So, my company screwed up the wages on the W2 they gave me for my 2008 taxes, a few months later (after filing a return with the faulty W2) I received an amended W2. I filled out an amended return, paid the IRS via check, they deposited the check, and I thought I was done.

So, two days ago I get a nice letter in the mail from the IRS. They're referring to the wages on my original tax return (not the amended one), I owed nothing on my original return and around $1100 on my amended return. The part that's confusing as hell to me though is that they're saying that I owe $3221, and give absolutely no explanation for that dollar figure. Of course the IRS phone line is closed today when I try to take care of it, but I was just wondering if anyone else has had to go through an audit...

I'm just wondering how complete my appeal needs to be. Can I just show them my amended return (which was done by a tax professional, my first return was done myself), the carbon copy from the check I wrote them, and my bank statement (along with the image of the backside of the check showing that it was processed by the IRS)... Or do I need to do more? I absolutely cannot afford an extra $2300 for the IRS, and their dollar figure is ridiculous in that it would be 15.8% of my income... It should be 15% before any deductions.

You aren't going to like this piece of advice, Porforis, but my advice in dealing with the IRS is to get a tax lawyer or a CPA who does taxes. (And the "does tax work" part is key: you want someone who does this sort of thing every day; many/most lawyers and CPAs do not.)

And I would NOT rely on being able to get it resolved over the phone. If I ever get into a dispute with the IRS, the *last* thing I would do is call them myself. Because the road to hell is paved with people who have "trusted" what some schmoe on the phone says -- unless you are talking to (a) an auditor type who (b) is capable of making rulings that bind the IRS, you just end up finding yourself a bigger hole.

Get someone who is used to working with the IRS and have them write the letters/make the calls.

My gut tells me this is a "simple case", and that tax lawyer/CPA may be able to do it with a single letter/phone call. Which will give you sticker shock nonetheless. But if the IRS gets snotty, having that hired gun in your corner is going to save the bill from ending up a lot bigger.

DIYing with the IRS is just not a good idea.

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The IRS is wrong. lol That's how I look at it.

I'd assume that your tax professional should be able to take care of it. You should call him/her/them to find out what sort of audit protection they have or if you had paid for any services like that.

Otherwise, I'd assume the information you mentioned having would be enough.. Maybe talk to your employer to see if they didn't mess up again (I had an issue this year with my former employer.. the previous 2 years they've been filing my W2's with the wrong SS number).

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Sounds to me like you Penalty and Interest because you underpayed at the filing of the original 2008 return. It also sounds like the IRS billed you prior to receiving your payment on the amended return.

You would have a right to a protest of their billing. But the absolute most urgent you need to do is stay in communication with them. Penalties are usually abated with full payment of the tax liability, however interest runs and keeps running at a clip of 1% per month. But if you pay the tax you owe, the interest bill may be negotiated lower; and if you stay in compliance, they would let you make payments.

Your frustration isn't with the IRS Porforis, it lies with your employer.

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I would have to agree with Wade, get some professional assistance and right away.

And as much as this really frosts my shorts, I would have to say <gag, cough, spit> you might want to pay heed to DakotaT.
If I remember correctly, DakotaT is some kind of corporate tax guy and as such I'm sure is well versed in these areas.

Best of luck to you Porforis, the IRS are scalawags.



I'm going to take a shower now, giving props to DakotaT leaves one feeling very dirty. ::wink:

My frustration lies with both because the IRS is acting like they never got my amended return and the money with it. Going back over my 2008 taxes, they're suggesting that I pay 25% of my taxable income. There's too much of a discrepancy here to chalk up to late penalties. My plan wasn't to call the IRS, I was planning to go into my local IRS office. The way I see it, there's a lot more accountability that way. However, I admit that I don't know much of anything about the appeals process...

I'd really prefer not to hire someone else to take care of this unless I absolutely have to (mainly because I don't have the money), can I just go into the local IRS office with copies of my original and amended returns, ask for an explanation of how they got to the dollar figure that they're asking me to pay, and revisit the idea of hiring a professional then?

[search=google]how to take a shower[/search]

Thought I'd use a function of our software to assist you in your new adventure.

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My apologies Porforis, it slipped my mind about the thread on what you could afford for an engagement/marriage.
I need to be reminded from time to time about being young and not having a lot of money. ( it may hard to believe, but those were some happy times of my life.)

Anyway, I would then suggest contacting the nearest IRS office and arraigning a face to face appointment . It is always better than working over the phone. Plus you will get an actual IRS agent that is authorized to deal with your issue, and not just some phone weenie.
And do this very soon, the IRS is easier to deal with if they don't think that you are trying to avoid them.

I might also suggest doing a web search for some guide lines on how to deal with the IRS, kind of like this.

How to deal with an IRS tax audit 

From what I have seen, some of the big things are to....
1. Have all documentation of your contended issue (make copies for the IRS agent, and you keep the originals).
2. If you need more time to procure more documentation do not hesitate to ask for it.
3. Be honest and up front and answer only questions that pertain to your problem.
4. Keep copies / write down all correspondence with the IRS whether verbal or written.

Another area might be to check if there any tax advocates in your area that might provide some free legal consulting.

And perhaps ask family / friends if they have any experience with a situation like this.

And my last bit of advice, for what it is worth......
Take a large breath, try to relax. I know that is not an easy thing to do, but believe it or not, it is not the end of the world.
You're a sharp young guy, you can do this.

Thank you for the advice/link, Vikesrule. At this point, my major stressor is not knowing what I'll actually owe and actually going through the audit process. If I do end up owing the $3400 or whatever it was (minus the ~1 grand I already paid) after all, I obviously won't be able to pay it all at once but I should be able to survive making payments and I seem to recall quarterly payments being an option.

I guess I've always been a person that wants to tackle things directly, and doesn't let people push me around. Although I am used to doing so in a diplomatic way, I do technical support/customer service for a living and often need to defuse explosive situations and turn them into something constructive, or at least defuse them.

I went through an audit in 2006, the year after my divorce and changing employers... contracting my services out for about 4 months threw a red flag, according to the Wausau office.

I had to take 4 years.. the current and 3 prior years of all tax records with me.. also I had to explain what I expected my income for the next couple years to do for my file.. since I expected a pretty significant drop in wages... settling for work in my area instead of moving for a higher income..

It started out as a phone/mail thing which quickly changed to the Wausau (Rothschild) office...

While it wasn't comfortable explaining your income and why things change... with all the records in order it wasn't a horrible experience, but I can think of a couple thousand things I would rather do. lol.

Biggest thing for me.. being I do my own taxes, is what if I missed a tax law here or there... a little bit of the unknown since you hear these stories of how they can bend you over.

If I were you.. with the amount of question they ask, I would consult a tax expert in your area.. a consultation at the very least to make sure you have your records prepared accordingly before the meeting.. since your employer botched your W-2's.

I would approach your HR department with the issues you face because of their error.. they might help pay for the tax advice.

Good luck.. my experience was truly just an audit of why my incomes changed 3 times in a single year and why they were significantly different... Normal.. Higher than normal then significantly lower than normal.

You sound to have a more complex issue.. hopefully it works out without much pain.

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