Tax Question

[KennF]

A year later and I'm still tussling with them about a failure to file penalty for 2015. I filed on extension and the return didn't arrive until a week after the extension expired. Their response to my sending them a copy of the certified mail receipt showing it was mailed on time has been another bill. Grrr.

 

We're talking about $79 but since I'm not billing myself for my time, so far it's only involved the cost of stamps and paper on which to print and copy correspondence. Still worth it to me.

 

Personally, I would pay and close the file.

Paying : The amount is relatively negligible and the consequences of paying (aside from the money) are inconsequential.

Not Paying : Your returns are not final/closed (the statute of limitations clock is held during the dispute). Interest on taxes and/or any additional penalties still accrue.

[+ quoththeraven]

Personally, I would pay and close the file.

Paying : The amount is relatively negligible and the consequences of paying (aside from the money) are inconsequential.

Not Paying : Your returns are not final/closed (the statute of limitations clock is held during the dispute). Interest on taxes and/or any additional penalties still accrue.

I was a lawyer for the IRS earlier in my career, so I am aware of all that.

 

The statute of limitations is running. The return was filed, which starts the statute of limitations. The IRS doesn't think it was filed within the relevant period (October 17, 2016 because it was on extension and October 15, 2016 was a Saturday) and is dinging me for the penalty from April 15, 2016 to October 24, 2016, when the return was received, plus the negligible amount of interest on the penalty from then until now.

 

The taxes owed and interest on that has already been paid. All we're arguing about now is the failure to timely file penalty.

 

Also, I don't have the money. I have about that amount right now in my checking account to last me until the end of the month other than for food, which is otherwise covered.

 

The cost/benefit analysis still comes out in my favor. I don't owe the money, dammit. And good luck collecting it from me. There's nothing to collect it from.

[KennF]

I was a lawyer for the IRS earlier in my career, so I am aware of all that.

 

The statute of limitations is running. The return was filed, which starts the statute of limitations. The IRS doesn't think it was filed within the relevant period (October 17, 2016 because it was on extension and October 15, 2016 was a Saturday) and is dinging me for the penalty from April 15, 2016 to October 24, 2016, when the return was received, plus the negligible amount of interest on the penalty from then until now.

 

The taxes owed and interest on that has already been paid. All we're arguing about now is the failure to timely file penalty.

 

Also, I don't have the money. I have about that amount right now in my checking account to last me until the end of the month other than for food, which is otherwise covered.

 

The cost/benefit analysis still comes out in my favor. I don't owe the money, dammit. And good luck collecting it from me. There's nothing to collect it from.

 

To each their own.

 

I watched this play out a few times myself. I accept you don't owe it and shouldn't have to pay it. I've also seen them start the snowball effect and hold up future refunds, delay contract payments, and a host of other collection tools. Most wouldn't be effective on you or that dollar amount.

 

I've even worked with a client with the exact situation. The IRS agent reviewing the case said "How do I know that your return was actually in that piece of mail?"

 

We both, probably, know that in the end, you'll most likely win. The aggravation wouldn't be worth it to me.

[+ WmClarke]

To each their own.

 

I watched this play out a few times myself. I accept you don't owe it and shouldn't have to pay it. I've also seen them start the snowball effect and hold up future refunds, delay contract payments, and a host of other collection tools. Most wouldn't be effective on you or that dollar amount.

 

I've even worked with a client with the exact situation. The IRS agent reviewing the case said "How do I know that your return was actually in that piece of mail?"

 

We both, probably, know that in the end, you'll most likely win. The aggravation wouldn't be worth it to me.

Get the certified mail stuff from the post office, write the certified mail # on the top of the return, snap a pic for yourself, and send the return in using that certified mail paperwork.

 

If you still use paper.

 

I file electronically so I do not know how that would work with an extension.

[amused1]

E-filed returns are time stamped at the time of acceptance by the IRS servers. How your software notifies you of this varies buy product. My software does a handshake communication with the MFS server every time I transmit a return stating accepted or rejected. During peak transmission times it can be a slow process.

[coriolis888]

I was a lawyer for the IRS earlier in my career, so I am aware of all that.

 

The statute of limitations is running. The return was filed, which starts the statute of limitations. The IRS doesn't think it was filed within the relevant period (October 17, 2016 because it was on extension and October 15, 2016 was a Saturday) and is dinging me for the penalty from April 15, 2016 to October 24, 2016, when the return was received, plus the negligible amount of interest on the penalty from then until now.

 

The taxes owed and interest on that has already been paid. All we're arguing about now is the failure to timely file penalty.

 

Also, I don't have the money. I have about that amount right now in my checking account to last me until the end of the month other than for food, which is otherwise covered.

 

The cost/benefit analysis still comes out in my favor. I don't owe the money, dammit. And good luck collecting it from me. There's nothing to collect it from.

 

 

Since you said the penalty amount is important to you, check out this link to the IRS Ombudsman:

 

https://taxpayeradvocate.irs.gov/contact-us

 

If you do not have a prior history of filing late and if you prepare a written statement to the ombudsman office stating that you timely mailed the tax return (even though the post office took a while for your return to get to the IRS) I suspect that you will get the penalty cancelled, if you ask nicely.

 

Good luck