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Ask Ed Johnson Your Own Question

Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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I need to get in touch with Ed Johnson an expert who has advised

Resolved Question:

I need to get in touch with Ed Johnson an expert who has advised me recently.
Submitted: 5 years ago.
Category: Tax
Expert:  4ren6 replied 5 years ago.
I have sent him a private message with this link attached. He should post ASAP.
Expert:  Ed Johnson replied 5 years ago.

Maryam,

 

HOw can I help you?

Customer: replied 5 years ago.

Hi Ed,

 

As planned I have posted the documents on Google document view. my email for that account is XXXXX@XXXXXX.XXX and password XXXXX XXXXX you will see on the the IRS notice of Deficiency and my 2005 1099. I would like to ask you how much time you will have to dedicate to this as I am very concerned that I compensate you appropriately - so please make a suggestion and I will add the funds to the account.

best

Maryam

Expert:  Ed Johnson replied 5 years ago.

Since we can not share emails on line here, I will need another user name to access the document. CAn you contact admin admin@justanswer.com and ask for their assistance in getting the user name to me.

 

Is it possible to change the user name for document share from an email to a screen name?

Expert:  Ed Johnson replied 5 years ago.

Maryam,

 

I contacted admin and they said that if you are unable to provide a non-email login, that you can send the documents to them as an attachment and they will forward the document to me.

 

Ed

Customer: replied 5 years ago.

Hi Ed

 

I will do that tomorrow as it is chaotic in London today we are all snowed in and this has not happened in 18 years. I will chat to you then

 

best

Maryam

Expert:  Ed Johnson replied 5 years ago.

Wow,,,,is it global warming?

 

I wait for your reply.

 

Ed

Customer: replied 5 years ago.

it is back to the ice age here!

 

looks like your admin department have sent me a message I will check - I have two pdf files can I just upload them here?

Maryam

Expert:  Ed Johnson replied 5 years ago.

Maryam,

 

WE can not upload PDF's. we can only upload images. (jpegs, etc) Just send them to the admin. It will be easier.

 

Ed

Customer: replied 5 years ago.

Ed

I have uploaded the files on Firemedia.com at your admin department's suggestion

can you let me know if you can see them on this link

 

best M.

 

http://www.mediafire.com/?sharekey=ab074c01345c3fbded24a2875c7fa58e37e03ff592ff94f3c95965eaa7bc68bc

 

 

Expert:  Ed Johnson replied 5 years ago.

This link worked perfectly thanks.

 

I am down loading the documents now.

 

 

 

 

Customer: replied 5 years ago.

Great I am glad we finally got over the first bit.

 

Please do let me know how much time you are spending on this as we need to discuss how best to compensate you for the time.

 

Maryam

 

Expert:  Ed Johnson replied 5 years ago.

Mariam,

 

The download worked fine.

 

Everything looks good.

 

What I now need is to known what the cost basis is. Essentially this would be what you paid for the stocks when you purchased them.

 

Do you have a record of the stock purchases, so I can find out what you paid for them?

 

This was not part of the documents we shared.

 

If you do not know that, then i can use an alternate method if you can tell me the date they were purchased.

 

Also. did you file a U.S. tax return in 2005?

 

If so, do you have a copy of that or at least a transcript?

 

 

Customer: replied 5 years ago.

Dear Ed

 

I do not know when exactly these shares were bought but my best guess would be some time in 1996 or 1997 (I left the US in March 1997).

 

I have never filed any taxes in the US after that date as I have only filed here in the UK. However I did not report those gains in the UK in 2005 as the gains were unrealized and were either reinvested or used to pay down the margin in the brokerage account.

 

Does that help?

 

Best

Maryam

Customer: replied 5 years ago.

Dear Ed

 

I got a message to accept your reply but I did not get a reply after my last message and you still have not told me how much time you are spending on this issue and what is a fair rate to post on the account. Please be assured that I appreciate all the advice and I hope you will also be satisfied.

 

best

Maryam

Expert:  Ed Johnson replied 5 years ago.

