On September 28, 2020, I wrote to the IRS about my tax filing for the period ending December 31, 2018. The IRS finally responded on March 23, 2021, and asked for additional 60 days (!!) to respond. Then on April 8, 2021, IRS wrote to say that it couldn’t find the tax return that I had filed. They wanted me to refile. But on February 5, 2021, I had written to IRS and received a transcript of my filing. The transcript which IRS provided shows that I filed my return on April 15, 2019. So I cannot understand why they cannot find the return when they already have a transcript of it.
On April 12, 2021, IRS wrote to say that my account showed an overpayment of $7,215.23 for the 2018 tax period. This was consistent with the tax transcript records the IRS gave to me. In its April 12 letter, the IRS said I would receive this money in 4 to 8 weeks. The IRS sent me two letters on April 15, 2021, confirming that I would receive a refund in 4 to 8 weeks. IRS did not seem to think at this point that it could not find my 2018 return. I am now waiting for my money, finally.
This isn’t the only screwup of which I can accuse the IRS. In 2020 I wrote to IRS as follows:
July 30, 2020
Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0025
Re: Michael T. Hertz, [SS # omitted]
Notice: CP24 Date: July 27, 2020
Dear Sirs:
I received this notice letter from you, which asserts that the only
payments I made totaled $9825.34 against taxes owing of $7,934.00.
You also charged me penalties totaling $224.34. You are incorrect in
both matters.
My IRS record of account shows a payment of $7,956.00 on 4-1-2020
and $1,869.34 on 4-10-2020, which totals the $9,825.34 you credited to
me. But you either completely ignored (or Vanguard screwed up) on
the $5,311.21 sent to you on 11-20-2019 by Vanguard as a payment
against taxes arising from my transferring money from my IRA to my
general account at Vanguard. That would total $15,136.55 in payments.
Actually, I paid $13,267.21 for my 2019 taxes and the $1869.34 was an
estimated 2020 tax payment.
Since I made an estimated tax payment of $5,311.21 on 11/20/2019,
you should reduce the penalties for nonpayment of estimated taxes.
Furthermore, you based the penalties on an estimate of taxes owed of
$26,777.25, which is far too great when the actual tax (according to
you) was $7,934.00. My taxes in 2018 were much higher than in 2019.
I want to also point out that I sent in my return on April 1, 2020, and you
took until July 20, 2019, to mess up. As a result, I was deprived of the
$1,200 which many taxpayers received because of COVID-19. As I
understand it, I didn’t receive this money because my only tax return
available when the money was distributed was my 2018 return, and I
was over the limit on that. But my 2019 return was well under the limit
for receiving the $1,200. So it was the IRS delay which deprived me of
it. You should take that $1,200 and apply it as an estimate to my 2020
taxes.
After recalculating the penalties and giving me credit for the $5,311.21
which you completely ignored, and then paying the 2019 taxes actually
due, you should apply the balance to my 2020 estimated taxes. Then
please advise me what my estimated taxes are, because I want to pay
them in full AS SOON AS YOU PROVIDE ME WITH THE NUMBER. I don’t
feel like being penalized again. Also, please advise me about the $1,200
which I did not receive because it took you 111 days to review my 2019
tax return.
Yours very truly,
On February 1, 2021, the IRS claimed that I hadn’t paid my taxes for 2020. I wrote back as follows:
March 20, 2021
Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0025
Response to IRS letter dated Feb. 19, 2021 (#0547192263)
Dear Sirs:
This confirms a discussion I had with Roger Hanson of Vanguard. Vanguard made a distribution to me from my IRA account and withheld $5311.21 from my account. It issued a 1099-R of which IRS received a copy and confirmed to me its receipt. However, IRS asserts that it never received the money. The money was apparently accounted for by Vanguard to IRS in 2020, during the COVID crisis, so it is possible that either Vanguard or IRS made a mistake. That is, either Vanguard didn’t send the money or failed to provide proper proof that it sent the money, or IRS possibly received the money but didn’t account for it.
I enclose a copy of a letter I wrote to IRS earlier about this [the July 30, 2020 letter above]. As a result of this mess, IRS penalized me for failing to pay proper amounts to them and also did not pay me the $1,200 Economic Stimulus made in 2020. I cannot tell where the fault lies, but obviously, either Vanguard or IRS made some sort of mistake which needs to be corrected.
In closing, I do want to point out to IRS that a substantial amount of my income in 2019 and earlier years was from IRA distributions, and it is a requirement that the tax money on such distributions be withheld and paid. Vanguard knows this and would normally do the withholding and make the distribution. Vanguard filed a 1099-R, which IRS had. So if IRS thought I paid too little to them, they must have checked to see if the money was received. If not received, that would have been caused either by Vanguard or some internal IRS issue. IRS should not have penalized me or kept me from getting the $1,200 stimulus payment by its delay. Instead, according to the enclosed letter, IRS says that my tax account does not show a payment of $5311.21. It should not be blaming the taxpayer if that is the case.
Thanks very much.
* * * * * *
I have never seen such screwing up by the IRS. What is going on? The IRS is withholding money, overcharging, and then keeping me from getting my Economic Stimulus. Meanwhile, I am paying every nickle I owe but am getting penalized. Grrrr!
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