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Tax issues *Advice needed*

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jinglingxl

Golden Member
Mar 3, 2000
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Hi guys, I need to get some tax advice.

I received a IRS collection letter today that I owe them back taxes from 2008! Apparently I did not report the unemployment payment I collected in 2008 when I lost my job. It was a honest mistake, I did not know that unemployment pay is taxable, and besides I never received any W2 or any payment summary for tax return. So I did not report those pay for tax return in 2008 because I had no idea I had to.

I just received the letter to payback the owed taxes this month, June 2010, and this is collection for 2008 tax return.

> They are 2 years late, and they also wanted to charge me for interest (about $130)

Do I have any legal grounds to fight any of this? Or get reduced payment? Anyone had similar experience? Any advice on dealing with this is greatly appreciated !!

I live in NYC btw.
 

grohl

Platinum Member
Jun 27, 2004
2,849
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pay it, lesson learned. Sounds like it isnt that much money to do anything about anyway.
 

bruceb

Diamond Member
Aug 20, 2004
8,881
112
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The best you could do is ask them to please waive the interest and penalty. The unemployment is taxable and as such, must be reported. You or your cpa should know most of the tax laws, in regard to income. Also, there is no statute of limitations on unreported income or tax evasion.
 

rasczak

Lifer
Jan 29, 2005
10,417
1
76
Pay and get over it. Be glad you're not paying in the tens of thousands vs a couple hundred and call it a day.
 

bruceb

Diamond Member
Aug 20, 2004
8,881
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It would be $130 Penalty / Interest, plus the amount of the unpaid TAX Due
 

Fern

Elite Member
Super Moderator
Sep 30, 2003
26,915
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-snip-
Do I have any legal grounds to fight any of this? Or get reduced payment? Anyone had similar experience? Any advice on dealing with this is greatly appreciated !!

I live in NYC btw.
I'm a tax CPA.

If you received the unemployment benefits the IRS claims, no, you have no legal grounds to fight it.

Unemployment benefits got a tax break in 2009, but remain fully taxable for 2008 and prior years.

You must also pay the interest on the outstanding tax. The IRS is prevented by statute/law from waiving it. They can waive penalties, but not interest (There is a very limited exception, e.g., they receive your payment and fail to deposit it. But I see no reason this exception would apply in your case).

You might be able to get a payment schedule instead of paying all at once, but interest still runs on any balance. If that interests you contact the collection agent named on your letter.

Fern
 

spidey07

No Lifer
Aug 4, 2000
65,481
3
76
And for anybody else reading you can have taxes withheld from your unemployment insurance payments. If you don't you could be looking at a very hefty tax bill.
 

dfuze

Lifer
Feb 15, 2006
11,953
0
71
I'm a tax CPA.

If you received the unemployment benefits the IRS claims, no, you have no legal grounds to fight it.

Unemployment benefits got a tax break in 2009, but remain fully taxable for 2008 and prior years.

You must also pay the interest on the outstanding tax. The IRS is prevented by statute/law from waiving it. They can waive penalties, but not interest (There is a very limited exception, e.g., they receive your payment and fail to deposit it. But I see no reason this exception would apply in your case).

You might be able to get a payment schedule instead of paying all at once, but interest still runs on any balance. If that interests you contact the collection agent named on your letter.

Fern
nice expert advice
 
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