Dear XXXXXam,

 

You may be getting some prods like that. The price you have posted is fair enough. Your question is not showing back up in the queue because of age, so we have to be vigilant to keep checking. I just wanted to make sure I was not ommittien any 2005 earned income you may have had in the U.S. during the year in question.

 

I need a tighter window in order to determine when you bought the shares.

 

Do you have any documents or statements from 1996 or 1997 listing what you bought the shares for. I have prepared a trail return, but capital gains is the price you sold stock for minus what you bougth it for.

 

you have some capital gains reported on your 1099-DIV but that appears to be unrealed to the stock sells.

 

If I at least know a month and year of purchase for the stocks indicated as sold, I can estimate the cost basis by using the average market open and close for that month. I can do the same thing if all you can do is pin it down to a quarter (3 month period)...

 

Lehman Brothers as you know is bankrupt, and while there are successor people to handle the accounts it may be hard to pin down with them.

 

My recommendation is to go through your copy the documents you provided to me, and where you sold somthing try to indicate in which month and year or 3 month period and year it was bought.

 

I hestiate to go beyond that. If stock is falling in price, and I average it on the downs, then it would increase your capital gain exposure because cost basis will tend to be lower.

 

let me now what you can do lets keep this window open so we can communicate.

 

By the way: can you remember the name of your account manager when you were with Lehman?

Expert:  Ed Johnson replied 5 years ago.

I got a hold of your investment house yesterday and they are going to see if they have a income statement for you from 1996 and 1997.

 

It is essential so that we can reduce the amount of capital gains. We may even find that you have a loss and wipe out this debt.

Customer: replied 5 years ago.

Hi Ed

Just checking in to make sure our line stays open.

 

I appreciate very much all your time and effort

 

Best regards

 

Maryam

Expert:  Ed Johnson replied 5 years ago.

maryam,

 

Thanks. We are just waiting on feedback from your brokerage to get cost basis of your stocks. I should get that today or tomorrow.

 

Ed

Customer: replied 5 years ago.

The lady who used to cover me was Nancy Carroll but she has left - I really hope you have more luck with them than I did.

 

Maryam

Expert:  Ed Johnson replied 5 years ago.

Not a proble, I will be posting the results soon to the shared link.

 

ed

Customer: replied 5 years ago.

thanks Ed, I am looking forward to seeing what the damage is meanwhile I will speak to my accountant here and explain that I am filing in the US for shares I bought there when I lived there. I understood that you said I will have to file in the UK as well?

 

best

Maryam

Customer: replied 5 years ago.

Hi Ed

Any news from Lehman/Barclay Wealth? I am going to be away on holdiay all of next week so thought I'd check in before I go. I can be reached on eamil as I have my blackberry with me.

 

best

Maryam

Expert:  Ed Johnson replied 5 years ago.

Dear XXXXXam,

 

I spoke to Barklay's today.

 

They do not know if they can get archive statements for 1996 or 1997. The non-archived records only go back to 2000.

 

I will be finalizing the 2005 U.S. returns for you today. AND await your instructions on the next move.

 

The deadline for filng is April 15th, so you still have about a month before we need to panic. It is just that you do not want to file your UK return until you file the U.S. return.

 

The UK taxes world wide income and so yes, you have to file in the UK, but the UK will give you credit for taxes paid to the U.S.

 

Barklays is working on finding your archive record, BUT, they will not release them from me, because I am not on the account or do not have a power of attorney on file.

 

They will release them to you.

 

The person you spoke to no longer works at Barklay's for reasons that I am not alowed to disclose.

 

I spoke to Jessica. She had the record of your converstation two weeks ago, and noted that no one spoke then about archive records. I am not sure if that is true, as every word is not recorded.

 

Jessica said for me to have you contact them at(NNN) NNN-NNNN

 

Make sure you speak to Jessica. Let her know you are the person Ed Johnson spoke to her about, the lady from the UK.

