March 13, 2014

I owe the IRS $1,400…Now what?

I owe the IRS $1,400…Now what?



Tax time is a cause of headache for a lot of people, but until yesterday it was just a mild annoyance. I got home from work yesterday and checked my mail and saw the dreaded letter. The letter from the IRS. I’ve never gotten anything from them before, so of course I was concerned. My first thought was something must have been wrong with the return we had filed last month. I was wrong.

It was a letter stating that we owed $1,400 from 2012 because I didn’t claim income from a 1099. I couldn’t believe it! You see, I don’t do my taxes myself, I pay over $300 to go have a professional company do it, so how did this happen!? I wasn’t sure, but I went to find out.

Now, I’m not going to name this company at this moment, I’m going to give them a chance to make this right. I was up bright an early this morning to go talk to them and find out what happened, and here is what I found out….


It wasn’t my mistake, it was theirs, but I still may have to pay.

When we went to the office in 2012 we submitted all of our stuff, and signed the paperwork. We found out before we left that we were missed a form (unrelated to the income the IRS says we didn’t claim) and was told to bring it back the next day and we could complete everything. That is what we did. Mind you, we had already signed everything, and when we signed it, my 1099 was on the screen we looked at. I ran in to the office the next day and gave the missing form and was told that was all I needed to do, and everything was good.

Well everything wasn’t good, our tax professional  had forgotten to submit my 1099. How this happened, I can’t tell you. I don’t know, considering how much time we spent talking about it during our appointment.  Fast forward to today when I talked to her and her supervisor today. I was asked how do they know I’m not lying about the paperwork that I brought to them. The paperwork with all the copies of our forms, their fees, and anything else they gave me. They claimed I could have just “stapled it in there”. I was shocked and hurt.

So I was told they would submit the claim (because I paid for the guarantee that claimed it would take care of any audits from the IRS) and in 4-6 weeks I would either A) Get a check to cover the fee (and I would also have to pay taxes on said check) or B) A letter saying the claim was denied. And once they submitted the claim, they could no longer help me. I have until April 9th to pay $1,400 to the IRS. If I don’t get an answer by then I have to pay additional fees, which I found out are not covered in the guarantee.  So all I can do is sit and wait.

I will update you on what happens as soon as I know, in the meantime….

So learn from my mistake, and follow these tips:

  • Know your Tax Professional. Did they go to school? Or were they just hired and trained for a few weeks?
  • Make a checklist. Make a checklist of everything you brought in, and have your tax professional sign and date it saying that they received it.
  • Know what you are paying for! Sure a guarantee sounds great! But in the end will it really help you if something happens? Read the fine print.
  • Double Check Everything. Don’t trust that someone knows what they are doing, because obviously, this is not always the case.
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