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  1. #1
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    Tax mess resolved

    May 1 was my first day of retirement, and on May 4 I get a bill from the IRS for $25K for 2017. They said I had to pay that for stock options I got through the year. However, the options were RSU, which I immediately sold, and the sale was added to my W2 income, and tax was withheld. So, I have been stressed about that all month since the person who does my tax went on vacation 5/1, and she just got back. So, after a few minutes on the phone this morning, she cranked out some form explaining to the IRS that I already paid tax on those options.

    Thank goodness that is resolved. Maybe now I can start enjoying being retired.
    Bud

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  2. #2
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    Re: Tax mess resolved

    Thank goodness that’s over, enjoy your retirement!
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  3. #3
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    Re: Tax mess resolved

    Congrats on the retirement Bud.

    Thank goodness for good accountants. In some jurisdictions options being viewed as a benefit can be taxed even before they are exercised.
    Borresen Acoustics Loudspeakers, Borresen Model 01 Compact monitor loudspeakers with Ansuz Darkz T2s Supreme resonance control, Audio Video Manufaktur GmbH (AVM) Inspiration amplifier & streamer, Innuos Zen MKII music server, Ansuz Acoustics cables & accessories. Please visit my system thread hosted on Audioshark for more details. Disclosure: The author is materially connected to Ansuz, Aavik & Borresen Acoustics via friendship with an owner.

  4. #4
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    Re: Tax mess resolved

    I wouldn't say it's over until you get it in writing from IRS it's over.

    If you received an actual bill the assessment was made and it's more difficult to close. If you received a CP2000 notice, one with a dozen pages or so, that's a proposed change and it's very important to send back the notice with the box checked you disagree along with your explanation. This is sent by the units who check for under reporting or improper reporting.

    If it was an audit, hopefully it's still open and they will review your explanation. If the audit is closed, then you need to request it to be opened again in writing and submit the information not submit while it was open.

    The biggest mistake people make when receiving an IRS notice, is, not reading the notice and following the instructions.

    Also, don't trust your fate to others, even if they are paid, no one has your interest at heart like you do. Be sure you see the fax sent or envelope in the mail.

    Anyway, not the way anyone wants to start retirement, or, the day, I hope it is a closed issue for you.

    Quote Originally Posted by BlueFox View Post
    May 1 was my first day of retirement, and on May 4 I get a bill from the IRS for $25K for 2017. They said I had to pay that for stock options I got through the year. However, the options were RSU, which I immediately sold, and the sale was added to my W2 income, and tax was withheld. So, I have been stressed about that all month since the person who does my tax went on vacation 5/1, and she just got back. So, after a few minutes on the phone this morning, she cranked out some form explaining to the IRS that I already paid tax on those options.

    Thank goodness that is resolved. Maybe now I can start enjoying being retired.
    Aurender ACS10 w/Audioquest Diamond USB, Esoteric N05xd
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  5. #5
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    Re: Tax mess resolved

    Quote Originally Posted by Mr Peabody View Post
    If you received an actual bill the assessment was made and it's more difficult to close. If you received a CP2000 notice, one with a dozen pages or so, that's a proposed change and it's very important to send back the notice with the box checked you disagree along with your explanation. This is sent by the units who check for under reporting or improper reporting.
    Thank you. It is a CP2000, and I had forgotten about the part where I mark disagree, sign, and return. Word of advice, don’t have a stroke. It makes your memory useless.
    Bud

    Lumin X1 file player, Westminster Labs interconnect cable
    Sony XA-5400ES SACD
    Pass XP-22 pre, X600.5 amps
    Magico S5 MKII Mcast Rose speakers, SPOD spikes

    Shunyata Triton v3/Typhon QR for source, Denali 2000 (2) for amps
    Shunyata Sigma XLR analog ICs, Sigma speaker cables
    Shunyata Sigma HC (2), Sigma Analog, Sigma Digital, Z Anaconda (3) power cables

    Mapleshade Samson four shelf maple rack, Micropoint brass footers
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  6. #6
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    Re: Tax mess resolved

    Unfortunately I have to agree with Mr. P as that has been my second career for the last fifteen years including 8 in a year round district office for Block where I spent 8 months a year responding to IRS letters for clients. As he said it's never over until you get the final letter of resolution from the IRS and that usually takes a minimum of 6-8 weeks from receiving your response. And to make matters worse there is usually more than one section of the IRS involved in these actions that in many instances are in different locations and don't communicate with each other. I spent another hour on the phone with them Thursday for the second for a client where they clearly made a clerical error and admit it yet the payment letters keep coming 8 weeks after their first admission of fault. It will probably get cleared up and she will get her money sometime in July instead of March. Good luck with the outcome but it just isn't over yet.
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  7. #7
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    Re: Tax mess resolved

    Sorry to hear about the stroke.