 

Make sure you let her know that you need is any possible archival record of financial statement that shows what you purchased in stocks during 1996 and the first quarter of 1997.

 

THey will email or fax the statements to you, if they can find them at all.

 

Understand that since this was the result of a liquidation of assets thorugh bankruptsy, some of the archival records may not be recoverable.

 

If that is the case, let me know, I wil lfinalize the returns again, up load them to you. through the file share program you used before.

 

Let me know when you have given Barklays one more try.

 

Ed

Expert:  Ed Johnson replied 5 years ago.

Maryam,

 

I have not heard back from you, so I am posting to the shared document links the tax documents I promised you.

 

I picked interrum dates. There was a problem with Medico Health Solutions. You had told me you made all stock purchases between 1995 and 1996.

 

Medico did not exist in the open market until 2003. So for that I chose an average stock price from the moving averages for 2003.

 

For the others I used the moving average between march 1995 and May 1996 to determine cost basis. it is close I am sure from what I can tell.

 

If you are able to get the 1995 and 1996 income statements from Lehman, we can fine tune the results,but I think they are good now.

 

I have uploaded the ones for mailing, and the detailed work sheets for your records.

 

You can take these to your accountant to figure your tax for the UK if you need to.

 

The file labeled RECORDS is for you and your accountant. The other is for mailing as an attachement to you letter response tothe IRS letters you received. Please include a copy of the letters. with your submission.

 

http://www.mediafire.com/?sharekey=d712bdd3dd15ee34ed24a2875c7fa58ee04e75f6e8ebb871

 

Let me know when you down load these so I can remove them from the site. (this is to protect your privacy and safety).

 

The 200 dollar fee is acceptable. Bonuses are appreciated but not necessary.

 

Remember there is a deadline. If you get the information from Lehman, let me know and it will only take a few minutes for me to update the return.

 

Ed

 

Expert:  Ed Johnson replied 5 years ago.

Maryam,

 

A coulple of more followup items:

 

1. If you were married in 2005, we can change your filing status to reduce your tax. Let me know.

 

2. Youi need to add your birthdate to the forms I sent you.

 

3. It occured to me that if you are not a legal permanent resident of the U.S. (Green Card Holder), in 2005, we may have to add a form. let me know.

 

Customer: replied 5 years ago.

Dear Ed

Sorry I did not come back to you earlier. I was travelling last week and had scarce access to internet.

 

1. Medico was issued to shareholders of Eli Lilly or Merck so I did not buy it - it was a spin off.

2.I was married in 2005.

3.I will add birth date to the forms

4. I have not heard back from Lehman/Barclays

5. I was not a green card holder or legal resident of the US in 2005.

 

I will review the forms and chat with you later today.

 

best regards

 

Maryam

Customer: replied 5 years ago.

Ed

Just another question. The IRS had also asked me to pay a fine based on the amount owing - how does that work out now.

M

Expert:  Ed Johnson replied 5 years ago.

Maryam,

 

Super, thanks.. Also what was your marital status in 2005?

 

 

The documents gave you a time to respond by.

 

You will notice that my return showed a lot less tax due even before considering the penalties and interest.

 

So what you are trying to do is respond to the letter with an appeal I will instruct you on writing a letter appeall and including the tax return.

 

The basis of the appeal is that you were unware of a filing requirement because you were a non-resident alien as of the date of the sale.

 

That you had departed the U.S. on (date given)

 

 

You will be asking them to accept and process the return as if timely filed an to abate the interest and penalties.

 

They will either accept your appeal or not. If not they will then rebill the interest and penalties which may be more or less.

 

BUT, they indicated in the letter to accept the charges or file a return. So I am hopeful you will not have to pay that much. BUT unfortunately with the IRS there is never any gaurantee. But for the amount they are assessing it is worth the try.

