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Has anyone else dealt with blatant errors from the IRS? In the last week I've received two bill from the IRS, both are clearly incorrect...
1) My parents, brother and I are partners (4 of us) in a one bedroom condominium unit - there are 4 partners, always have been for the 17 years we have owned it. We got a $37,000 penalty notice in the mail for not electronically filing our 1065 and K-1s because they allege we have 233 members and are required to file electronically. Where this 233 number came from is a complete mystery. My dad filed everything before he died, but I have copies of all of it, nowhere is there a 233 or any type of mistake that I can find. EIN is the same one we have used year after year. Of course when you call the phone number, they say that due to covid they can't take your call and to call back another time. I wrote a letter and included lots of documentation, so hopefully that will solve it.
2) On our personal 1040, we filed an extension back in April, and I paid $11,500 as an estimate of what was due. I asked my business accountant to set up the extension for me (I do my own taxes, but was going through death of my father and had no ability to deal with filing taxes on time, so I needed an extension) and they gave me all the forms and showed me how to pay what was due. I have the confirmation number from IRS Direct Pay, the confirmation that the payment went through, and the file showing what it was for. I filed taxes myself on 10/15 and showed the $11,500 as a credit for taxes paid with the extension - they sent a letter today saying they have no record of that payment and that instead of a $7,000 refund we owe $4,500 plus penalties. Well, with all due respect where did that $11,500 go?? I have the all the information in front of me showing it as a payment for 2020 due with extension, so it is SOMEWHERE in their system associated with our SSN's. How hard can this be??
If you are confident the error is on their side, how do you deal with it, do you go ahead and pay the penalties and what they say is due and hope it gets resolved later? I'm frankly a little mad that I can't even get a call through to an actual human being and I'm not really in the mood to loan them $41,500 interest free while it gets sorted out. Of course the due dates for both of these is within 2 weeks, so no chance my letters will be responded to in time, but I'm very confident that I am correct on both of these so I'm almost willing to let additional penalties and interest pile up while it gets sorted out.
Anyone have advice for these scenarios?
1) My parents, brother and I are partners (4 of us) in a one bedroom condominium unit - there are 4 partners, always have been for the 17 years we have owned it. We got a $37,000 penalty notice in the mail for not electronically filing our 1065 and K-1s because they allege we have 233 members and are required to file electronically. Where this 233 number came from is a complete mystery. My dad filed everything before he died, but I have copies of all of it, nowhere is there a 233 or any type of mistake that I can find. EIN is the same one we have used year after year. Of course when you call the phone number, they say that due to covid they can't take your call and to call back another time. I wrote a letter and included lots of documentation, so hopefully that will solve it.
2) On our personal 1040, we filed an extension back in April, and I paid $11,500 as an estimate of what was due. I asked my business accountant to set up the extension for me (I do my own taxes, but was going through death of my father and had no ability to deal with filing taxes on time, so I needed an extension) and they gave me all the forms and showed me how to pay what was due. I have the confirmation number from IRS Direct Pay, the confirmation that the payment went through, and the file showing what it was for. I filed taxes myself on 10/15 and showed the $11,500 as a credit for taxes paid with the extension - they sent a letter today saying they have no record of that payment and that instead of a $7,000 refund we owe $4,500 plus penalties. Well, with all due respect where did that $11,500 go?? I have the all the information in front of me showing it as a payment for 2020 due with extension, so it is SOMEWHERE in their system associated with our SSN's. How hard can this be??
If you are confident the error is on their side, how do you deal with it, do you go ahead and pay the penalties and what they say is due and hope it gets resolved later? I'm frankly a little mad that I can't even get a call through to an actual human being and I'm not really in the mood to loan them $41,500 interest free while it gets sorted out. Of course the due dates for both of these is within 2 weeks, so no chance my letters will be responded to in time, but I'm very confident that I am correct on both of these so I'm almost willing to let additional penalties and interest pile up while it gets sorted out.
Anyone have advice for these scenarios?
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