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IRS Notice: 2019 1040SR Amt Due $25,656!!!
Old 02-22-2021, 02:53 PM   #1
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IRS Notice: 2019 1040SR Amt Due $25,656!!!

Got notice in the mail today, heart skipped a bunch of beats for a couple seconds. Didn't show it to DW.

After I reviewed our 2019 return and amendment, and calmed down, after 45 minutes (mostly on hold) with an IRS Agent and her Supv, I don't owe anything! Supv said I'm showing a ZERO balance for you effective 3/1 (in the future?). Without getting snippy with an IRS Supv, I said 'that's good to know, I was a little alarmed to get notice that I owed an additional $25K including $1400+ in penalties/interest!!!'

I had to file an amended return in 2019. Just a couple weeks ago they asked for a new 1040X with Part III filled out (just a written reason for amendment) which I provided on 2/9. She said the notice was computer generated automatically while the IRS was still processing my 2/9 documentation...and it was already resolved at ZERO balance. It appears the notice was generated without including any of our 2019 estimated payments.

Sheeeeeesh!
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Old 02-22-2021, 03:00 PM   #2
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The IRS is broken.

For the first time ever I recently got notice of failing to file for a trust I manage. I sent them a copy of the certified postage as well as duplicate copies of the returns and said "See! I filed!"
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Old 02-22-2021, 03:25 PM   #3
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Originally Posted by twaddle View Post
The IRS is broken.

For the first time ever I recently got notice of failing to file for a trust I manage. I sent them a copy of the certified postage as well as duplicate copies of the returns and said "See! I filed!"
I had a similar notice two years after I filed a Final Return for a SOLO 401K. Re sent the tax return (3 times now) and they still can't find it after I got my return receipt back for each sending. Last week, I spoke with a rep and he said to FAX it in, not to mail it again.

They are apparently buried in paper from one year of working from home. Unbelievable mess and this is still unresolved after 3 years now.
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Old 02-22-2021, 03:27 PM   #4
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I agree that it seems Covid has truly broken the IRS. Personally, I think they should have shut down all computer-generated letters from being sent. All penalties and interest accumulation should have been stopped. Start things back up on January 1, 2022. They are causing themselves more issues than they can handle at this point.
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Old 02-22-2021, 03:34 PM   #5
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I guess the lesson is to hang on to your paper records for a while. I slapped myself on the back when I had to pull out that certified mail receipt.
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Old 02-22-2021, 03:39 PM   #6
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I guess the lesson is to hang on to your paper records for a while. I slapped myself on the back when I had to pull out that certified mail receipt.
Way to go.....

I have a box of receipt envelopes going back years..... I shred the really old ones now and then.
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Old 02-22-2021, 03:39 PM   #7
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I guess the lesson is to hang on to your paper records for a while. I slapped myself on the back when I had to pull out that certified mail receipt.
I did the same. I always save them after running a Sub S corp for 18 years. Remember, you are guilty until proven innocent in the eyes of the IRS.
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Old 02-22-2021, 04:25 PM   #8
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The other thing I was glad about, I’ve been using EFTPS for all estimated tax payments since 2019. Didn’t need it after all, but it was nice to have a record with acknowledgment that we paid and it was “settled.” I do feel a little sorry for the IRS, Covid had to be a setback, I’ll bet the agents are pretty stressed and don’t get to come up for air very often.
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Old 02-22-2021, 04:32 PM   #9
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Ahh the memories! 1984. Computer glitches. IRS said I owed 12k. After numerous back and forth, several computer print outs. Per a humans(at the IRS) I refiled 1984 with brand new W-2 from 'da plant' and stapled the form that said 'do not staple' about 15 times as suggested and sent it to address directed.


Got a 7k refund check plus some interest.

Heh heh heh - And a little note saying the interest was taxable.
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Old 02-22-2021, 04:36 PM   #10
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The other thing I was glad about, Iíve been using EFTPS for all estimated tax payments since 2019. Didnít need it after all, but it was nice to have a record with acknowledgment that we paid and it was ďsettled.Ē I do feel a little sorry for the IRS, Covid had to be a setback, Iíll bet the agents are pretty stressed and donít get to come up for air very often.
Good reminder. I need to get on EFTPS. Sending these checks during these unreliable mail days seems risky, and you never get a confirmation.
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Old 02-22-2021, 05:17 PM   #11
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Certified mail is the way to go...had to pay a late filing penalty one year when I skipped that (has mailed in the return about a week before the deadline)
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Old 02-22-2021, 05:43 PM   #12
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Good reminder. I need to get on EFTPS. Sending these checks during these unreliable mail days seems risky, and you never get a confirmation.
I have been using EFTPS for a number of years, and the CA equivalent. Easy Peasy
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Old 02-22-2021, 08:44 PM   #13
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Well 2021 has been your IRS year so far, hasn’t it! Fingers crossed that that is the last of it!
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Old 02-23-2021, 08:46 AM   #14
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I have been using EFTPS for a number of years, and the CA equivalent. Easy Peasy
I enrolled.