 

Customer: replied 5 years ago.
Ed
Thanks for this on your question regarding marital status I was married in 2005 what difference does this make?
Customer: replied 5 years ago.
Dear Ed

You asked me to add my birth date on the forms. should I download the files then add the dates and then upload again on to the sight. What else do I need to add?

regards

Maryam
Customer: replied 5 years ago.
<p>Dear Ed</p><p> </p><p>I went through tax returns but have not changed anything yet. Would it be better that you make the changes please? </p><p>My date of birth is 18 March 1963</p><p>My marital status in 2005 was married</p><p>I also noticed that you had entered Eli Lilly under short term capital gains with date acquired indicated as 06 and sold in 05 - I bought this stock in 96 and sold in 05.</p><p>other wise all looks fine and I am happy to send it all off with the letter you suggested. Is there any particular format or wording one should use in the letter or will you be kind enough to do that as well and I will sign and send with the returns.</p><p> </p><p>Once again many thanks for all your efforts and look forward to hearing from you.</p><p> </p><p>Maryam</p>
Expert:  Ed Johnson replied 5 years ago.

Dear XXXXXam,

 

I will make the changes and repost for you. I will be happy to provide some sample lanaguage,but since you are actually filing this yourself, the letter needs to be put into your own words.

 

I am sick right now, but will have this done by tomorrow (friday some time).

 

Ed

Customer: replied 5 years ago.
<p>Dear Ed</p><p> </p><p>Hope you are well and rapidly recovering. I will write the letter and post it on the site for you to approve if that is ok?</p><p> </p><p>Best regards</p><p> </p><p>Maryam</p>
Expert:  Ed Johnson replied 5 years ago.

Sure that is good.

 

 

 

Changing your marital status on the return did not change the tax due, so I left it to match what the IRS said. Adding your husband to the return did not make a difference.

 

You can pick up your files here:

http://www.mediafire.com/?sharekey=d712bdd3dd15ee34ed24a2875c7fa58e3e167d3ba37252f95be6ba49b5870170

 

 

I also have one more form to give you. Let me know when yhou have down loaded the forms.

 

 

Customer: replied 5 years ago.
Dear Ed
I hope you are feeling better.

I have now downloaded the forms and gone through them.

Do you not think I should file by mail as I have to enclose the letters as well?

best
Maryam
Expert:  Ed Johnson replied 5 years ago.

Yes, these have to be filed by mail. They can not be filed electronically.

 

WE have one more form to do. I want you to replace the form 1040 with a form 1040-NR. I will fill that out for you to day and upload it.

 

The instructions in the IRS Cover letter tell you that you should reply by letter and to attach your return.

 

I had computer connectivity issues yesterday. I have been working from Manhattan this week, and we had a big storm that disrupted my remote connections to my office computer.

 

Everything is working well today, so I am able to upload the final document.

 

Ed

Customer: replied 5 years ago.
Thanks so much. so just to recap:
I have to print out the 1044 NR and send to the IRS with my covering letter and their letter and the money order.

let me know when you upload the new form.

Glad you are out of the storm now, I saw the images on TV.

Maryam
Expert:  Ed Johnson replied 5 years ago.

Maryam,

 

When you down loaded the files, one was for filing the return and one was for your RECORDS.

 

Save the one for your records.

 

For the file you down loaded for filing: it contained all the documents required for filing including a form 1040, schedule D, etc.

 

When I upload form 1040-NR, (NR stands for non-resident), you will take out the form 1040 from the packet, and replace it with the form 1040NR, then mail the entire packet that is for filing, along with your cover letter.

 

On the date you sold these securities, you were a Non-resident.

 

In your cover letter:

 

1. Make sure you mention the following. That because of your overseas shipment process back to the UK, orignal institutional financial statements were lost. You attempted to recover the financial statements from your brokerage(name the old name), but because of their bankruptsy operations and transfer of owenrship, they have been unable to recover for you any statements or transactions to indicate the orignal cost basis of the securities represented in schedule D.

 

2. To determine cost basis you used the average of the high and low open and close for the quarter in which you made the purchases. I was unable to determine brokerage fees, so these costs are not included in cost basis.

