8 ms·

You forgot the part about when == is != they get to charge you a giant penalty. That's no accident.

pdubs 14y ago
Only if it's malicious or intentional. A mistake will be picked up and you'll get a form a year or two later asking you to accept or challenge proposed corrections. If less tax was paid than required you have to pay that + interest...which really isn't that unreasonable. I'm not saying the whole system isn't needlessly complex, but don't make it out like the IRS is actively out to get you.
- pc86 14y ago
  My return for 2008 or 09 was a mess. I had one 1099 I never received from a former employer I'm convinced was trying to screw me, I had one 1099 sent to a former address and a debt forgiveness 1099 from a credit card charge off. I got a packet from the IRS listing the adjustments, what they proposed I owed and very clear and detailed instructions on how to respond to each of the three changes. Incredibly easy to resolve the entire ordeal within weeks, including full payment. I have no doubt that if the IRS truly made it a policy to extract as much money from everyone as they could, they would have just audited me and nit picked every math error ad nauseum until I was drowning in penalties and interest. This is part of why I have a CPA now.
  - pdubs 14y ago
    I challenged the adjustments to one of my returns and the most difficult part for me was finding a damn fax machine while I was on hold with a very helpful woman at the IRS. In the end they admitted they made a mistake (to their credit, an understandable one) in saying that I made a mistake and I lost a total of maybe an hour or two of my time.
    - pc86 14y ago
      I'm sure if I didn't have three separate things to verify and pay or challenge it would have been quicker :) I ended up challenging one of the three and I spent more time writing that letter and including supporting documentation than anything else.
- Hannan 14y ago
  >> If less tax was paid than required you have to pay that + interest...which really isn't that unreasonable. If I pay too much, do I get interest back on the overage?
  - zieski 14y ago
    If you made the mistake of paying too much, why would the government be liable for the interest on that error?
    - Hannan 14y ago
      It's not so much of a mistake, per se, but a function of dealing with estimated tax payments as a self-employed person with fluctuating income. I could very easily pay the amounts required, and then suffer a bad Q4 and have a much lower tax obligation than what I've paid in, all while meeting the mandatory minimums that the IRS requires me to pay quarterly. Of course, I'm not allowed to just pay the full amount when due, which would solve the problem (for me, but potentially cause much larger problems for people and the government w.r.t. those who don't/can't budget appropriately). It is nice to hear (from fotbr) that in the case of an actual mistake on behalf of the IRS that they actually pay interest... I did not know that, and wouldn't have expected it.
  - fotbr 14y ago
    I got paid interest because the IRS took longer than they were supposed to when they processed my return claiming the first time homeowner credit. I wasn't expecting it, and I certainly wasn't expecting the interest rate I was paid to be higher than any non-credit-card interest rate, but it was. I treated myself to a bottle of Lagavulin 16 and a couple good cigars.
  - stevenbedrick 14y ago
    Yes, usually.
ajross 14y ago
No one pays penalties for simple mistakes. That's what FOX news tells you, but it's not true. We've made five-figure goofs on taxes in the past and a simple letter explaining the mistake (assuming it's an explainable mistake and you didn't get caught in actual attempted fraud) is enough to get the penalty waved.
- sliverstorm 14y ago
  This is my experience as well, and the experience of everyone I know. At least for us, the IRS is not out to give us the run-around. Besides, if you think about it, even if you figure the IRS is greedy and only motivated by money, the biggest returns for them are catching fraudulent millionaires dodging tens or hundreds of thousands, rather than slapping you with a $100 fine over a $2.38 mistake.
  - KMag 14y ago
    Another profitable tactic would be to find the sweet spot of people who make enough money that they can be accused of large tax errors, but not make so much money that they can afford to fight it all the way out in court.
- brk 14y ago
  Seconded. Mine was a 6 figure mistake. I fact, it COST the IRS money to contact me. Once they sent info I realized the error, and that I did not in fact owe 6 figures. Paid it anyway so my wife wouldn't stress about penalities, restated ( took a year) and then received a refund with hefty interest paid by the IRS. Along the way their support line was helpful in getting some questions answered.
  - FireBeyond 14y ago
    At the risk of seeming flippant, but if you can afford to pay a six figure mistake just "so my wife wouldn't stress", then she probably really didn't have too much to stress about, financial burden of penalties or otherwise.
anigbrowl 14y ago
Rubbish. I made a $250 mistake on my tax return a few years ago and they just wrote me a nice letter about it. The only penalty I paid was some tiny dollar amount of interest. I don't dispute that people can have bad experiences with the IRS but they're not going to drop the hammer on you over a math error.

