3 ms·

How much are you making that a miscalculation leads to an erroneous $51,000 tax bill beyond what you supposedly already paid?

ci5er 8y ago
About $120K~$150K depending on the host country and their particular income tax scheme. Which is not a crap salary, but it's certainly not over the moon Fortune 500 executive comp either. ($50K is about 1/3 of $150K, which is about what a W2 employee would pay - 1099 folks would pay a bit more) There's supposed to be a deduction applied to income taxes paid to your host country - up to a cap. There are two intersecting curves related to host-country taxes paid and US income taxes owed minus the exempted part, which I'm not going to describe here, but through key-entry error or whatever bureaucratic things that happen in paper-processing-office, it is not uncommon to get a bill on a year for about that amount. IF their response to your filing in a year (say 2012) gets lost in the mail and IF the same thing happens the following year - you can owe $100K (on paper - even though mistaken), and not even know it.
duxup 8y ago
I rolled over a 401k... they thought I cashed it out. It was more than 51k that the IRS thought I owed them. Having said that the issue was resolved quickly and I'm not sure them just contacting me and waiting for a response would trigger the law in question. This law could be insanity, or quite reasonable depending on the details.
jandrewrogers 8y ago
I once received a mistaken IRS tax bill of $600,000, more than I had earned in my entire life up to that point. After much paperwork filing, they decided I actually owed them nothing but I still had to go through the process contesting it and providing stacks of documentation. Ironically, they already had the exact same information I had, they simply didn't bother to look at it. So I can easily imagine that it wouldn't be difficult for the IRS to make a mistake and come up with figures much higher than $51k. To their credit, the IRS was fairly reasonable to work with while this was going on. I think the examiner caught on pretty quickly that something didn't make sense.

ci5er 8y ago

About $120K~$150K depending on the host country and their particular income tax scheme. Which is not a crap salary, but it's certainly not over the moon Fortune 500 executive comp either. ($50K is about 1/3 of $150K, which is about what a W2 employee would pay - 1099 folks would pay a bit more) There's supposed to be a deduction applied to income taxes paid to your host country - up to a cap. There are two intersecting curves related to host-country taxes paid and US income taxes owed minus the exempted part, which I'm not going to describe here, but through key-entry error or whatever bureaucratic things that happen in paper-processing-office, it is not uncommon to get a bill on a year for about that amount. IF their response to your filing in a year (say 2012) gets lost in the mail and IF the same thing happens the following year - you can owe $100K (on paper - even though mistaken), and not even know it.

duxup 8y ago

I rolled over a 401k... they thought I cashed it out. It was more than 51k that the IRS thought I owed them. Having said that the issue was resolved quickly and I'm not sure them just contacting me and waiting for a response would trigger the law in question. This law could be insanity, or quite reasonable depending on the details.

jandrewrogers 8y ago

I once received a mistaken IRS tax bill of $600,000, more than I had earned in my entire life up to that point. After much paperwork filing, they decided I actually owed them nothing but I still had to go through the process contesting it and providing stacks of documentation. Ironically, they already had the exact same information I had, they simply didn't bother to look at it. So I can easily imagine that it wouldn't be difficult for the IRS to make a mistake and come up with figures much higher than $51k. To their credit, the IRS was fairly reasonable to work with while this was going on. I think the examiner caught on pretty quickly that something didn't make sense.