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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16538
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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In 1989 I sold a home in CA I had only owned one year. A 1099

Resolved Question:

In 1989 I sold a home in CA I had only owned one year. A 1099 reflected the full sale price as income and my accountant did not file my taxes properly to reflect the true capital gain. IRS and CA Franchise Tax Brd assessed income taxes and when I tried to correct the mistake IRS refused to accept a corrected tax return. They said the statute of limitations to file had passed. It's now 2013 and the IRS statute of limitations to collect passed a number of years ago and I'm not longer being required to pay an amount I had disputed.

I am returning to California and will be taking up residency again after 30 years. I still have my 1989 records to prove my true captial gains on the home. Can I expect CA TFB to forgive the incorrect assessment with proof this many years later? Or will I have to continue to live with the stigma of an unfair assessment?
Submitted: 2 years ago.
Category: Finance
Expert:  Megan C replied 2 years ago.

MyVirtualCPA :

Thank you for your question, and thanks for using JustAnswer.com. Thanks for requesting me directly

MyVirtualCPA :

If you actually filed a tax return for 1989, then the statute of limitations has passed and you will not be held liable for the excess tax.

MyVirtualCPA :

However, if no return was filed, they could come back still this many years later and assess the tax.

Customer:

Both tax agencies filed liens in 1994 for taxes in excess of 150,000 including penalties. I was unaware of the liens until after the statue to file had passed. The problem was that they would not accept an amended return to reflect the correct tax for 1989 and the IRS just released thier lien a few years ago. Will California do the same?

MyVirtualCPA :

There's a 20 year statute to collect tax once it's assessed

MyVirtualCPA :

So, if it has been 20 years since they first assessed that tax, then they can no longer collect

Customer:

So California filed the lien in 1994. The statute will be up on in 2014 on the same date?

MyVirtualCPA :

Yes, that is correct

Customer:

Is there anything I need to do to have them release the lien?

MyVirtualCPA :

No, they should do so automatically. IF they don't you would contact them and let them know that the 20 year statute has ran

MyVirtualCPA :

IS there anything else that I can assist you with today?

MyVirtualCPA :

If there's nothing else I can assist you with today, please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today

Customer:

Thank you.

Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16538
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 2 other Finance Specialists are ready to help you
Expert:  Megan C replied 2 years ago.
Thanks, TB for the opportunity to assist. If you would, please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today.

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