 

3. Regarding the Medico stock. I used the average and low open and close on the date the stock was transfered to you.

 

 

 

 

Customer: replied 5 years ago.
<p>Great this is very clear. I am just composing letter now and will load it on to the site for you to approve.</p><p> </p><p>M</p>
Expert:  Ed Johnson replied 5 years ago.
Great, let me know when it is posted
Customer: replied 5 years ago.
<p><a href="http://www.mediafire.com/?sharekey=ab074c01345c3fbded24a2875c7fa58ee04e75f6e8ebb871">http://www.mediafire.com/?sharekey=ab074c01345c3fbded24a2875c7fa58ee04e75f6e8ebb871</a></p><p> </p><p>Hi Ed</p><p> </p><p>Please see uploaded on the link above my letter to the IRS please amend as you see appropriate.</p><p> </p><p>Thanks</p><p> </p><p>Maryam</p>
Expert:  Ed Johnson replied 5 years ago.

Maryam,

 

Thanks.

 

I am uploading your form 1040NR today.

 

Just an FYI.

 

Fling the non resident return means that you will not get the standard deduction.

 

If you file the resident return, the IRS will detect it, and will make the correction and assess addtional taxes.

 

My recommendation is to go ahead and pay the additional tax with the non-resident return. If it represents an over payment, the IRS will refund any excess. It is your decision to file the resident or the non-resident return.

 

You will note that the non-resident return has a back page that needs to be filled out by you.

 

The tax liability as a non-resident return is 1,198 dollars.

 

You were a resident when you purchased the shares, but you were a non-resident when you sold them.

 

 

 

Ed

Customer: replied 5 years ago.
<p>Dear Ed </p><p> </p><p>That is fine I am happy to recommend the NR return.</p><p> </p><p>Let me know when you post it on the site.</p><p> </p><p>Did you see my letter? are there any changes you suggest I make to it?</p><p> </p><p>Best </p><p> </p><p>Maryam </p>
Expert:  Ed Johnson replied 5 years ago.

I have down loaded the letter and am making some minor changes. I hope to have the final document prepared today for uploading.

 

 

Customer: replied 5 years ago.
<p>great! am looking forward to finalizing everything today. Once we have done this I will Accept and also elect to pay a bonus and I will contact you on another matter which we can discuss later.</p><p>best</p><p>M</p>
Expert:  Ed Johnson replied 5 years ago.

Maryam,

 

This is the link to the 1040NR and the cover letter with changes.

 

They are the files dated March 06th. One titled 1040NR and the other with the name CHANGE1 in the title.

 

http://www.mediafire.com/?sharekey=d712bdd3dd15ee34ed24a2875c7fa58ee04e75f6e8ebb871

 

The tax calculated does not include any penalties or interest. We are hoping the IRS will abate the interest and penalties. If they do not, expect an additional bill from the IRS for interest and penalties.

 

Do not forget to use the cover page from the IRS notice as part of the return.

 

You have to complete page 5 of the form 1040NR. I labeled it draft becuase you may make an error on page 5 and need to start over. To save time, simply down load a new form from the IRS website at the following link, and copy my figures over.

 

http://www.irs.gov/pub/irs-prior/f1040nr--2005.pdf

 

 

Customer: replied 5 years ago.
Dear Ed

Thanks I am carrying out your instructions and will get back to you later today

Maryam
Customer: replied 5 years ago.
http://www.mediafire.com/?sharekey=ab074c01345c3fbded24a2875c7fa58e37e03ff592ff94f3c95965eaa7bc68bc

Dear Ed

I have downloaded and copied your numbers out on to the form 1040 NR (see above link) and answered the questions on page 5 to the best of my ability . Can you please check if I have answered correctly and what I need to put for question "M".

Do I still use the Schedule D as filled out before by yourself? I have noticed that the amount I have put on (copied on to) 1044 NR is now different to the amount you had put on the Schedule D you sent me previously.

Once I have correctly filled out page 5 I will attach it to Schdule D already filled out by you, sign and send to the IRS with the covering letter and their original letter. Correct?

