Tax mess resolved

BlueFox

BlueFox

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Joined
May 11, 2013
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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. :)
 
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.

BlueFox said:
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. :)
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Mr Peabody said:
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.
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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. :)
 
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.
 
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.

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