WWYD - Taxes Edition

[ny96]

H and I received a letter from the IRS in February stating that we owed $1500 for a miscalculation on our child tax credit in 2022. They are saying our credit is only $2500 even though we have two children and fall under the income guidelines to take the full $4000 credit. I’ve sent all the documentation and appealed the first letter and subsequent letters and will fight this one.

I received a second letter about a week after the first stating that I hadn’t paid the penalty for a Roth overpayment. I have paid that and sent proof of that too, but it’s a bit murkier because it was lumped in with a couple other tax payments and the IRS calculations that I saw from the paperwork online show that there was another miscalculation on their part (it’s an unexplainable whole thing). Bottom line is that that is $216 plus penalties and they are threatening a lien. I could keep fighting it, but I’m thinking of just paying it to not have that looming over my head.

What would you do?

[ny96]

Also, I’m having a disagreement with H. He believes that the best and only way we should be filing taxes is by certified mail. I think that when we do our taxes through tax we should be filing online. First off, we’re owed a state refund and the tax board site says that if you filed by mail wait 90 days before you submit an inquiry. Secondly, my FIL pointed out that the IRS relies on Turbo Tax for correct calculations and I believe that if we would have filed electronically they wouldn’t be questioning our taxes, even though we mailed a Turbo Tax printout.

[orval]

I had an issue with a payment for business taxes which they said were late, but I had the certified mail receipt with the date they were mailed, payment receipt, etc. They threatened a lien, so I paid it. But I also continued to fight it with all of my documentation. It took a year but I got my $200 back.
So I would try the pay it, but keep fighting approach.

[quesyrah]

I’m with you on filing electronically.

I would be so so irritated about this. I would pay it to avoid the lien and get them off your backs and then keep fighting them to get it back.

I’m surprised they are going after you so hard for such small amount.

[plutosmoon]

My sister kept getting increasingly threatening IRS letters regarding incorrect tax payments. The bill was for $0, the IRS claimed she owed AMT, it was baffling, she didn't have enough income for AMT, so she sent AMT paperwork in to dispute it, that didn't work. Ultimately, they notified her they were placing a tax lien.

The only way she was able to resolve it after months of back and forth letters was a call. The rep kept insisting she pay her balance due, until she finally asked them, so to be clear I should send you a check for $0.00. He transferred her to someone else who was able to actually look at the paperwork, stop the lien and resolve the "balance".

I had a tax issue with the state of Vermont and was only able to get a final answer by calling after sending in a bunch of paperwork. Sometimes, you have to poke people with a call.

I would call them and make sure they know you are disputing the amount, I would not pay it until you have a resolution.

The IRS is pretty clear about preferring e-file.

[ny96]

May 13, 2024 14:00:45 GMT -5 plutosmoon said:

My sister kept getting increasingly threatening IRS letters regarding incorrect tax payments. The bill was for $0, the IRS claimed she owed AMT, it was baffling, she didn't have enough income for AMT, so she sent AMT paperwork in to dispute it, that didn't work. Ultimately, they notified her they were placing a tax lien.

The only way she was able to resolve it after months of back and forth letters was a call. The rep kept insisting she pay her balance due, until she finally asked them, so to be clear I should send you a check for $0.00. He transferred her to someone else who was able to actually look at the paperwork, stop the lien and resolve the "balance".

I had a tax issue with the state of Vermont and was only able to get a final answer by calling after sending in a bunch of paperwork. Sometimes, you have to poke people with a call.

I would call them and make sure they know you are disputing the amount, I would not pay it until you have a resolution.

The IRS is pretty clear about preferring e-file.

I’ve called several times and spent hours on the phone. No one can tell me why there is an issue beyond what’s on the paperwork. One agent in the investigations department told me they likely don’t have the paperwork for the children on file. I sent that in, and now they’re saying that that wasn’t the problem, but no one knows what is the problem.

[Yankees21]

May 13, 2024 12:44:36 GMT -5 ny96 said:

H and I received a letter from the IRS in February stating that we owed $1500 for a miscalculation on our child tax credit in 2022. They are saying our credit is only $2500 even though we have two children and fall under the income guidelines to take the full $4000 credit. I’ve sent all the documentation and appealed the first letter and subsequent letters and will fight this one.

I received a second letter about a week after the first stating that I hadn’t paid the penalty for a Roth overpayment. I have paid that and sent proof of that too, but it’s a bit murkier because it was lumped in with a couple other tax payments and the IRS calculations that I saw from the paperwork online show that there was another miscalculation on their part (it’s an unexplainable whole thing). Bottom line is that that is $216 plus penalties and they are threatening a lien. I could keep fighting it, but I’m thinking of just paying it to not have that looming over my head.

What would you do?

How old are the kids?

[ellipses84]

If $200-ish is the total you’ll have to pay OOP to be done with this, I would probably do that. I agree it’s best to file via TurboTax. Do whatever tax package you bought with them come with any kind of support, like helpline or audit support?

[ny96]

Update: we got a letter yesterday that they had received the additional documents I sent and adjusted our amount owed to the one on our original return.

[jwright]

Glad to see your update.

I was going to say if you have time you can call the IRS and it may be solvable over the phone, or ask for an administrative hold on your account to account for the time it takes for information to be processed (they usually do it for 30 days or 60 days).

Agree with e-file. If you go to a paid preparer who prepares more than 10 returns, they are required to efile by the IRS (unless a rare exception is met). You can use the e-file confirmation as proof of the date of filing and receipt.

[ny96]

May 22, 2024 15:35:48 GMT -5 jwright said:

Glad to see your update.

I was going to say if you have time you can call the IRS and it may be solvable over the phone, or ask for an administrative hold on your account to account for the time it takes for information to be processed (they usually do it for 30 days or 60 days).

Agree with e-file. If you go to a paid preparer who prepares more than 10 returns, they are required to efile by the IRS (unless a rare exception is met). You can use the e-file confirmation as proof of the date of filing and receipt.

I spent so many hours on the phone with the IRS in different departments trying to clear this up, no one knew anything, but most of them were extremely nice.