I also wish to pay by debit/credit card so I assume I have to go to the site you mentioned previously and quote my reference.

I am sorry to be so helpless and dumb but I do not wish to make any mistakes.

best
Maryam
Expert:  Ed Johnson replied 5 years ago.

Dear XXXXXam,

 

You you do not have to apologize, Non-resident returns can be complicated, and when doing it with remote assistance, requires extensive communication efforts.

 

For the 1040NR:

 

1. You will be replacing the form 1040 with the form 1040NR and submit then entire packet that was labled for filing, not the one labeled for record. The for record one contains worksheets that do not have to be mailed in. So you will be mailing in the entire packet, with the 1040NR instead of the form 1040.

 

2. For the form 1040NR.

 

On Line H: indicate the number of actual days instead of the phrase 1 week. 7 days, 8, days, etc.

 

On Line J: indicate 1997, Form 1040.

 

Section M:

 

Country of Tax treaty: indicate United Kingdom, Article XIII, Capital Gains

 

The next bulleted item, (type and amount of effectively connected income exempt). Leave this section blank.

 

The second bulleted item after country of tax treaty, leave it blank.

 

Where it says were you subject to tax in the country indicate yes. Enter a hand written note in the line spacing beneath the entry: (UK Citizens taxed on world wide income, ,this income not yet reported in UK). Also add a sentence to this effect in the cover letter.

 

for cover letter add in: It is my understanding that allthough UK Citizens are taxed on world wide income including capital gains, that the UK. US. tax treaty permits the U.S. to tax the capital gains in this situation. This income has not yet been reported to the UK pending resolution of the U.S. filing requirement.

 

For the part of section M that indicates permanent faciltiy check the box no.

 

For Line P, is this an expat return, check box NO.

 

Which line on schedule D is different.

 

lets get this right.

 

 

Customer: replied 5 years ago.
Ed, the only line that is different in Schedule D is
line 13 capital gains distributions: 2,172 and in 1044 NR line 9a it is 2,171
You have also included 270 in 1044 NR line 13 for which I cannot see a shcedule C.

I have filled out page 5 as per your instructions and I will replace 1044NR with the old 1044 and include the original Schedule D in the final package.

thanks
Maryam
Expert:  Ed Johnson replied 5 years ago.

Dear XXXXXam,

 

The original file should have included a schedule C-EZ for the 270. If it does not let me know. C and C-EZ are the same form, the EZ is a simpler version.

 

The differenence is due to a rounding error in the software. Change the 1040NR to read 2,172.

 

Please look for a schedule C-EZ. If not then I may have to upload it again.

Customer: replied 5 years ago.
ok you have included the C-EZ I will also include it in the final pack to be sent to the IRS. right?
Customer: replied 5 years ago.
Dear Ed

I am ready to send all the material to the IRS - just one final check

1. Cover letter from myself (amended as per your instruction above)
2. Copy of IRS Notice of Deficiency
3. Form 1040NR signed and dated by me only
4. Schedule C-EZ
5. Schedule D and D1
6. Banker's Draft for $1198 ( can I pay on line as per your previous instructions of is it better to draw up a bankers draft)

Am I missing anything?

best
Maryam
Expert:  Ed Johnson replied 5 years ago.

Dear XXXXXam,

 

that is correct.

 

Also include a copy of your biographic page from your passport and copy of your Visa, even though expired.

 

about paying on line: in this instance lets not pay on line.

 

My recommendation to pay on line was to pay the debt if you were accepting it. BUT, if you do not have a U.S. bank, then money orders or paying on line is a better way.

 

What we have done is filed the return in a way to capture the best possible treatment under the tax treaty.

 

The tax treaty in this case does not exclude the capital gains from tax, but provides that capital gains be taxed under U.S. law. That is why we indicated the UK tax treaty in part M, and did not exclude income.

 

We are hoping that they accept the 1,198 dollar tax liablity, or reduce it.

 

what we have done is figured your tax according to what we consider your benefit. The IRS will accept it or refigure the tax. We treated it as if it were a timely filed return.

