How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask RD Your Own Question

RD
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
Type Your Tax Question Here...
RD is online now
A new question is answered every 9 seconds

CP2501

Resolved Question:

I received IRS form cp2501 last month. i filed my response and have now reveived a letter stating that the IRS will contact me w/i 45 days to let me know what action they will be taking. How much should I prepare to spend in additional tax and should I contact a tax attorney to address this matter? I originally sent all my stuff to file an amended return and my tax guy lost it and never filed the appropriate documents. Any idea where I can turn or advice I can use? I just don't understand why they won't just send me a bill?
Thanks
Submitted: 7 years ago.
Category: Tax
Expert:  RD replied 7 years ago.

Can you provide some details on the matter that was involved in CP 2501.....and your reply?


Customer: replied 7 years ago.
Reply to Renu V's Post: It was an issue with an family trust income that I had received in 04. I originally filed with the knowledge that it was tax free, and then a month later in March was told I had to file an amended return that would include special form numbers to acknowldge the income. I sent the originals to my father's tax guy in California who had orginally set up my late mother's trust and waited to hear what I owed and what his ervices would cost me. A week before the 4-15 deadline I contaced him and he told me he lost all my original paperwork, and said I should just file this on my own. I didn't know what to do since all the peperwork was lost with his office three states away. He passed away four months later and in Oct of 05 his secretary said she found my tax stuff. I asked her to mail it back to me and suprisingly it never got here.
Since i have never filed anything more than the generic 1040 i had no idea what to file or where to turn. As a result the income was never reported and I am now facing this cp2501 to address with an additional 45 day wait that is making me crazy. I have no idea how to address this audit and wish for any assistance you can provide.
Expert:  RD replied 7 years ago.

From your details...it seems like a case of underreported income. What the IRS will do is assess tax on the unreported income, charge additional tax and also levy penalty and interest. Once you get that notice from the IRS, I would suggest you to make the payment asap and also to discuss with the IRS and try to get the penalty waived by explaining the entire situation.


They may not waive the penalty on the ground that you should have tried to get the income details from the trust or from the IRS when you found that the papers were lost but it is definitely worth a try.


Let me know if you have any question.



renu@yashcon.com



Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases.



Customer: replied 7 years ago.
Reply to Renu V's Post: What do you mean by "levy penalty and interest"?
i understand the interest portion but what is meant by "levy penalty"?
Expert:  RD replied 7 years ago.

There is a penalty for not paying the taxes that you owed and also penalty for underpayment of the estimated taxes. This may apply in your case since some of your income was not reported and hence tax on that part of income was not paid.


Let me know if you have any question.



renu@yashcon.com



Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases.


RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience: CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
RD and 2 other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.