Is anyone had experienced the IRS servise like me?

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VFK57

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In Jan 2022 DW and I decided to invest in California Pistachio and Almonds Farm (Ranch#10). We read a great presentation about the world growing demand on that products and projected returns were extremely attractive. However, in Jan 2023 there was a huge loss within 1 year of operation. The Form K1 was delayed to June 2023, so I did amendment (Form 1040X) with explanation about the delay and mailed by certified mail to the IRS and Franchise Tax Board. The CA returned the money within 3 days after receipt of Form 540X but the IRS cannot repay $6,534 for over 7 months now. I filed complains about the IRS, but the reply was yesterday that there will be $173 interest what I still had not received.
Are we in so bad crises that the IRS keeps such small amounts they must return?
 
One of the issues?
 

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In Jan 2022 DW and I decided to invest in California Pistachio and Almonds Farm (Ranch#10). We read a great presentation about the world growing demand on that products and projected returns were extremely attractive. However, in Jan 2023 there was a huge loss within 1 year of operation. The Form K1 was delayed to June 2023, so I did amendment (Form 1040X) with explanation about the delay and mailed by certified mail to the IRS and Franchise Tax Board. The CA returned the money within 3 days after receipt of Form 540X but the IRS cannot repay $6,534 for over 7 months now. I filed complains about the IRS, but the reply was yesterday that there will be $173 interest what I still had not received.
Are we in so bad crises that the IRS keeps such small amounts they must return?
paper returns take a long time to get processed. This has been an ongoing issue.

I always recommend e-file unless there is no alternative. In the last couple of years it became possible to e-file amended returns in some cases - although it could depend on what software one uses.

I have e-filed amendments using TaxSlayer Pro Online for a number of TaxAide clients in the last year or so.
 
The IRS has a computer system that is woefully out of date and they have been underfunded for many years. I'm surprised they aren't far worse and even slower to respond than they actually are.

IRS tech is so ‘archaic’ the agency struggles to find people to work it

I would disagree that they are underfunded from an IT standpoint:

Money for modernization apparently isn’t the problem. The IRS reported spending almost $7 billion on IT in fiscal 2021 and 2022 combined, according to GAO.
I was part of IT modernization projects for Megacorp clients, and the costs were nowhere near those amounts.

I would also disagree with the article's comment on COBOL being an "osbolete" language. It has survived while many others invented around the same time have not, because.. it just works.

Here is an interesting counterpoint regarding the COBOL issue:
https://www.govtech.com/opinion/an-apology-to-cobol-maybe-old-technology-isnt-the-real-problem.html

There is a serious issue with retiring talent, but again, it’s not unique to COBOL. The issue is institutional knowledge — when the people who wrote an application 20 years ago leave, the remaining people often don’t know the application with anything close to the same intimacy. And since the time they first wrote the program, often it has metastasized — grown new functions, filled new use cases, entered new agencies. So it’s a lot bigger and more complex, and the people who understood it all just walked out the door.

“The developer that understands a programming language, if they’re dealing with a very small amount of code, they can fix the problem and they can fix it pretty easily,” said Brothers, whose firm works on this exact problem. “The problem is when you’re dealing with millions of lines of code and nobody even knows where to start looking.”
 
Whatever the reason, it appears the IRS is in sad shape and in serious need of tech modernization.

From another WaPo article

...paper tax returns aren’t scanned into computers; instead, IRS employees manually keystroke the numbers from each document into the system, digit by digit.

No wonder paper returns take forever to process.
 
In Jan 2022 DW and I decided to invest in California Pistachio and Almonds Farm (Ranch#10). We read a great presentation about the world growing demand on that products and projected returns were extremely attractive. However, in Jan 2023 there was a huge loss within 1 year of operation. The Form K1 was delayed to June 2023, so I did amendment (Form 1040X) with explanation about the delay and mailed by certified mail to the IRS and Franchise Tax Board. The CA returned the money within 3 days after receipt of Form 540X but the IRS cannot repay $6,534 for over 7 months now. I filed complains about the IRS, but the reply was yesterday that there will be $173 interest what I still had not received.
Are we in so bad crises that the IRS keeps such small amounts they must return?

