Client gets a CP-2000 letter for failing to report a 1099-R in 2005. Seems they forgot to show it to me as they thought an inheritance would not be taxable.
Anyway, I straighten them out on some rules and they agree to pay the additional tax…plus interest….plus penalty.
The guy calls IRS today as he is having trouble rounding up enough dough to pay the tax and wonders if he can get a 30 day extension on the due date listed on the CP-2000. IRS phone guy #1 says, why not just say you disagree with the CP-2000, write on their see Amended Tax Return, and then file an amended return reporting the additional income. You will still owe the tax plus penalties, but IRS does not charge interest on the amended return.
He calls me and asks me if that’s true. I said that’s a new one to me. IRS instructions for 1040X, lines 20 and 21 say they will bill you for interest due.
I tell him to call IRS back and see if he gets a new person on the phone. Don’t tell them what the other idiot already said, just see what the second guy says.
He calls back and says IRS phone guy #2 just laughed. Not only would he still owe interest, but it would be more as it would simply delay paying the bill.
Moral of story…never except the first answer IRS tells you over the phone…always call back for a second…maybe a third…maybe even a fourth opinion. Then always call your local tax professional to confirm whether you finally got a correct answer.
Anyway, I straighten them out on some rules and they agree to pay the additional tax…plus interest….plus penalty.
The guy calls IRS today as he is having trouble rounding up enough dough to pay the tax and wonders if he can get a 30 day extension on the due date listed on the CP-2000. IRS phone guy #1 says, why not just say you disagree with the CP-2000, write on their see Amended Tax Return, and then file an amended return reporting the additional income. You will still owe the tax plus penalties, but IRS does not charge interest on the amended return.
He calls me and asks me if that’s true. I said that’s a new one to me. IRS instructions for 1040X, lines 20 and 21 say they will bill you for interest due.
I tell him to call IRS back and see if he gets a new person on the phone. Don’t tell them what the other idiot already said, just see what the second guy says.
He calls back and says IRS phone guy #2 just laughed. Not only would he still owe interest, but it would be more as it would simply delay paying the bill.
Moral of story…never except the first answer IRS tells you over the phone…always call back for a second…maybe a third…maybe even a fourth opinion. Then always call your local tax professional to confirm whether you finally got a correct answer.
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