Since the return is from year ending 2005 and I used your online product, I can not review the choices I made. Turbotax only lets me review my inputs on the most recent tax return I complete.
I still believe I am in the right regardless. In what situation, would I claim a W-2 as mine when the Name and SS# listed on the W-2 are not me? Shouldn't Turbotax raise a flag at least when a user is claiming income as his own when the W-2 says otherwise???
Post a Comment