Weird IRS problem - am I domed?

[brp914]

I got a letter from IRS saying I failed to pay taxes on royalties for TY 2022. Now there is interest and penalty besides. It's not a scam, however it is a screw up. I'm not entitled to any royalties and never received any. It is absurd. I wrote to the IRS saying it is impossible. The IRS replied with the firm that supposedly paid me and said I need to work this out with them and that interest continues to accrue. I contacted the firm at their web site. They do not reply. Why? Probably, it's that they have no idea who I am. I have no idea who they are. I wrote to IRS and said they should contact the firm to fix their error. Do I really need to pay a lawyer to prove my innocence? In Chinese courts you have to prove your innocence. Is this what it's come to?

[Rick Lee]

I've had two life insurance policies recently rescinded I think due to mistaken identity. I wrote two women with the same name in the same zip code in the same week. Another has a pretty common name and into a billing dispute with her doctor because of an unpaid bill by a woman with the same name AND same birthday. This stuff is a problem. But EIN and/or SS #s should get it straight.

[Bill Douglas]

Surely thy have to prove you received the income.

[brp914]

Originally Posted by Bill Douglas

Surely thy have to prove you received the income.

I'm not a lawyer, but I guess this would come out in court. I don't even want to think of trying to recoup costs for this.

[pwd72s]

Originally Posted by brp914

I got a letter from IRS saying I failed to pay taxes on royalties for TY 2022. Now there is interest and penalty besides. It's not a scam, however it is a screw up. I'm not entitled to any royalties and never received any. It is absurd. I wrote to the IRS saying it is impossible. The IRS replied with the firm that supposedly paid me and said I need to work this out with them and that interest continues to accrue. I contacted the firm at their web site. They do not reply. Why? Probably, it's that they have no idea who I am. I have no idea who they are. I wrote to IRS and said they should contact the firm to fix their error. Do I really need to pay a lawyer to prove my innocence? In Chinese courts you have to prove your innocence. Is this what it's come to?

To answer the question posed by your last 2 sentences...when it comes to the IRS, yes.

[GH85Carrera]

My experience of dealing wit an IRS error is an exercise in time wasting and patience, and expense on your part.

You will likely have to spend a day of your time, and call them, spend a few hours on hold, and finally talk to a human. They will be almost as useful and helpful as talking to your dog. Ask them to set up an appointment for you to drive to the nearest SS brick and mortar office to go see a IRS employee face to face, and show evidence of your case.

Take a patience pill, as you will sit in an outer office for a while, and you will finally go back and talk to a human. In my case the first person took all the information and could not fix the computer error, and she called over the one and only employee that understood the problem, and likely showed the first employee for the 100th time, how to resolve the issue.

My issue was they did not show on entire of earnings. I had sent them my W9, and a copy of my filed tax returns. That went on for 4 years. They just could not fix the problem until I sew them face to face. It was an exercise in futility to find the one employee that actually was smart enough to fix the problem with their records. She typed on the computer for literally seconds, and wham my records were correct. Several years of effort corrected in seconds.

[brp914]

Originally Posted by GH85Carrera

My experience of dealing wit an IRS error is an exercise in time wasting and patience, and expense on your part.

You will likely have to spend a day of your time, and call them, spend a few hours on hold, and finally talk to a human. They will be almost as useful and helpful as talking to your dog. Ask them to set up an appointment for you to drive to the nearest SS brick and mortar office to go see a IRS employee face to face, and show evidence of your case.

If only I could produce the cancelled royalty check that never existed or deposit never made.

[GH85Carrera]

Originally Posted by brp914

If only I could produce the cancelled royalty check that never existed or deposit never made.

Show them the statements that show no payments when they say you did receive them.

[Seahawk]

You can do this, trust me: The Chunky Lady only sings when you let her...

I have lived this dream and the way out, if you are sure you are in the right, is to ask for an audit for the TY in question.

They hate that.

I do all my household and LLC finances, taxes, etc., have since my first pay check: If you are sure you are right, I am betting you are, make their accusations their problem.

The only thing a bureaucrat hates more than work is being held accountable. The IRS is not staffed by the best and brightest, BTW. I have been audited twice and owned both of the Auditors like a roped goat.

[Crowbob]

Originally Posted by brp914

I'm not a lawyer, but I guess this would come out in court. I don't even want to think of trying to recoup costs for this.

How much they talkin’ you owe?

Under $1,000 pay up and shut up. You’ll live longer.

Over $1,000 pay up and shut up. You’ll live.

A couple years ago IRS had a problem with my long term capital loss. I called them-nada. My lawyer wrote them-also nada.

I paid up, shut up and stopped claiming the loss which you have to amortize but only up to $3K per year.

I will never have a capital loss again, ever. This is what they want so this is what they get.

Bastiges.

[brp914]

Thanks Seahawk. Double down...I like that. By the way, The original IRS letter claimed I didn't pay taxes for W2 income for TY 2022. Problem is, I retired in 2021. I reviewed my returns and uploaded docs to their portal. That issue seems to have evaporated. These guys are out of control!

[brp914]

Originally Posted by Crowbob

How much they talkin’ you owe?

Under $1,000 pay up and shut up. You’ll live longer.

Over $1,000 pay up and shut up. You’ll live.


Bastiges.

$13k. That is serious money.

[Noah930]

Out of curiosity (I'm being nosy now), what does the company who supposedly paid you royalties do?

[brp914]

Originally Posted by Noah930

Out of curiosity (I'm being nosy now), what does the company who supposedly paid you royalties do?

Horne LLP. Marketing and data analytics. Mississipi, of all places. Nothing related to what I used to do, which was banging out code in a cubicle farm for an enviro lab. Rarely saw light of day let alone a MS day. Only did internal stuff, except for one job where you could check out beach water quality:

https://www.beachreportcard.org/33.91029999999999/-118.51929100000001/11

[Crowbob]

Originally Posted by brp914

$13k. That is serious money.

Definitely worth the fight, then.

I owed substantially less so they blew me off knowing my ROI was unjustifiable.

[pmax]

Originally Posted by brp914

... I wrote to IRS ...

[masraum]

I don't have a ton of experience with the IRS, but IME, this will get worked out correctly. It may be a PITA, but I think it'll eventually be fine.

[masraum]

Originally Posted by Crowbob

How much they talkin’ you owe?

Under $1,000 pay up and shut up. You’ll live longer.

Over $1,000 pay up and shut up. You’ll live.

A couple years ago IRS had a problem with my long term capital loss. I called them-nada. My lawyer wrote them-also nada.

I paid up, shut up and stopped claiming the loss which you have to amortize but only up to $3K per year.

I will never have a capital loss again, ever. This is what they want so this is what they get.

Bastiges.

$1000 is not chump change, especially if it's totally bogus.

[speeder]

I've had the best luck just calling the IRS and talking to an agent or a supervisor...whoever gets on the phone. I know other people who have had the exact same experience and I live in a world of people who get paid as independent contractors from a myriad of sources, sometimes large amounts. Some of the people I know were even remiss in paying their taxes when they were young, so it wasn't even the IRS's mistake they were dealing with.

Everyone, to a person, has had good luck resolving problems by just calling the IRS directly. Screw all of those services and scams that claim to help you with your back taxes...just call the IRS. I've even had luck getting someone from the CA. Franchise Tax Board to help me with a dispute and they make the IRS look like a charity organization.

[speeder]

I should add, it goes without saying that every phone conversation should be followed up immediately with an email between you and the person you spoke with confirming whatever you discussed. Need to keep records.