URGENT - IRS made mistake, but I am in trouble!


M

My interest

What can I if IRS made a mistake but insisted I was wrong?
It's a long story, but in brief:

1. I bought a house last July. My estate lawyer messed up the
so-called FIRPTA tax, but IRS held me responsible.
2. The estate lawyer thus hired a tax lawyer to deal with IRS
and finally agreed at a $2000 settlement.
3. The estate lawyer cut me a check (payable to me) and then I
sent a responding check (payable to IRS) to IRS for that
amount
4. My check was cashed on April 25. I thought the issue was
solved.
5. But surprisingly I received an IRS notice in June
threatening possible debt collecting procedure because I
had not made the payment.
6. I contacted both lawyers, the tax lawyer sent IRS a letter
together with my bank record showing the check images and
demanded the IRS to correct its mistake.
7. However I received a letter from IRS again today with the
same contents as step 5 above, but looks more serious

During the process, I have also called IRS and have spoken
to more than a dozen of agents. However all of them either
claimed they couldn't find my under-payment record (I guess
it's because they was only able to find 1040 related
information, not FIRPTA) or couldn't find my payment record
(basically, there is virtually no way for them to trace a
check payment. So if the check was posted to a wrong
account when it was cashed, they couldn't trace it any
more!!!)

So my questions are:

1. What can I do now in addition to contacting the lawyers
again?
2. Clearly it's IRS' mistake, but it's more powerful than I
am. If the IRS indeed kicked off debt collection
procedure, what can I do?
3. I am afraid of, at this moment, both of the lawyers may
hand off and leave me in trouble. (The estate lawyer may
say now it's the issue between you and IRS, not me. The
tax lawyer may say sorry I cannot help further.) In this
case, what can I do?

Many thanks in advance for any help/suggestion.

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
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S

Stuart Bronstein

My interest said:
What can I if IRS made a mistake but insisted I was wrong?

So my questions are:

1. What can I do now in addition to contacting the lawyers
again?
Have your lawyer file suit against the IRS district
director, seeking declaratory relief. When you do that the
IRS will get their lawyers involved, and they normally have
more sense than a lot of the agents.
3. I am afraid of, at this moment, both of the lawyers may
hand off and leave me in trouble. (The estate lawyer may
say now it's the issue between you and IRS, not me. The
tax lawyer may say sorry I cannot help further.) In this
case, what can I do?
Find a better lawyer.

Stu

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
 
S

steve-o

print out what you just posted. Fax the IRS branch that sent
you the correspamdence, fax this post and the canceled
check. Then call to see if they recieved it. Sounds like a
computer error. You need a real human being to stop it from
being escalated.

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
 
B

Benjamin Yazersky CPA

My interest said:
What can I if IRS made a mistake but insisted I was wrong?
It's a long story, but in brief:

1. I bought a house last July. My estate lawyer messed up the
so-called FIRPTA tax, but IRS held me responsible.
2. The estate lawyer thus hired a tax lawyer to deal with IRS
and finally agreed at a $2000 settlement.
3. The estate lawyer cut me a check (payable to me) and then I
sent a responding check (payable to IRS) to IRS for that
amount
4. My check was cashed on April 25. I thought the issue was
solved.
5. But surprisingly I received an IRS notice in June
threatening possible debt collecting procedure because I
had not made the payment.
6. I contacted both lawyers, the tax lawyer sent IRS a letter
together with my bank record showing the check images and
demanded the IRS to correct its mistake.
7. However I received a letter from IRS again today with the
same contents as step 5 above, but looks more serious

During the process, I have also called IRS and have spoken
to more than a dozen of agents. However all of them either
claimed they couldn't find my under-payment record (I guess
it's because they was only able to find 1040 related
information, not FIRPTA) or couldn't find my payment record
(basically, there is virtually no way for them to trace a
check payment. So if the check was posted to a wrong
account when it was cashed, they couldn't trace it any
more!!!)

So my questions are:

1. What can I do now in addition to contacting the lawyers
again?
2. Clearly it's IRS' mistake, but it's more powerful than I
am. If the IRS indeed kicked off debt collection
procedure, what can I do?
3. I am afraid of, at this moment, both of the lawyers may
hand off and leave me in trouble. (The estate lawyer may
say now it's the issue between you and IRS, not me. The
tax lawyer may say sorry I cannot help further.) In this
case, what can I do?

Many thanks in advance for any help/suggestion.
Not quite clear whats going on between the estate & the 2
lawyers here.

However, with regard to the payment issue, it seems more
like the payment & the account balance due never matched up.
That still needs to be resolved.

Again, speculating here, the IRS notices you are receiveing
probably need a timely & perhaps a formal response. Don't
let it sit & collect dust. That will only make matters
worse.

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] >>>
-----> real address on hobokeni or hobokenx <-----

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
 
M

Mike Wellman

My interest said:
What can I if IRS made a mistake but insisted I was wrong?
It's a long story, but in brief:

1. I bought a house last July. My estate lawyer messed up the
so-called FIRPTA tax, but IRS held me responsible.
2. The estate lawyer thus hired a tax lawyer to deal with IRS
and finally agreed at a $2000 settlement.
3. The estate lawyer cut me a check (payable to me) and then I
sent a responding check (payable to IRS) to IRS for that
amount
4. My check was cashed on April 25. I thought the issue was
solved.
5. But surprisingly I received an IRS notice in June
threatening possible debt collecting procedure because I
had not made the payment.
6. I contacted both lawyers, the tax lawyer sent IRS a letter
together with my bank record showing the check images and
demanded the IRS to correct its mistake.
7. However I received a letter from IRS again today with the
same contents as step 5 above, but looks more serious

During the process, I have also called IRS and have spoken
to more than a dozen of agents. However all of them either
claimed they couldn't find my under-payment record (I guess
it's because they was only able to find 1040 related
information, not FIRPTA) or couldn't find my payment record
(basically, there is virtually no way for them to trace a
check payment. So if the check was posted to a wrong
account when it was cashed, they couldn't trace it any
more!!!)

