Personal Finance and Investing
In reply to the discussion: The IRS says I didn't report income that I reported 👀 😲😭💔 [View all]progree
(10,901 posts)1. Once I forgot to give my tax guy my Fidelity 1099 stuff. When I found the damn thing a year later (in the wrong folder) I wrote the IRS. About a month later I got an IRS notice about it. Anyway I wrote that I hope I could avoid some certain large penalty, given that I initiated the contact letting them know of the error. Fixed, no penalty beyond the interest charges. And of course I had to pay the additional tax on the additional income
2. My elderly Dad in his last 2 years neglected to take his IRA RMD distributions. There's a 50% penalty for failure to take required RMD distributions, meaning for example if he was supposed to take $10,000 RMD distribution and didn't take any, then he has to take the distribution and pay the resulting tax on the increase in taxable income, PLUS 50% of $10,000 = $5,000 penalty.
My sister and I wrote a long record about how medically on the edge he was in the last 2 years with all his ailments and tons of prescriptions -- result: penalty waived
3. Something about some interest on an H Bond IIRC but might have been something else. Anyway I had a phone conversations with an IRS agent who very patiently and expertly explained the whole thing.
4. Back when I was on the ACA (Affordable Care Act, Obamacare), they complained that the estimated income (AGI) that I had used to get the ACA subsidies was far below what was subsequently reported to the IRS (they actually expect you to guess your income nearly 2 years in advance, sigh).
I explained in an overly long letter (that was probably unnecessary in all its excruciating detail) that actually my estimate of my AGI was quite accurate -- listing about 7 different sources of income -- EXCEPT for one thing -- I took a large Roth conversion at the end of the year that I had not anticipated doing when I made the estimate (Roth conversions add to one's AGI and taxable income). I never heard back 😊
I can't think of any encounter I've had with the IRS that was unfair or the person was a jerk or anything like that.
Not this one, but I'd expect that in their response to my upcoming response, given that a human IRS agent, and not a bezerko computer, looked at it.