 

It is my belief they will treat this favorably and accept the 1,198 as we figured it, especially since, if you file this post marked before 15 April, you will have met the cut off befor the 3 year statute of limitations for refunds. This means you will get the full benefit of any tax deductions and exemptions.

 

Your filing status for this return in U.S. tax terms is "married seperate".

 

Unless you have a U.S. bank, I would use money orders or pay on line.

 

 

Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience: GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
Ed Johnson and other Tax Specialists are ready to help you
Customer: replied 5 years ago.
Ed

Thanks for all that. I think my passport may confuse them because I have my married name on there as well and also the L1 visa was in my old passport which expired in 2003. In the UK they take away your old id documents as it is 'Her Majesty's' property!!!

I am accepting this now and I hope the money get to you. Once again thanks for all your great work. I will be in touch as soon as they answer and I also want to discuss my 1099 for for 2008 and so on but I will be in touch.

All the best
Maryam
Expert:  Ed Johnson replied 5 years ago.

Dear XXXXXam,

 

I understand the issue with "her majesty's" passport. So you will not have a copy of the L-1 visa. But you need to still include the biographic page in your passport. It is evidence required to show you are really a UK citizen. (for the tax treaty portion).

 

If you had a copy of the old that would also be good. But if not, that is ok.

 

Attach a note or make a note on the copy to indicate that you were married on date, and your maiden name is______.

 

They will match the date of birth and other information in thier system to match you up.

 

 

Customer: replied 5 years ago.
Ed sorry one last question - I am assuming everything is to be mailed to the address on the Deficiency Notice right?
Expert:  Ed Johnson replied 5 years ago.

Yes, mail it to the holtsville, ny address.

 

Make sure you put the front page on top of everything.

 

Ed

Customer: replied 5 years ago.
I need to get in touch with Mr ED JOHNSON a Global Tax Consultant who advised me in March 2009. Please ask him to get in touch with me regarding a new assignment
Expert:  Ed Johnson replied 5 years ago.

Dear XXXXXam,

 

Hi,

 

What can I do for you?

 

Ed

Customer: replied 5 years ago.
Hi Ed

Thanks for replying.

I have had a letter back from the IRS saying that they have refused the request for penalty adjustment. I have scanned the letter and posted it. please let me know what we should do next I am very confused now.link where you will find the letter is as follows:

http://www.mediafire.com/?sharekey=ab074c01345c3fbded24a2875c7fa58eeeb0ad242f85ee54ce018c8114394287


Please be assured that you will be compensated as before. Many thanks for your help.

Maryam
Expert:  Ed Johnson replied 5 years ago.

Maryam,

 

Thank you.

 

I understand from reading the letter, that they are not accepting the appeal from before.

 

Based on the information provided previously, you still should have had time to file and incurred a lessor base tax. However in so doing, if they accepted the return, they still did not abate the penalties and interest for later filing.

 

This sometimes occurs. Even in situations where a person may have refund or owe no additional tax, they can incur a penalty simply because estimated taxes were not paid timely. In th letter they are stating that in their opinion, the reason they are not abating the penalties and interest is because, again in their opinion, you did not exercise due diligence in this matter. In essence, they are saying that you should have known of the requirement and exercised your responsibilities voluntarily before hearing from them.

 

They tend to take a hard nosed view when dealing with persons from overseas. This is because of the prevalence of tax avoidance by U.S. expats and non-resident aliens.

 

I believe you were confused about the rules and legitimately did not think in your circumstances you would have to pay the tax. But to get that point across to the IRS you may have to file a more formal appeal using a tax attorney.

 

the penalties and interest are significant and are worth while fighting.

 

So while you may have reduced the basic tax due, they are not abating interest and penalties; then in their letter they are allowing you to yet appeal again. In this letter, they are also implying that you should use a tax attorney to file your appeal for you. (or other person authorized to practice law before the IRS...enrolled agent or CPA.). I recommend a tax attorney.