If you are receiving a Form K1 you are dealing with an S Corporation. S Corporations have flow-through income (or losses) to shareholders. This means shareholders report any income/loss on their personal tax returns by including the copy of Form K1 with their personal tax returns. Thus, S Corps almost always have a fiscal year ending December 31st. S Corporations are supposed to mail out Form K1 by March 15th.

If not December 31, when does this pistachio company's S corp. fiscal year end?

I'm wondering why a "huge loss" in January 2023 could possibly cause you to file an amended return? You would report anything that happened in January 2023 on your 2023 personal taxes which are not due until April 15, 2024.

I suspect that CA (do you mean the state of California?) returned the money within 3 days because it was applied to the incorrect tax year.

As to the IRS, if there was reply from them they must have sent you a notice in the mail. There should be instructions on how to contact the IRS and resolve the issue on that notice. I advise you telephone them.

I've had good luck contacting the IRS by phone in the middle of the week, Wednesday or Thursday, as early in the morning as possible. Have a notebook ready to take notes. Ask open ended questions as to the situation with your taxes and the money you sent in. Believe it or not, the IRS is not that difficult to deal with, not like the stereotypes you see on TV and in the movies (at least not in my experience.)

Good luck.
 
The IRS has a computer system that is woefully out of date and they have been underfunded for many years. I'm surprised they aren't far worse and even slower to respond than they actually are.

IRS tech is so ‘archaic’ the agency struggles to find people to work it

I agree. The $7B mentioned in the article is really quite small compared with how much is spent in the US business world.

Like other government spending, capital investment is treated the same as operational expense, which discourages new investment.
 
paper returns take a long time to get processed. This has been an ongoing issue.

I always recommend e-file unless there is no alternative. In the last couple of years it became possible to e-file amended returns in some cases - although it could depend on what software one uses.

I have e-filed amendments using TaxSlayer Pro Online for a number of TaxAide clients in the last year or so.
The TurboTax Premier, I use for Taxes, allows only one Filing over electronic transfer and I am sure it is not delayed so long because of mail. In 1993 I was looking for a better pay as HVAC Tech and got 2 offers. One is local county job for the office of education, the other for manufacturing of Hard Drive disks. The Government job was for a big office building with excellent benefits and the very minimal job load - Office building is much easier vs Manufacturing in my profession and I was shocked that Facility crew was 4 persons with a 5th working supervisor. You could read books or doing whatever with 5 people crew there was no work load. In manufacturing bldg I ended up because much higher compensation, the job was way harder as it added CDA, vacuum pumps, scrubbers, waste treatment equipment, lighting, various gases supply pipes, pumps etc, 24/7 production vs 8h in office and all it for 2 persons: working supervisor - electrician and HVAC tech to cover. I am sure the IRS accountants is very same like in County job. DW also had very similar experience as a Payroll Manager.
 
I'm having a hard time understanding what you did. Did you deliberately file an incomplete return not including the K1 and then amended this incomplete return? Or did you never file an original return (and requested an extension)? Or was the K1 a corrected K1? Any of these situations could easily delay the processing of an amended return.


In 2022 I had a computer generated desk audit concerning failure to report 1099Q income. It too about six months for the IRS to conclude that I was correct and did not owe anything.
 
I'm having a hard time understanding what you did. Did you deliberately file an incomplete return not including the K1 and then amended this incomplete return? Or did you never file an original return (and requested an extension)? Or was the K1 a corrected K1? Any of these situations could easily delay the processing of an amended return.


In 2022 I had a computer generated desk audit concerning failure to report 1099Q income. It too about six months for the IRS to conclude that I was correct and did not owe anything.
The K1 report for the loss was mailed in yearly June 2022 vs before April 17, 2022. That why I needed to make amendment Form 1040X and file it by mail in early June 2022.
 
