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Old 01-03-2020, 11:42 AM
 
Location: NYC
14,228 posts, read 9,521,223 times
Reputation: 15862

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They must be contacting people who make a sizeable amount. Since I didn't get a letter I will not file any amendment or pay anything until I am audited or notified to do so. This is the kind of BS that only a dept that has so much power can admit to a mistake and make people pay for it.
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Old 01-03-2020, 04:17 PM
 
Location: San Diego, CA
524 posts, read 406,174 times
Reputation: 1285
Quote:
Originally Posted by adjusterjack View Post
What is the amount of interest/penalty you are talking about?
Sorry - bad wording on my part; there is no penalty assessment (yet) - just interest (at about a 5.36% annualized rate).
With the salary from my day job, I earn enough to pay the interest in about two hours time.

I have no problem with paying the additional taxes that I owe, and even some interest on that; but given what the Fed Funds rate has been this past year, 5.36% seems a bit excessive.
I guess it's just the principle of the thing that irks me.
Given that it'd probably mean hours on the phone to even try to contest this, I'm just going to cough up the $; my time is worth more than that.
Attached Thumbnails
IRS corrects error in Schedule D Instructions post-April 15th; now owe Interest?!-2019-fedfundsrate.jpg  
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Old 01-03-2020, 06:52 PM
 
1,297 posts, read 609,649 times
Reputation: 1446
Quote:
Originally Posted by GuyInSD View Post
Sorry - bad wording on my part; there is no penalty assessment (yet) - just interest (at about a 5.36% annualized rate).
With the salary from my day job, I earn enough to pay the interest in about two hours time.

I have no problem with paying the additional taxes that I owe, and even some interest on that; but given what the Fed Funds rate has been this past year, 5.36% seems a bit excessive.
I guess it's just the principle of the thing that irks me.
Given that it'd probably mean hours on the phone to even try to contest this, I'm just going to cough up the $; my time is worth more than that.
Fed funds rate isn't indicative of the IRS underpayment rate. It dropped from 6% in Q2 to 5% in Q3 and stayed there for Q4, which resulted in the rate you calculated.

https://www.irs.gov/newsroom/interes...uarter-of-2019

https://www.irs.gov/newsroom/interes...uarter-of-2019
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Old 01-04-2020, 08:43 AM
 
3,804 posts, read 9,803,070 times
Reputation: 7425
worked in Taxpayer Advocate's office for 15 years. Penalties can go away but I was never removing interest. Of course, anything can change but the chance of that one changing is close to zero.
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Old 01-04-2020, 09:27 AM
 
Location: Stuck on the East Coast, hoping to head West
3,984 posts, read 9,562,500 times
Reputation: 8085
I would at least create an amended return (even if I didn't file it) to double-check the IRS calculations. Most tax software will allow you to create an amended return for free and only charge if you decide to file.
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Old 01-04-2020, 11:20 AM
 
4,580 posts, read 3,084,391 times
Reputation: 9136
Quote:
Originally Posted by bande1102 View Post
I would at least create an amended return (even if I didn't file it) to double-check the IRS calculations. Most tax software will allow you to create an amended return for free and only charge if you decide to file.
I would just mail the check. Move on.
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Old 01-04-2020, 11:48 AM
 
Location: San Diego, CA
524 posts, read 406,174 times
Reputation: 1285
Quote:
Originally Posted by KaraG View Post
Quote:
Originally Posted by bande1102 View Post
I would at least create an amended return (even if I didn't file it) to double-check the IRS calculations. Most tax software will allow you to create an amended return for free and only charge if you decide to file.
I would just mail the check. Move on.
Actually, yeah - the first thing I did was try to redo my Tax Return...but H&R Block hasn't had an update since April 26th, and has no plans for any further updates (the IRS discovered this error in mid-May - apparently it's not important enough for H&R Block to put out an update).


So - yeah, I just paid it (electronically)...although from looking at the email confirmation I received, I should have waited a few minutes - looks like there's a Nigerian Prince who could have helped me out with this ; )
Attached Thumbnails
IRS corrects error in Schedule D Instructions post-April 15th; now owe Interest?!-irs-confirm.jpg  
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Old Today, 04:21 PM
 
13,090 posts, read 10,443,228 times
Reputation: 10162
Quote:
Originally Posted by Johnhw2 View Post
It may well be owed plus interest but if a business ran this way it would lose customers to the point of changing their ways. No competition is the biggest issue I see with the fed gov. They make rules for us not them. I find the form error highly distasteful as a principle.
Also, being able to collect interest creates a perverse incentive to give inaccurate form instructions. ( The law is still the law though.)
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