    So you did send the notice back with the box checked? If so, you are good, just wait for the response. If not, hopefully the CPA at least sent a copy of the notice with the explanation.

    If the CPA sent notice & explanation you are still probably alright. If you don't hear anything in 30 days or so call the number on the front of the notice and follow up. 800-829-8310.

    If the CPA just sent a letter saying, hey, my guy don't owe this. Your odds of resolution go down quite a bit. The notice has info to direct your response to your case. I would send another copy of the letter with the notice and the box checked.

    In all instances, if no notice from IRS saying the case is closed after about 30 days, call the number to make sure your response has been received and in consideration.

    The CP2000 is about the easiest to get taken care of though since it's only a proposed change. Once the IRS gets an explanation they can put it to rest. So your account doesn't show an outstanding balance, no assessment has been made. And, it won't as long as you provide the information to stop it.

    Good for you for addressing it.

    Quote Originally Posted by BlueFox View Post
    Thank you. It is a CP2000, and I had forgotten about the part where I mark disagree, sign, and return. Word of advice, don’t have a stroke. It makes your memory useless.
    Aurender ACS10 w/Audioquest Diamond USB, Esoteric N05xd
    Mark Levinson #526, 534 & JBL 4367's
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    HT: Marantz AV8003, Linn 5125, JBL SAM3ha, Revel s30,
    SVS PC13 Ultra
    Transparent, Analysis Plus & Tributaries. PS Audio filtering
    Sony XBR-75X940D & BDP
    Parasound P6, MBL 8006b, Artisan speakers/subwoofer

  8. #8
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    Re: Tax mess resolved

    Thanks. I haven’t mailed anything yet. Tuesday I will return the CP2000, her tax form, and hope that resolves it.
    Bud

    Lumin X1 file player, Westminster Labs interconnect cable
    Sony XA-5400ES SACD
    Pass XP-22 pre, X600.5 amps
    Magico S5 MKII Mcast Rose speakers, SPOD spikes

    Shunyata Triton v3/Typhon QR for source, Denali 2000 (2) for amps
    Shunyata Sigma XLR analog ICs, Sigma speaker cables
    Shunyata Sigma HC (2), Sigma Analog, Sigma Digital, Z Anaconda (3) power cables

    Mapleshade Samson four shelf maple rack, Micropoint brass footers
    Three 20 amp circuits.

  9. #9
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    Re: Tax mess resolved

    Quote Originally Posted by BlueFox View Post
    Thanks. I haven’t mailed anything yet. Tuesday I will return the CP2000, her tax form, and hope that resolves it.
    If it wasn’t mentioned, send the letter Certified


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  10. #10
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    Re: Tax mess resolved

    Bud, its the Calif franchise tax board that are ruthless and will swipe your bank account at the drop of a hat. ive been self employed my entire work-life, very early on when i was less responsible and didn't file on time or completely it was the FTB that came at me with guns blazing. by contrast the IRS and the feds were far more lenient and easier to work with.

  11. #11
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    Re: Tax mess resolved

    Quote Originally Posted by UltraFast69 View Post
    If it wasn’t mentioned, send the letter Certified
    Yes. When I picked it up today I was told to do that.
    Bud

    Lumin X1 file player, Westminster Labs interconnect cable
    Sony XA-5400ES SACD
    Pass XP-22 pre, X600.5 amps
    Magico S5 MKII Mcast Rose speakers, SPOD spikes

    Shunyata Triton v3/Typhon QR for source, Denali 2000 (2) for amps
    Shunyata Sigma XLR analog ICs, Sigma speaker cables
    Shunyata Sigma HC (2), Sigma Analog, Sigma Digital, Z Anaconda (3) power cables

    Mapleshade Samson four shelf maple rack, Micropoint brass footers
    Three 20 amp circuits.

  12. #12

    Re: Tax mess resolved

    I got absolutely reamed on taxes for my stock options. Very sad to see 50% evaporate in 2017's tax year for what in actuality was a reward for the past 10 years' worth of my hard work (just in time before they expired). Just missed the slightly better brackets of 2018. The more we can simplify our tax code, the better. Glad you got this mess resolved

  13. #13
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    Re: Tax mess resolved

    Having had a few little issues with the IRS, on property sells., its never over until you have a letter in your hand telling you its been satisfied. I had to have an atty handle my mess, with a few face to face meetings. .
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