My state (NC) options don't look too good, basically you have to enter bank data each time, unless you sign up with a tax provider to do it for you ($$$).

If anyone in NC knows differently, let me know.
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Old 02-23-2021, 09:39 AM   #15
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I just go the $0.49 route (or whatever a 1st class stamp is nowadays) if I'm mailing a check. I scan the envelope and contents, and use the cancelled check image from my bank to prove they got it. If I have a refund coming, I blow the dough and print a label out of PayPal ($2.75) that includes tracking.
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Old 02-23-2021, 10:25 AM   #16
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I agree that it seems Covid has truly broken the IRS. Personally, I think they should have shut down all computer-generated letters from being sent. All penalties and interest accumulation should have been stopped. Start things back up on January 1, 2022. They are causing themselves more issues than they can handle at this point.
I agree with this 100%. Not only the IRS, but many government agencies are truly a flaming dumpster fire now. My wife is renewing her green card with US Immigration - what a disaster. Used to take 4-6 months, and is now taking up to 2 years, yet the extension only lasts 12 months.

DMVs here are backed up worse than a toilet at a Mexican buffet. Take months to get any title work done.

They should have stopped. Use the next 6 month to re-organize, streamline, and re-group. Take a short term hit and come back strong. Focus on the 20% that'll generate 80% of the results. This is going to take years to fix and cause endless headaches in the meantime.

Needless to say, I'm filing an extension for this year.
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Old 02-23-2021, 10:44 AM   #17
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Here is my 2020 IRS story:

(I haven't received a Refund" for over 10 years -- have been pretty accurate on deposits.) Assuming I would owe a $100 or so, I didn't file the 2019 1040 (by mail) until June 14th. (Big surprise! the refund on Line 21a was $2,644 -- see below.) On September 14th, they told me they received it. On November 17th, they sent me, by mail, a notice that said, “We received your Dec 31,2019 Federal Individual Income Tax Return, but we need more information to process the return accurately. (The Form 8996 is incomplete or missing from your return.) I couldn’t find what they meant so I simply re-mailed (the next day) exactly everything I had originally sent.

On February 10th (this year), I was informed they approved the refund (no explanation). On February 16, 2021, I received a check in the mail for $2,659.02 (see above).

Four days later, I and DW each received a letter informing us that the "rules" prevent automatic deposits for previous years refunds but I should expect the check in the next 21 days.

Okay, alls well that ends well? Well, not so fast...

This year, we had no income other than SS -- thanks to lack of RMD. So, on Feb 16, 2021, I used one of the online services (https://www.freetaxusa.com/). I would receive a refund of the $1,200 stimulus we didn't get. So sent the tax return. The next day, I am informed that my return was not accepted.

Apparently, one of the "security" questions required to prove who you are is the amount of your previous year's AGI. Sure enough, I checked and it matched. But assumed because they had changed my expected refund they had also changed the AGI in some way. Since I had no way to get that information, I asked the tax return help desk how to proceed. They told me that if I had mailed the 2019 1040 (I had) the answer would be "zero." Yep, that worked, they (the IRS) accepted my 1040.

Very efficient bunch of people.
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Old 02-23-2021, 11:47 AM   #18
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Just an FYI from when I did taxes many years ago... probably have not changed..



The IRS will always take the most advantageous position to them to preserve their ability to get maximum money even if they KNOW that you do not owe that...
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Old 02-23-2021, 12:30 PM   #19
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Just an FYI from when I did taxes many years ago... probably have not changed..

The IRS will always take the most advantageous position to them to preserve their ability to get maximum money even if they KNOW that you do not owe that...
Back in the old NQ Stock Option days people would do same day sales. In the end, it comes out as cash. Behind the scenes is perhaps a huge stock sale (10,000 shares of XYZ for $11, with a basis of $10 gives you $10,000. Congrats!) This $10k ends up on the W-2. So people thought they were done.

They were not done. There still was a sale of $110,000. So the IRS would see this, and assume a basis of ZERO and send a bill for the missing $110,000 gain.

Oh yeah, to their advantage. I had more than one co-worker stain their pants when they got that letter. It got so bad that when we had new people, we'd set aside time in a department meeting to help them understand how NQSOs work.
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Old 02-23-2021, 12:37 PM   #20
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DMVs here are backed up worse than a toilet at a Mexican buffet. Take months to get any title work done.
NC has been issuing licenses without road tests to try to burn through the backlog. Isn't that great!?

Today they announced they are going to be giving those extra-provisional young drivers a "road test" with the examiner watching from afar while they do stuff in a large parking lot. Yeah, our drivers will be 3-pt turn approved!

Hey, at least they are trying to get through the backlog. I applaud this. Many other businesses have had to adapt and do some odd things.

But overall, the govt. is inflexible, and I get worried when people want to add more things to the list That Government Does.
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