pdubs 14y ago

Only if it's malicious or intentional. A mistake will be picked up and you'll get a form a year or two later asking you to accept or challenge proposed corrections. If less tax was paid than required you have to pay that + interest...which really isn't that unreasonable. I'm not saying the whole system isn't needlessly complex, but don't make it out like the IRS is actively out to get you.

pc86 14y ago
My return for 2008 or 09 was a mess. I had one 1099 I never received from a former employer I'm convinced was trying to screw me, I had one 1099 sent to a former address and a debt forgiveness 1099 from a credit card charge off. I got a packet from the IRS listing the adjustments, what they proposed I owed and very clear and detailed instructions on how to respond to each of the three changes. Incredibly easy to resolve the entire ordeal within weeks, including full payment. I have no doubt that if the IRS truly made it a policy to extract as much money from everyone as they could, they would have just audited me and nit picked every math error ad nauseum until I was drowning in penalties and interest. This is part of why I have a CPA now.
- pdubs 14y ago
  I challenged the adjustments to one of my returns and the most difficult part for me was finding a damn fax machine while I was on hold with a very helpful woman at the IRS. In the end they admitted they made a mistake (to their credit, an understandable one) in saying that I made a mistake and I lost a total of maybe an hour or two of my time.
  - pc86 14y ago
    I'm sure if I didn't have three separate things to verify and pay or challenge it would have been quicker :) I ended up challenging one of the three and I spent more time writing that letter and including supporting documentation than anything else.
Hannan 14y ago
>> If less tax was paid than required you have to pay that + interest...which really isn't that unreasonable. If I pay too much, do I get interest back on the overage?
- zieski 14y ago
  If you made the mistake of paying too much, why would the government be liable for the interest on that error?
  - Hannan 14y ago
    It's not so much of a mistake, per se, but a function of dealing with estimated tax payments as a self-employed person with fluctuating income. I could very easily pay the amounts required, and then suffer a bad Q4 and have a much lower tax obligation than what I've paid in, all while meeting the mandatory minimums that the IRS requires me to pay quarterly. Of course, I'm not allowed to just pay the full amount when due, which would solve the problem (for me, but potentially cause much larger problems for people and the government w.r.t. those who don't/can't budget appropriately). It is nice to hear (from fotbr) that in the case of an actual mistake on behalf of the IRS that they actually pay interest... I did not know that, and wouldn't have expected it.
- fotbr 14y ago
  I got paid interest because the IRS took longer than they were supposed to when they processed my return claiming the first time homeowner credit. I wasn't expecting it, and I certainly wasn't expecting the interest rate I was paid to be higher than any non-credit-card interest rate, but it was. I treated myself to a bottle of Lagavulin 16 and a couple good cigars.
- stevenbedrick 14y ago
  Yes, usually.

ajross 14y ago

No one pays penalties for simple mistakes. That's what FOX news tells you, but it's not true. We've made five-figure goofs on taxes in the past and a simple letter explaining the mistake (assuming it's an explainable mistake and you didn't get caught in actual attempted fraud) is enough to get the penalty waved.

sliverstorm 14y ago
This is my experience as well, and the experience of everyone I know. At least for us, the IRS is not out to give us the run-around. Besides, if you think about it, even if you figure the IRS is greedy and only motivated by money, the biggest returns for them are catching fraudulent millionaires dodging tens or hundreds of thousands, rather than slapping you with a $100 fine over a $2.38 mistake.
- KMag 14y ago
  Another profitable tactic would be to find the sweet spot of people who make enough money that they can be accused of large tax errors, but not make so much money that they can afford to fight it all the way out in court.
brk 14y ago
Seconded. Mine was a 6 figure mistake. I fact, it COST the IRS money to contact me. Once they sent info I realized the error, and that I did not in fact owe 6 figures. Paid it anyway so my wife wouldn't stress about penalities, restated ( took a year) and then received a refund with hefty interest paid by the IRS. Along the way their support line was helpful in getting some questions answered.
- FireBeyond 14y ago
  At the risk of seeming flippant, but if you can afford to pay a six figure mistake just "so my wife wouldn't stress", then she probably really didn't have too much to stress about, financial burden of penalties or otherwise.

anigbrowl 14y ago

Rubbish. I made a $250 mistake on my tax return a few years ago and they just wrote me a nice letter about it. The only penalty I paid was some tiny dollar amount of interest. I don't dispute that people can have bad experiences with the IRS but they're not going to drop the hammer on you over a math error.