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The K1 report for the loss was mailed in yearly June 2023 vs before April 17, 2023. That why I needed to make amendment Form 1040X and file it by mail in early June 2023.

OK, so the activity reported on the K1 was for calendar tax year 2022.

So what does a huge loss in January 2023 have to do with tax year 2022?
 
The K1 report for the loss was mailed in yearly June 2022 vs before April 17, 2022. That why I needed to make amendment Form 1040X and file it by mail in early June 2022.

So you filed an incomplete return in April 2022 and then amended in June 2022:confused: Not generally a good idea!

Did including the K1 loss on your amended return result in your taxable income to be negative? You may have a Net Operating Loss (NOL) Did you file a form 1045? I only have a passing knowledge of NOLs , did you elect to have the loss carried back for two years or did you elect to have the loss carry forward? If you don't recognize these terms, you may have filed an incomplete return. If so, you likely will hear from the IRS eventuality and may need professional help in dealing with the NOL. This MAY be the reason your refund is held up. See IRS Pub 536.


Edit to add, found out thatNOL after 2021 can not be carry back, limits to carry forward implenented:

A net operating loss exists if a company’s deductions exceed taxable income.
An NOL can benefit a company by reducing taxable income in future tax years.
The Tax Cuts and Jobs Act (TCJA) made significant changes to NOL rules.
NOLs may now be carried forward indefinitely until the loss is fully recovered, but they are limited to 80% of the taxable income in any one tax period.
1
The Coronavirus Aid, Relief, and Economic Security (CARES) Act removed the restrictions on tax loss carryback for tax years 2018, 2019, and 2020.
1
Internal Revenue Service. “Publication 536 (2022), Net Operating Losses (NOLs) for Individuals, Estates, and Trusts.”

Net operating losses in 2021 or later may not be carried back and must be carried forward indefinitely.
A net operating loss exists if a company’s deductions exceed taxable income.
An NOL can benefit a company by reducing taxable income in future tax years.
The Tax Cuts and Jobs Act (TCJA) made significant changes to NOL rules.
NOLs may now be carried forward indefinitely until the loss is fully recovered, but they are limited to 80% of the taxable income in any one tax period.
1
The Coronavirus Aid, Relief, and Economic Security (CARES) Act removed the restrictions on tax loss carryback for tax years 2018, 2019, and 2020.
1
Internal Revenue Service. “Publication 536 (2022), Net Operating Losses (NOLs) for Individuals, Estates, and Trusts.”

Net operating losses in 2021 or later may not be carried back and must be carried forward indefinitely.
 
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I think the IRS just got whacked another $10B in the continuing resolution, so add another 6 months to your wait. On the upside, you are more likely to get away with tax fraud if you want to try some self-help actions.
 
I think the IRS just got whacked another $10B in the continuing resolution, so add another 6 months to your wait. On the upside, you are more likely to get away with tax fraud if you want to try some self-help actions.
+1. And clueless people will complain about IRS service even more…
 
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Be patient. My tax accountant's office made a mistake on our tax return for 2022, which I missed before signing it, assigning our entire refund to TY 2023, which was not what I was told verbally. It was a large refund due to a tax loss harvest and overpaying our ACA insurance premium in 2022. The 1040X was filed in April and I received the refund in December. And the IRS paid us over $1000 in interest. You'll probably see the money some time in the next few months. The longer it takes them, the more interest you will receive.
 
I have received late amended K1 with loss in the past, very small amount. One time I amended return and IRS letter came asking me to explain potential refund. I did but ever since then, I just ignore the amended K1's with loss. I would amend if I owe IRS some money but otherwise I cut my loss and maintain my blood pressure.
 
