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Old 01-02-2020, 04:49 PM
 
Location: San Diego, CA
524 posts, read 406,174 times
Reputation: 1285

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I didn't know about this until after receiving a letter from the IRS a week ago:

Apparently, the 2018 Tax Year Schedule D Instructions contained an error, which the IRS got around to correcting around mid-May 2019 (as in a month after taxes are due), and about three months after I had filed my taxes.

Being blissfully unaware of this (I don't know why I didn't think to redo my taxes monthly after filing them - you know, in case the IRS decided to change the tax forms). The IRS website on this error says that some folks may get a refund, and some may owe more.

Well - in today's mail I received another letter from the IRS; I fall into the latter category. Fine - I'll pay the extra that I owe. BUT there's also an interest charge of just over 3.8%, covering from 15 APRIL through 31 DEC (about 5.36% on an annual basis).

Given that there was no malice on my part (what I filed was accurate per the IRS forms at the time, and actually up until a month after taxes were due), should I really have to pay interest on the extra amount owed ex post facto?

I guess this is just a philosophical question - I just wonder if it's worth my time to call the IRS toll-free line and try to get out of it - as the error was on their part, not mine (i.e. why should I pay a penalty for their mistake).
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Old 01-02-2020, 04:52 PM
 
Location: Boston
9,896 posts, read 2,885,955 times
Reputation: 6959
sure, call, they are great people to work with.
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Old 01-02-2020, 05:06 PM
 
13,090 posts, read 10,443,228 times
Reputation: 10162
Quote:
Originally Posted by GuyInSD View Post
I didn't know about this until after receiving a letter from the IRS a week ago:

Apparently, the 2018 Tax Year Schedule D Instructions contained an error, which the IRS got around to correcting around mid-May 2019 (as in a month after taxes are due), and about three months after I had filed my taxes.

Being blissfully unaware of this (I don't know why I didn't think to redo my taxes monthly after filing them - you know, in case the IRS decided to change the tax forms). The IRS website on this error says that some folks may get a refund, and some may owe more.

Well - in today's mail I received another letter from the IRS; I fall into the latter category. Fine - I'll pay the extra that I owe. BUT there's also an interest charge of just over 3.8%, covering from 15 APRIL through 31 DEC (about 5.36% on an annual basis).

Given that there was no malice on my part (what I filed was accurate per the IRS forms at the time, and actually up until a month after taxes were due), should I really have to pay interest on the extra amount owed ex post facto?

I guess this is just a philosophical question - I just wonder if it's worth my time to call the IRS toll-free line and try to get out of it - as the error was on their part, not mine (i.e. why should I pay a penalty for their mistake).
Pay the principal and then ask to be let go on the interest. This at least shows good faith on your part.
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Old 01-02-2020, 05:09 PM
 
Location: SoCal
15,419 posts, read 7,370,946 times
Reputation: 12398
Just pay it. The IRS claimed I owe money, I called and send mail to claim otherwise, i should owe zero money, in the end nothing was resolved and they made off $100 worth of interest. They lost everything we sent and resent. My husband and I could have paid much less. The IRS people are worthless bunch, but for our sake we paid and got on with life. That’s my advice.
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Old 01-02-2020, 05:37 PM
 
1,297 posts, read 609,649 times
Reputation: 1446
Quote:
Originally Posted by GuyInSD View Post
I didn't know about this until after receiving a letter from the IRS a week ago:

Apparently, the 2018 Tax Year Schedule D Instructions contained an error, which the IRS got around to correcting around mid-May 2019 (as in a month after taxes are due), and about three months after I had filed my taxes.

Being blissfully unaware of this (I don't know why I didn't think to redo my taxes monthly after filing them - you know, in case the IRS decided to change the tax forms). The IRS website on this error says that some folks may get a refund, and some may owe more.

Well - in today's mail I received another letter from the IRS; I fall into the latter category. Fine - I'll pay the extra that I owe. BUT there's also an interest charge of just over 3.8%, covering from 15 APRIL through 31 DEC (about 5.36% on an annual basis).

Given that there was no malice on my part (what I filed was accurate per the IRS forms at the time, and actually up until a month after taxes were due), should I really have to pay interest on the extra amount owed ex post facto?

I guess this is just a philosophical question - I just wonder if it's worth my time to call the IRS toll-free line and try to get out of it - as the error was on their part, not mine (i.e. why should I pay a penalty for their mistake).
they aren't assessing a penalty, just interest. You had money you shouldn't have had, so interest is what corrects the situation.

You could ask, but I doubt they'll be very sympathetic.
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Old 01-02-2020, 10:18 PM
 
7,194 posts, read 3,373,944 times
Reputation: 6358
IRS rarely refunds interest. They are much more likely to refund penalties if you can provide reasonable cause why you shouldn't owe the penalty.
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Old 01-03-2020, 06:02 AM
 
3,023 posts, read 1,977,493 times
Reputation: 6822
IRS form instructions aren’t an authoritative source of tax law. If the money was legally owed, they can assess the penalty and interest.
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Old 01-03-2020, 06:37 AM
 
Location: plano
6,805 posts, read 8,449,198 times
Reputation: 6102
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.
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Old 01-03-2020, 11:20 AM
 
Location: Phoenix, AZ
2,060 posts, read 954,840 times
Reputation: 5276
Quote:
Originally Posted by GuyInSD View Post
I just wonder if it's worth my time to call the IRS toll-free line and try to get out of it

What is the amount of interest/penalty you are talking about?
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Old 01-03-2020, 11:25 AM
 
Location: SoCal
15,419 posts, read 7,370,946 times
Reputation: 12398
I called the toll free line, I even called the special number that is supposed to help you. Nada.
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