4 ms·

Have you actually gotten a penalty? The IRS is just interested in gathering its taxes, it has no interest in punishing you. You have to mess up pretty hard and/

Have you actually gotten a penalty? The IRS is just interested in gathering its taxes, it has no interest in punishing you. You have to mess up pretty hard and/or deliberately to get the IRS on your case.

hexeater 7y ago
I have gotten IRS penalties/interest due to my incorrectly reporting. I was confused about how to report RSU and Stock Option income, and then I was doubly confused about how to do quarterly filings. I am REALLY trying to do this on my own without an accountant. I think I got it right with 2019, but I will find in a few week how far off I am when I try to file. I'd say my interaction feels like the IRS is just painting by numbers - they are just running the numbers and checking if you filed correctly or not. If you did not and the number is significant, they send you a letter.
- iudqnolq 7y ago
  A trick for when you're trying a strategy you aren't sure of: you can overpay the IRS by the amount you would pay if the exceptions you are pretty sure apply actually didn't. They will return the extra to you, and you lose the interest that money could have earned but gain the knowledge for next year of whether you can or can't do what you wanted to try. Depending on your specifics might be cheaper than a tax adviser. Disclaimer: YMMV, I'm not a tax advisor, I pulled this out of my * * *, etc.
- deleted 7y ago
  [deleted]
rdtsc 7y ago
6 years later you don't just get to pay what you owed. There is interest to be paid as well. You can negotiate sure, but they could have just sent a pre-filled form saying "based on W-2 and what we already took out, here is how much you owe us, if you agree, sign, send the check and return it" or even better do it online.
- nightski 7y ago
  In my experience the IRS will get back to you within a few months if there are errors at most with exactly the information you described. Where is this 6 years coming from?
  - TheCondor 7y ago
    I had an examination a few years ago. It was about 5 years after the fact. My wife and I were taking turns doing taxes and for some reason I forgot to give her the paperwork for an investment account one year. It was not a pleasant experience. So they knew about this account, all the years before and then all the years after. We got a letter that said I under-reported my income for some year 5 years prior. I mentions the account and the amount. Explains that since I didn't report that account, it's treated like normal income for that year I owe them $80k plus penalties.... I forget the exact wording but prison time was mentioned for tax evasion in the initial letter. Hired a lawyer, hired an account, refiled that year and then the subsequent years since the account found some more deductions. Then it took about 2 years to get it closed out. We'd write a letter, 3 weeks later we'd get a letter back the said they'd respond to our letter within 90 days. After like 9 months the accepted our new tax submission but insisted we pay the penalties. It took another 15 months for those to get waived. It is infuriating fighting over penalties that no longer apply.

hexeater 7y ago

I have gotten IRS penalties/interest due to my incorrectly reporting. I was confused about how to report RSU and Stock Option income, and then I was doubly confused about how to do quarterly filings. I am REALLY trying to do this on my own without an accountant. I think I got it right with 2019, but I will find in a few week how far off I am when I try to file. I'd say my interaction feels like the IRS is just painting by numbers - they are just running the numbers and checking if you filed correctly or not. If you did not and the number is significant, they send you a letter.

iudqnolq 7y ago
A trick for when you're trying a strategy you aren't sure of: you can overpay the IRS by the amount you would pay if the exceptions you are pretty sure apply actually didn't. They will return the extra to you, and you lose the interest that money could have earned but gain the knowledge for next year of whether you can or can't do what you wanted to try. Depending on your specifics might be cheaper than a tax adviser. Disclaimer: YMMV, I'm not a tax advisor, I pulled this out of my * * *, etc.
deleted 7y ago
[deleted]

rdtsc 7y ago

6 years later you don't just get to pay what you owed. There is interest to be paid as well. You can negotiate sure, but they could have just sent a pre-filled form saying "based on W-2 and what we already took out, here is how much you owe us, if you agree, sign, send the check and return it" or even better do it online.

nightski 7y ago
In my experience the IRS will get back to you within a few months if there are errors at most with exactly the information you described. Where is this 6 years coming from?
- TheCondor 7y ago
  I had an examination a few years ago. It was about 5 years after the fact. My wife and I were taking turns doing taxes and for some reason I forgot to give her the paperwork for an investment account one year. It was not a pleasant experience. So they knew about this account, all the years before and then all the years after. We got a letter that said I under-reported my income for some year 5 years prior. I mentions the account and the amount. Explains that since I didn't report that account, it's treated like normal income for that year I owe them $80k plus penalties.... I forget the exact wording but prison time was mentioned for tax evasion in the initial letter. Hired a lawyer, hired an account, refiled that year and then the subsequent years since the account found some more deductions. Then it took about 2 years to get it closed out. We'd write a letter, 3 weeks later we'd get a letter back the said they'd respond to our letter within 90 days. After like 9 months the accepted our new tax submission but insisted we pay the penalties. It took another 15 months for those to get waived. It is infuriating fighting over penalties that no longer apply.