Originally Posted by donheff View Post
I think the IRS just got whacked another $10B in the continuing resolution, so add another 6 months to your wait. On the upside, you are more likely to get away with tax fraud if you want to try some self-help actions.
+1. And clueless people will complain about IRS service even more…

What does "clueless" have to do with it?

We aren't getting served, that's a problem. It might be IRS, or it might be funding, or a combination.

I can't control either (in any meaningful way), so I can't complain? So I'm derided as being "clueless"? What else can I do (I'm not so naive to actually think my vote will matter, though I do it regardless)?

At any rate, I blame Congress. They make the laws, and there is no reason for tax laws to be this complex. If they were simpler, the IRS could do their job well with 1/100th the staff. Complexity begets complexity, it's just out of hand.

Here's an example of waste: My return, and many, many like it, contains absolutely nothing that the IRS doesn't already get (1099-R, 1099-INT,DIV,B, and W-2 if you are employed). Yet, I have to enter all this, and if I forget something, I'll get a notice (maybe years later), and now a bunch of staff is involved, forms are filled out, returned, interest calculated and paid, all with delay and staff involved.

Well, if they had all the info, why don't they just file my taxes, send me the result, and I can sign, and/or add anything that I feel warranted (maybe I want to itemize deductions).

It could all be so more efficient. Faster computers and more staff shouldn't be the first response.

Heck, I got a form last year saying I didn't sign the paper-filed amended 1041 I did for my deceased FIL. Fortunately, I took pictures of the forms and the envelope right in my car in the post office parking lot, and then sealed the envelope, right there and then, so I knew I signed them. So it was an IRS mistake, I am 100% certain. But staff got involved, wasting everyone's time.

And earlier, there was a typo on my FILs and MILs EIN on their "final" 1041s. Semi-long story, it was the tax guys fault, but I ended up having to handle it as he was having personal issues he had to deal with. Taxes were paid, checks cashed, but not credited to the right account due to the EIN typo.

OK, not the IRS fault of course, but getting it straightened out was a nightmare. Don't tell me about staffing issues, if there was any efficiency in the IRS, it would have been handled with one email (here is the wrong EIN, here is the correct one, here's copies of the cashed checks). But no, dozens of threatening letters, dozens of phone calls, many dozens of hours on hold (only to be hung up on), more threatening letters even after it was supposedly resolved, it just goes on and on. They create their own backlog.

On the plus side, when I finally g through to an IRS person, they seemed well informed and willing to help. But the whole process is slow, and the reps didn't seem to be in any rush either, they took their time, not like they were pushing things to be able to get to the next phone call.

-ERD50
 
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In my opinion it is just mismanagement at IRS.

But as far as the immediate question, you want to extend your return and file later if missing a K-1.

On the amendment, nothing to do but wait.

I try to avoid being in a refund positions through planning. If I am overpaid I usually roll it to the next period.
 
Didn't they blow a $Billion a few years back to revamp their antiquated systems?

A billion is not much money anymore, especially when they blow it on new desk chairs, new laptops and a coffee lounge upgrade for the executives at the IRS. :LOL:
 
In my opinion it is just mismanagement at IRS.

But as far as the immediate question, you want to extend your return and file later if missing a K-1.

On the amendment, nothing to do but wait.

I try to avoid being in a refund positions through planning. If I am overpaid I usually roll it to the next period.
That is what I think I will do, since my 2 complains did not resolve anything.
 
That is what I think I will do, since my 2 complains did not resolve anything.

Normally, if a return has not been processed it isn't going to roll anywhere. It will not be applied to the subsequent year until the return is processed. And you would have to have specified that the refund would be applied to next years taxes.

As I recall, refunds issued from amended returns are paid by check. Unless they changed it recently it was not possible to even get direct deposit with a 1040X
 
I am still waiting for my 6k tax refund from 2022. Multiple notices I have sent out.
They are just idiots and don't understand my tax situation which is not typical with a grown dependent who has his own ACA insurance.
For my mom and DGF, I make sure they owe money each year.
 
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