I filed client return 3/31/10. He was 1st time home buyer. All documentation was sent. IRS sent ltr after ltr after ltr asking for more and more info. I sent ltr after ltr (certified return receipt) responding to each of their ltrs. This is 1st time in some 15 yrs that I felt IRS was jacking my client around. They loose stuff so we have to resend. That's ridiculous. (in my opinion.) Client finally received $8k check last week. But no interest. Isn't IRS suppose to include interest when they keep the $ past return extension due date? I'm confused.
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I had two that they yanked around for months and they both received their checks this week. Both did receive about $200+ in interest."The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith -
thanks John,
did the original $8k check include the interest or did a separate come later. Sandy emailed me she thought a separate ck may come later.
LarryComment
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In these two cases, the check included the interest. But maybe they're not handling the all the same. I think IRS is required by their own rules to pay interest after a certain amount of time. Both were FTHB credits; one was a 2009 purchase and the other was a 2010 purchase."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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Taxpayer Advocate
You might want to contact the taxpayer advocate in your state. I attended a 2-day tax institute seminar recently and they had representatives from the IRS Taxpayer Advocate service in attendence.
They brought up several issues that are on their radar, although this wasn't one of them. If enough taxpayers/tax preparers gripe about particular issues, it raises a red flag for them as a systemic issue.
Good luck!
MoComment
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thanks
John, Mo, thank you for your responses. I really do appreciate your advice.
LarryComment
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My reaction is that whether or not the IRS pays interest should depend upon exactly when 100% all of the proper documentation can be shown to have been provided. In any event, at today's recent low interest rates, the interest amounts only to maybe about $200 or less based upon an $8000 principal amount. If it were my client, I would make the case requesting the interest payment from the original office and only then if necessary go to the Taxpayer Advocates on the allegation that it is probably a systemic problem.Originally posted by Larry M View PostComment
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I'm pretty sure interest begins to accrue 45 days after the amended return is filed, even if IRS asks for additional info to support the claim. But that is an interesting twist - maybe they have a way to forego paying the interest if (in their judgement) there was not sufficient info accompanying the original filing."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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update
I JUST talked to the client and he did receive an additional amount of "two hundred something dollars". And then I just found out his mom passed away. He's had a such a bad year and he and wife are such nice people. Even tho the language transition from Asian to English is difficult for me to understand, I wish I had more clients like them!
Thanks again.
LarryComment
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