First, the background story with my 2009 return. I worked for two Boston Scientific locations in 2008 and should have received two W2s. Without knowing it at the time, I filed my taxes with only one W2, representing only half a year's earned income. When I realized my mistake, I filed an extension (it was close to April 15th) and ultimately filed a correction form (1040X). By the time I sent in the correction, I had already received a monetary return through direct deposit for the erroneous amount I claimed on the form. Because of this, I sent in a check with the 1040X for the money I owed back to the IRS (based on what they should have originally owed me had I filed my taxes properly). The check was deposited by the Fed, and I never heard another thing.... until late April this year...
I was notified of the Examination Process via a package in the mail. Here's a sampling of what was in the package:
1) First they inform me I owe the Fed $10,000.
2) Then, I have to choose an option (clearly, option 3 wins).
3) And finally, they provided me with the errors they've identified with my return.
Upon hearing this news, I wasn't so shocked, but irritated (naturally). Right off the bat there were logical issues with their corrections. For example, they claimed to have records of additional income I made during the 2008 year, but no records of the additional withholding from that income!
I dug around my records a bit and called the IRS. I explained exactly what happened that year (similar to what I've written here) to the agent on the phone, and she said there were no additional records on file for my return that year. Only the first return was showing in their system, no 1040X and no additional payment. With this information, and after some communication with my bank, I put together the following response for the IRS. I did it in a three part manner which the IRS would be familiar with:
I sent this letter a little over a month after receiving notification of the Examination (a couple days late of course) and heard nothing for a while. But then in the middle of July, I received this note:
2) Then, I have to choose an option (clearly, option 3 wins).
3) And finally, they provided me with the errors they've identified with my return.
Upon hearing this news, I wasn't so shocked, but irritated (naturally). Right off the bat there were logical issues with their corrections. For example, they claimed to have records of additional income I made during the 2008 year, but no records of the additional withholding from that income!
I dug around my records a bit and called the IRS. I explained exactly what happened that year (similar to what I've written here) to the agent on the phone, and she said there were no additional records on file for my return that year. Only the first return was showing in their system, no 1040X and no additional payment. With this information, and after some communication with my bank, I put together the following response for the IRS. I did it in a three part manner which the IRS would be familiar with:
1) First I told them I don't owe $10,000.
2) Then I explained why I will not be paying them any more money.
3) And finally, I provided them with the errors I identified with their Examination.
3) And finally, I provided them with the errors I identified with their Examination.
Here's the letter:
I sent this letter a little over a month after receiving notification of the Examination (a couple days late of course) and heard nothing for a while. But then in the middle of July, I received this note:
I wonder why the IRS didn't answer any of my concerns? I was really hoping for an opportunity to get answers and information flowing the other way. I played nicely with them, why can't the IRS return the favor? After all, they work for - and because of - us.
I'll quit while I'm ahead, but have half a mind to respond to this letter saying the issue remains open from my side. What if I had sent in a payment without arguing the Examination? Luckily I had the presence of mind and resources to pull all the information together. Others may not have been so lucky. If the amount they expected me to pay was like $100, I may have just written a check to be done with it. If the government needs to collect such a staggering portion of my income, they must keep track of it better.
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