Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
[[Here's one for the books....(mine anyway):

It became apparent last year (1998) that my 1994 Federal return
was...ummm.... not 100% accurate. I found this out after the IRS sent me a "bill"
for something in the nieghborhod of $31,000.

Once the nitro took affect, I called my accountant and he "re"did my return (I
did the original back in '95).
According to his calculations, and based upon the information from my return
(the original), he determined (and I immediately agreed) that the IRS actually
owed ME $850.

Shortly after submitting this "corrected" return, I was advised by the IRS that
because there was a more than 3 year "gap" (1995 - 1998), they were not
recognizing the amount due as it was past the three (3) year statute of
limitations.....]]

Without knowing the exact dates, it is really difficult to deal with your question. But, generally, the statute of limitations is three years from the due date of the tax return...or the actual filing date. So if your 1994 tax return was timely filed, your statute expired on April 15, 1998. (three years from the due date of the tax return...which would have been April 15, 1995). Your accountant should have known this immediately.

[[ Is anyone else as surprised to hear this as I was? Aside from contacting my
Congressman, any thoughts as to other avenues that might be available to me?]]

Again, not knowing the facts, I can't really give an opinion. But it's uncommon for IRS to send you a "bill", and then not let you deal with the issues at hand. There are forms to be signed, statutes to be extended, etc. I would really need to know how and why the entire issue came about to really comment. (and I really don't have time to get into this discussion at this time of year...but I'll be glad to kick it around after tax season).

But you REALLY need to retain the services of a qualified tax pro with experience in IRS collection and assessment matters. They should be able to review all of the documents and give you some support.

[[ What troubles me most is the IRS is the partt that RAISED the issue to begin
with... MORE than 3 years late(r).]]

Which is an issue that needs to be discussed. Unless the IRS is claiming fraud or substantial understatement (which do extend the statute), they also have to live with the 3 year statute. Which is why you really need to get a tax pro with experience in these issues.

[[ I'm interested in hearing another perspective.....]]

If you would like to read more about this issue, check out IRS Publications 1 and 594 at the IRS web site. That'll give you some additional information that you can use.

TMF Taxes
Roy

Want to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. It'll help you with your 1998 taxes, and it's never to early to start planning for your 1999 taxes. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.