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Is there a threshold that your interest account has to pass before the IRS will take more drastic action?
by yters 18y ago
Is there a threshold that your interest account has to pass before the IRS will take more drastic action?
- taxdodge 18y agoI've forgotten the details. At the time I was panicked so I did a lot of research on the subject. I vaguely remember that there is an upper limit to the amount of interest they can charge.
- sokoloff 18y agoI fell behind in filing by a couple of years back when I was doing a lot of daytrading, and because of the way the IRS gets its data feed of stock sales, but not associated cost basis, they were sending me bills for literally 7 figures of overdue taxes. (I'd done about $6mm of stock sales that year, naturally with a cost basis of somewhere pretty close to that $6mm.) They see $6mm in sales, treat it all as capital gains, compute the tax I owed on it (and obviously hadn't remitted), stacked up huge penalties and failure to timely file fees, etc. When I finally got around to filing the correct information (you have 3 years from the original due date of the return to file to claim a refund), they took the updated schedule D information, and cleared the account. In the 18+ months that they were sending me notices for over a million bucks, they never took any further action. So, I don't think it's a dollar threshold, but rather a time threshold at which point they start attaching wages, subjecting you to backup withholding, etc. Also, the stress totally isn't worth it.