IRS Sent me a Letter and a much bigger Refund.............

[FinanceDude]

I'm confused. I had a CPA in Nebraska where my sister lived do her tax return for 2006. He said I would be getting a refund of about $90 from federal. The estate lawyer said it's not part of the estate, and it goes to me as personal rep.

The IRS sent me a check for $3,596, along with a note that said they changed the estimated tax total on the 2006 return, and if I had any questions to call them.............

Should I assume the IRS is right??

[cute fuzzy bunny]

IMO, the IRS is *always* right.

[W2R]

I would suggest calling the CPA.

As for whether or not you should trust the IRS to be right, I think you really know the answer to that.

[FinanceDude]

Quote:

Originally Posted by Want2retire I would suggest calling the CPA. As for whether or not you should trust the IRS to be right, I think you really know the answer to that.

I plan on calling the CPA...............however, since it WASN'T ME that did the return...................

[Brat]

Ok, consider this.... maybe the CPA took a conservative approach to the return because, after all, it is his/her professional liability on the line. He took the chance that the estate would owe more, rather than less.

It could be that the IRS has made an error. After they have reviewed the return and refunded the $$$ they will have a devil of a time charging penalties if they change their mind.

'tis better to be refunded than get a demand letter for more after the estate has been resolved.

Says the Mom of a CPA..

[MooreBonds]

Quote:

Originally Posted by FinanceDude I'm confused. I had a CPA in Nebraska where my sister lived do her tax return for 2006. He said I would be getting a refund of about $90 from federal. The estate lawyer said it's not part of the estate, and it goes to me as personal rep.

While I'm certainly not well versed in estate law...if your sister ended up owing the IRS money, it would certainly come from her estate, wouldn't it? So, using that logic, if there were instead a refund that she were due, why wouldn't the refund be considered part of her estate?

Quote:

Originally Posted by FinanceDude The IRS sent me a check for $3,596, along with a note that said they changed the estimated tax total on the 2006 return, and if I had any questions to call them............. Should I assume the IRS is right??

Make triplicate copies of that letter, laminate the original, and seal it in wax in a safe deposit box.

[FinanceDude]

Quote:

Originally Posted by MooreBonds While I'm certainly not well versed in estate law...if your sister ended up owing the IRS money, it would certainly come from her estate, wouldn't it? So, using that logic, if there were instead a refund that she were due, why wouldn't the refund be considered part of her estate? Make triplicate copies of that letter, laminate the original, and seal it in wax in a safe deposit box.

Planned on it. I found out she made two estimated tax payments totalling $3900 that the CPA didn't have info on.............so maybe that's the reason..............

[Texas Proud]

Quote:

Originally Posted by FinanceDude Planned on it. I found out she made two estimated tax payments totalling $3900 that the CPA didn't have info on.............so maybe that's the reason..............

There you go.... The IRS is not in the business of changing your tax return without some good info... that is why you get an audit... now, if you had missed a 1099 or W2 they will put it down... and as you can see, if you missed the estimated tax payments they put that down also...

They don't say, wow, this guy took a conservative approach and he can get MORE back if we are aggressive... that just will never happen.. NOBODY can be more conservative than the IRS.. heck, they consider you have a zero basis in any stock sales you make... you need to come up with the amount or all proceeds are taxable...

[OAG]

From what you quoted in the IRS letter it appears there were additional ESTIMATED PAYMENTS made throughout the year that maybe you, and the CPA, were not aware of. Could your Sister or someone on her behalf had made ESTIMATED payments of which you did not or could not find a record of? Or was there a refund due on the 2005 return that was applied to taxes for 2006 (check 2005 return for this information). Or a combination of the two possibilities.

Edit: Should have read closer ALL of the responses. Guess you answered your own question 2 responses back. Now the rest of the question: Shouldn't the refund be larger? Is one for the CPA or the IRS; of course it may be that "if you cannot afford the answer, then do not ask the question".

[cute fuzzy bunny]

Quote:

Originally Posted by MooreBonds Make triplicate copies of that letter, laminate the original, and seal it in wax in a safe deposit box.

Then make certain the safe deposit box wasnt made by Sentry. Cuz I have a saw.

[tryan]

Quote:

Should I assume the IRS is right??

Learned this from my megacorp days ... "if you don't want the answer, don't ask the question."

Cash the check n'have fun.

[Martha]

Quote:

Originally Posted by FinanceDude Planned on it. I found out she made two estimated tax payments totalling $3900 that the CPA didn't have info on.............so maybe that's the reason..............

If that is the case, shouldn't the refund be even bigger?

[Mwsinron]

Id be pretty scared if the IRS sent me a bigger check that I was no expecting.