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Post by deltakaren on Mar 31, 2017 15:30:08 GMT
The IRS says we owe money...
DH is self employed in 2015 he was issued a 1099-MISC, the business put the income in box 3 (other income) instead of box 7 (non employee compensation), which I did not catch. We treated this as business income (we paid self employment tax) and I have all the documentation to prove it.
How do I phrase that I screwed up in 2015 and totally missed that they had listed it as other income? What can I say, I was looking at the numbers in the box, not the number of the box.
Thanks,
Karen
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Post by workingclassdog on Mar 31, 2017 15:33:59 GMT
Yes I would just say exactly what you did. Do you now owe money?
I totally screwed up 2 years in a row. First time I didn't write a letter I just am making payments on what I owe. Last year AGAIN, I messed up (our income was all over the place) and when I loaded my W2 for some reason it didn't 'take' on Turbo Tax.. I don't know if I didn't hit a 'submit' button or what?? But now I am paying for that mistake. I wrote a letter asking them to waive the penalties and/or fees (if applicable). Just told them what I did.
I guess in over 20 years in doing my taxes I messed up twice.. I guess not to bad of a record... this year my boss is doing my taxes as I am not trusting myself at ALL.
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Post by ktdoesntscrap on Mar 31, 2017 15:36:37 GMT
Personally I would just call.
In my experience the IRS are very helpful when you ask them questions.
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Post by deltakaren on Mar 31, 2017 15:42:17 GMT
I don't think we should owe any money...unless they are going to start taxing us for not paying attention! It was a CP2000 (which is a proposed amount we owe). I thought the IRS screwed up and someone entered our information wrong. It wasn't until I pulled out the 1099 and noticed the money was in box 3 not box 7. I don't know if the person filling out the 1099 thought they were doing us a favor (so we wouldn't have to pay SE tax) or they just didn't know what they were doing.
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Post by Bitchy Rich on Mar 31, 2017 15:45:22 GMT
Just write that you included it in business income on Sch C. They are looking for it to show up on the Other Income line of your 1040. You don't owe tax.
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Post by deltakaren on Mar 31, 2017 15:53:24 GMT
Just write that you included it in business income on Sch C. They are looking for it to show up on the Other Income line of your 1040. You don't owe tax. Thank you!! See....I told you I needed help! This is what happens when I start over thinking, I start to freak out and over complicate things! Karen |
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freebird
Drama Llama
'cause I'm free as a bird now
Posts: 6,927 
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Post by freebird on Mar 31, 2017 17:01:58 GMT
My husband's ex did their taxes while they were still married but separated (don't get me started on that stupid shit). Well, she purposely left an entire W-2 off of their return ($20k+) so she could get the return. (she lied and said they didn't get it btw, but he figured it out).
So, that $5k return turned into over $9k in fines, penalties and interest. He had to pay it all himself. Finally when he got down to about $2k he wrote a letter to the IRS. I didn't think it was going to work so I didn't even bother to read it. He just told the story of how messed up she was at the time I guess. (long story).
The waived all the penalties! Took a grand off of the total, That was just so great.
The IRS is not like the IRS of old. While helping him sort it all out I talked to the IRS many times and everyone was very kind and helpful.
Write the letter, whats the worst that could happen.
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Post by librarylady on Mar 31, 2017 17:06:23 GMT
Not a CPA.......
But, I think you could submit an amended/corrected tax return for the year in question...and go from there.
A friend is a CPA and looks in over here from time to time.
I'll ask her to give an opinion.
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MerryMom
Pearl Clutcher
Posts: 2,615
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Post by MerryMom on Mar 31, 2017 17:18:16 GMT
Not a CPA....... But, I think you could submit an amended/corrected tax return for the year in question...and go from there. A friend is a CPA and looks in over here from time to time. I'll ask her to give an opinion.  link to IRS tips for filing an amended tax return |
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Post by librarylady on Mar 31, 2017 17:33:16 GMT
Here is what my CPA friend has to say:
I'm not a member of that group so don't think I can post.
But it doesn't sound to me like she needs to file an amended return. Sounds like to me that the IRS could be confused about where she reported the income. She could call the IRS but prepare to sit on hold. She should probably sit down with a CPA or tax preparer to be sure what the problem really is and what needs to be done. One she determines that she could write the letter or have a CPA/tax preparer write it for her.
Feel free to copy this to the group for me.
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Post by Bitchy Rich on Mar 31, 2017 17:53:31 GMT
No, don't file an amended return. You reported the income. It's just not where they are looking for it. I think you're in for a huge wait if you call the IRS at this time of the year. Write a simple explanation and mail it back. If they don't like it, they'll send you another letter.
Don't get worked up about it. You don't owe any tax. You're not going to rack up any penalties or interest.
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Post by mirabelleswalker on Mar 31, 2017 19:07:32 GMT
We had an error, in OUR FAVOR, that the IRS found and it was a nightmare to resolve.
We had to file an amended return.
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mlana
Pearl Clutcher
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Post by mlana on Mar 31, 2017 19:39:56 GMT
Personally I would just call. In my experience the IRS are very helpful when you ask them questions. Calling the IRS is an exercise in futility. Phone agents are not accountable for any information they provide to you. Only information presented in writing is official. I paid off a debt to the IRS, then called a month later to be sure there were no penalties or interest left owing. Nope, the agent said, you're all paid off. Three years later I got a letter stating a balance of $90 had been left owing on the account. The amount was then much higher as 3 years of interest and penalties had been applied. I pulled up my phone log and called them with the date and time I had called and the name and id number of the agent I has spoken with that day. Nope, not our concern- nothing was in writing. Marcy |
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Post by ktdoesntscrap on Mar 31, 2017 21:16:54 GMT
Personally I would just call. In my experience the IRS are very helpful when you ask them questions. Calling the IRS is an exercise in futility. Phone agents are not accountable for any information they provide to you. Only information presented in writing is official. I paid off a debt to the IRS, then called a month later to be sure there were no penalties or interest left owing. Nope, the agent said, you're all paid off. Three years later I got a letter stating a balance of $90 had been left owing on the account. The amount was then much higher as 3 years of interest and penalties had been applied. I pulled up my phone log and called them with the date and time I had called and the name and id number of the agent I has spoken with that day. Nope, not our concern- nothing was in writing. Marcy that makes sense. I would still call and ask what to do.. then I would follow up with the letter. |
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Post by deltakaren on Apr 1, 2017 1:53:13 GMT
I attempted to call the number provided...lost cause. I then penned a letter stating that the income in question was reported on schedule C and include necessary paperwork....copy of 1040, schedule C, supporting documents for income (including a copy of the 1099 in question)and schedule SE (showing that we paid self employment tax). I think I covered everything and now will be waiting for another letter from the IRS stating they believe me! LOL
Thanks for all the help!
Karen
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Post by workingclassdog on Apr 1, 2017 2:20:06 GMT
Oh yeah, calling the IRS is like nails on a chalkboard and that is during the slow times. I worked in a CPA office for 20 years and there were times we had to call. My boss actually had me sit in his office while on hold while he went and grabbed lunch. So calling is a nightmare!
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Post by Darcy Collins on Apr 1, 2017 15:56:44 GMT
I called when I received a notice that we filed late. I have sent certified mail and had receipts showing we mailed by the deadline. I made sure to use a speaker phone as the wait was long - but ultimately connected with a person. I faxed the receipts to her while still on hold and she confirmed receipt and no penalties owed. I'd probably start with a phone call - they ask if you're responding to a letter versus just having a question - be sure and hit that you're responding to a letter, or you'll get the generic I don't know anything q&a people.
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