The IRS Audit Blog

Question: “Where’s My Stimulus” on irs.gov states my refund will be deposited on 5/9. Could it deposit sooner?

I am just curious. I am trying to get an idea of when it might deposit…will be be on the 9th, or could it be Tuesday or Wednesday. 5/6 or 5/7? Thanks!
Thanks to all…I’m just happy I have some idea as to when it’s coming now! Good luck to all of you still waiting!

Answer: It could be earlier this week, but most of them won’t be until Friday.

Cash that costs

After a month spent push-starting their ’91 Suzuki Sidekick in the rains of winter, Heather Epp and her boyfriend, Jack, could see an answer to their problems: A tax refund anticipation loan, which they hoped would let them get their hands on their refund money in a day or two …

Tax Tip: Where’s My Refund?

Question: I refiled my taxes with the assistance of an attorney. I only $448. But they still say I owe 38Gs on 70Gs.?

I have sent this paperwork to the IRS. They have taken my returns consistently since the audit in 2005 and again this year. Can I get my money back?
Rephrase: In 1999, I file my own taxes on a 1040ez form. I wasn’t familiar with how to report my stock option earnings at the time. In addition, the company I worked for lumped all earnings into one W2 – the total earnings for that year was 70,000. Base wage + Stock Options. Taxes were automatically taken out when I cashed in the options. However, my filing gave the IRS the impression that I had additional earnings. In 2005 I was audited due to a mistake on my return. The result was – I owed 42, 000 in taxes in 1999. I refiled with the assistance of a CPA / Tax Attorney.
The result was that I only owed 440.00 in taxes for 1999. My attorney submitted the appropriate tax forms in 2006. This year I received a letter that my stimulus and tax return was taken again for 1999. Which now states I only owe $38,000

Answer: Okay, new sequence.

You exercised (and sold?) stock options in 1999. These were NSOs where the spread is included in the W-2 in box 1, after which, your basis in the stock was the FMV on the day you got the stock. If you resold the stock the same day, your capital gain would have been ZERO.

Unfortunately, you didn’t file a schedule D showing the sale of the stock until recently. Without knowing your basis, the IRS used $0 and taxed you not only on the spread, but the ENTIRE FMV of the stock.

This caused you to appear to have considerably more income. With the under-reporting statute being 6 years, you could get hit with tax (say 35%), an accuracy penalty (20%-25%) and interest. This could easily cause you to owe $38K if the FMV had been, say $60K.

When you refiled, the tax return had to be sent to the statute group. They had to verify that your return was still within statute and how much of the additional tax had been incurred/paid in the previous 24 months. This adds weeks to the 1040X process, which was already 8-12 weeks to begin with. If you did this recently, there hasn’t been time to process it.

So…in the meantime, the IRS thinks you still owe and it’s still grabbing refunds. When the dust settles, if you were able to show enough paperwork to show it was in fact a same day sale of an NSO, you’ll be okay and the excess refunds will be returned to you.

Intuit TurboTax Home & Business: Comprehensive Help for Sole-Proprietor Taxes

TurboTax Home & Business’s attention to detail and excellent data-import features make it the package of choice for sole proprietors with complex tax situations, but it’s expensive and it might be overkill for some sole Schedule C filers.

Prepaid Legal Services

Question: Common Law Marriage In Texas & Taxes — Help!!?

I live in TX which recognizes common law marriage. I was common law married to my husband (lets say husband #1) for 5 years when I met some other guy who I unfortunately had a fling with…

The new guy told me my marriage wouldnt matter if husband #1 didnt know because of a 2 year statute of limitations, and he convinced me to marry HIM “formally”. Now, #2 didnt work out. We only “married” for 2 months and split up (fling). Now I am back living with #1, and #2 is filing for a formal divorce. And from a legal standpoint I beleive Im still common law married to #1 (with whom i currently reside) and I dont know what to do…

and just for the record, my common law marriage to #1 can be proved from witnesses, 5 years or IRS tax records (as married), joint accounts, etc.

my total time seperated from #1 was ONLY one year, which means the statute of limitations didnt lapse either. Now, should i file my taxes this year as married to #1? What about this divorce from #2?

Help!!!

Answer: Just get an annulment and get it because you were told that #1 is your legal spouse.Ignorance is not excepted by the law.Get an annulment NOW.

Are You Eligible For Some of The $37.5 Million in Unclaimed Taxes?

People who did not file in 2007 could get money back.

Statute of Limitations

Question: Will a signed and scanned copy of the state tax filing be accepted ?

I was working in Chicago Illinois for a month or so in 2008 before I returned to my native country .While trying to file the taxes I found that I was able to Efile the federal tax returns, but for the state of illinois I was unable to file the state tax return since it requires you to either have a state id or a Illinois drivers license

Since I am currently not in the US and it would take postal mail nearly a week or so to reach the Illinois tax office if sent from my country,would it be accepted if I can sign and scan the state tax return and send it the scanned copy along with other documents to my relatives there who can then put in an envelope and send it to the IRS

Please give your inputs as to the signed and scanned copy would be accepted as legitimate,I just want to ensure the taxes are filed before April 15th ( I know I am late in doing it …)

Answer: A foreign postmark will be considered proof of timely filing. Use registered mail if you want proof.

Taxpayers can expect few surprises filing this year

Notable variations include a changed deadline of April 18.

[Introducing L3C - Part 1] L3Cs: Social Enterprise’s Powerful, New Capital Formation Tool

Question: If I don’t get this resolved, I might have a nervous breakdown.?

My husband and I have been using this lady to do our taxes for 5 yrs now. Recently we were audited. She told us to sign power of attorney papers that will allow her to deal with all of our tax concerns. We did. We sent her our 2007 tax info. a couple months ago, and now we can’t get ahold of her!! She lives a couple hours away, and we’ve been calling her every single day, leaving a message asking her to return our calls, and she never does! I’ve sent 2 certified letters to her with our concerns. She signs for them, but never gets in touch with us. We are really freaking out, because the tax deadline is coming up, we still have this audit that we’re trying to deal with, and if she is our power of attorney with everything, then that means she’s now receiving documents from the IRS that are ours, right? What should we do?

Answer: Contact IRS and ask if documents and letters have been sent to her instead of you. Look at your copy of last year’s return and get the preparer’s ID #. Record every time you attempt contact, use your phone bills etc. Keep the paperwork from the post office. Next I would get a consultation with an attorney. Most are free for the initial consultation. This will give you a better idea of how to deal with this person. Your taxes may be under control and she is really swamped at this time of year, but it it inexcusable not to return a call. Oh, find another tax person or do your own from now on.
Is it possible that you owe her money?

IRS Reveals New Offshore Voluntary Disclosure Initiative for 2011

The IRS has revealed a new offshore voluntary disclosure initiative for 2011, and tax attorney William D. Hartsock, Esq. and his legal/accounting staff are on the forefront of the new changes.

Battle Hymn of the IRS