So my questions are:

1. What can I do now in addition to contacting the lawyers
again?
2. Clearly it's IRS' mistake, but it's more powerful than I
am. If the IRS indeed kicked off debt collection
procedure, what can I do?
3. I am afraid of, at this moment, both of the lawyers may
hand off and leave me in trouble. (The estate lawyer may
say now it's the issue between you and IRS, not me. The
tax lawyer may say sorry I cannot help further.) In this
case, what can I do?
What is likely is that the liability is working its way
through the notice process. Calling the IRS about it should
have resulted in the account being placed on hold while the
issue is resolved because it is going to take a few months
for that to happen. The IRS will continue to send certain
statutory notices, even if the account is on hold. What you
need is someone who understands the process to make sure
that collections are suspended while the matter is
addressed.

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
 
B

Barry Margolin

Stuart Bronstein said:
Have your lawyer file suit against the IRS district
director, seeking declaratory relief. When you do that the
IRS will get their lawyers involved, and they normally have
more sense than a lot of the agents.
Assuming this is successful, will he be able to get
reimbursed for his lawyer fees from the IRS? If not, what
happens if he spends more in legal fees than the IRS is
claiming he owes? He wins but he still loses.

And if he loses, he's even worse off, having to pay the IRS
*and* the lawyer.

--
Barry Margolin, (e-mail address removed)
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
 
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S

Stuart Bronstein

Assuming this is successful, will he be able to get
reimbursed for his lawyer fees from the IRS?
If the court finds the IRS position was unreasonable, yes.
Otherwise, no.
And if he loses, he's even worse off, having to pay the IRS
*and* the lawyer.
There are no guarantees in life, and life isn't,
unfortunately, fair. Taking all that into consideration he's
got to do what he thinks will work best for him - there is
no perfect solution.

Stu

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
 
M

My interest

Thanks for all the replies. I indeed have both called and
written to IRS (with copy of cancelled checks etc) several
times already. What really frustrated me was whenever I
called (on the number indicated on the notice), the IRS
agents seemed to have no clues. Everytime I would be
transfereed among a dozon of agents. All of them could
neither find the record I owe sth nor the record of my check
payment. There was even one occassion, an agent seemed to
suspect my call was hoax. He could not even believe I had
received several notices from IRS!!! I guess all those
agents could only retrieve Form 1040 related information,
but my case was related to Form 8288. Saying this I still
don't understand whey they could not find my check payment
given it was sent with the IRS provided payment coupon and I
wrote my SSN on the check.

I have written to local Tax Advocate earlier this week with
supporting documentation. But I am not sure whether they
can help solve the issue quickly before the matter
escalates. (BTW, is Tax Advocate the samething as the IRS
Ombudsman?)

Do you think is there any other matter I can take? Sometime
I really feel it's just wasting time to call or write to
IRS. But I am really struggled to find any effective
options.

Thanks.

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
 
M

My interest

Also, I am not sure even if I sent IRS a check again (i.e.
pay it again), will the issue be solved (given IRS
accounting team could not find any information about my
tax-due and my previous payment)

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
 
M

Mike Wellman

My interest said:
Thanks for all the replies. I indeed have both called and
written to IRS (with copy of cancelled checks etc) several
times already. What really frustrated me was whenever I
called (on the number indicated on the notice), the IRS
agents seemed to have no clues. Everytime I would be
transfereed among a dozon of agents. All of them could
neither find the record I owe sth nor the record of my check
payment. There was even one occassion, an agent seemed to
suspect my call was hoax. He could not even believe I had
received several notices from IRS!!! I guess all those
agents could only retrieve Form 1040 related information,
but my case was related to Form 8288. Saying this I still
don't understand whey they could not find my check payment
given it was sent with the IRS provided payment coupon and I
wrote my SSN on the check.

I have written to local Tax Advocate earlier this week with
supporting documentation. But I am not sure whether they
can help solve the issue quickly before the matter
escalates. (BTW, is Tax Advocate the samething as the IRS
Ombudsman?)

Do you think is there any other matter I can take? Sometime
I really feel it's just wasting time to call or write to
IRS. But I am really struggled to find any effective
options.
You have been given many good options. Perhaps you should
have someone else contact the IRS who understands the
collection process and correspondence processing within the
IRS.

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
 
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B

Bill

(e-mail address removed) (My=A0interest) posted:
Thanks for all the replies. I indeed have both
called and written to IRS (with copy of
cancelled checks etc) several times already.
<note: posting edited for brevity>
I have written to local Tax Advocate earlier
this week with supporting documentation. But I
am not sure whether they can help solve the
issue quickly before the matter escalates.
(BTW, is Tax Advocate the samething as the
IRS Ombudsman?)

Do you think is there any other matter I can
take? Sometime I really feel it's just wasting
time to call or write to IRS. But I am really
struggled to find any effective options.
Yes the Tax Advocate is the same thing. I may have been the
person who referred to that office as the "ombudsman."

Seems you've been doing reasonable things. At this point, I
can only counsel patience. Often, the government creeps at
an extremely slow pace.

Good luck. Let us know how this gets resolved.

Bill

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
 
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