 

In the mean time, they are saying you need to pay the penalties, and if they later determine you were not required to pay the penalties and interest, they will automatically refund them to you; or if on appeal you are determined to be due a refund, or if they decide to abate them based on the facts, you will be refunded them. If you do not pay them, then they will continue to accrue yet additional penalties and interest.

 

So at this point, I in the interest of what we call, "do no harm"; I would have to recommend you pay the interest and penalties; and retain a tax attorney to help you get them reduced or rebated in the entirety.

 

My first recommendation for a tax attorney in the UK, who may able to help would be PWC.

 

I am trying to think of something you could have said in the original appeal that would have helped, but I can not think of anything. It would have been nice for you to have had those financial statements; but even those would not explain away the issue of not meeting prior year filing requirements.

 

If an employer were to write a letter confirming you were not told of your filing requirements, that would be helpful, but most employers would not open themselves up to that kind of admission. (their attorney's would advise them not to make such a statement).

 

A tax attorney may be able to skillfully make such an argument in your behalf. Third party influence of attorney's arguing for you, using legal precedence and knowledgeably citing law can sometimes be more effective.

 

I am surprised they did not abate the penalties and interest because you were still within the 3 year window for filing the return, and your return was a proper return.

 

 

 

Customer: replied 5 years ago.
Ed,
I would really appreciate if you could recommend a good but not too expensive tax attorney to me.

On another subject, I also need to deal with my 2008 tax year as this was the year I incurred 100% loss on my US investments - I will have to gather all the information and send to you as I need to download all my monthly statements etc from Barclays.

M
Expert:  Ed Johnson replied 5 years ago.

Are you able to make a cheap trip to the U.S.? If so what areas would you be staying in. If you had friends you could stay with for a few weeks, I could recommend a U.S. based attorney/firm to you; but if you can not, then I will be limited to a few in the UK. It would be best for a U.S. based attorney. It ends up being cheaper. If I recommend a UK based attorney with PWC, for example, they end up needing to transfer all activities in the U.S. to a U.S. based partner, and there are additional expenses.

 

I would be happy to work with you regarding the 2008 return.

 

 

 

 

Customer: replied 5 years ago.
Ed
You are very kind to give me this advice. I am going to go home and dig up some of the old returns that were made for me by PWC and see if they can help me. I suspect the best solution is to take a recommendation from you and choose a US based attorney.

Meanwhile I have to send them the fine, no? what would the exact amount be? shall I call them to confirm?

I will upload and send all 2008 information as soon as possible.

Best regards
Expert:  Ed Johnson replied 5 years ago.

Dear XXXXXam,

 

I would call them to confirm the amount of the fine; or use the last communication where they billed you for it.

 

Let me know after you speak to PWC what you wish? In the mean time I will seek a U.S. based attorney for you. Will the NYC are be good?

Customer: replied 5 years ago.
Ed
Thanks very much a NYC attorney would do as long as he/she is reasonable with fees.

I will try and upload all the 2008 documents by the end of the week and will get back to you re PWC.

best
Maryam
Expert:  Ed Johnson replied 5 years ago.
I will find you some attorneys to select between.
Customer: replied 5 years ago.
Ed thanks for your help.

Do I really need to file any more taxes in the US as the securities that were sold to pay down my margin account in 2008 were not bought at the time of my residence in the US.

Expert:  Ed Johnson replied 5 years ago.

Dear XXXXXam,

 

If a 1099 was issued, you need to file a return. If no tax is due, because it was a loss, then it becomes an information only return.

 

If there were no 1099, and you had no gains or taxable profits, then you would not have to.

 

Remember what they did to you last time. Even though some of those stocks you sold were sold at a capital loss, because a return was not filed, and a 1099 was issued, then the IRS assumed a zero cost basis and assessed tax on all gains.

 

As you recall, you had to submit a return and actually claim a cost basis to reduce the tax.

 

The same thing can happen again. If a 1099 is issued and you do not submit the return to take advantage of the cost basis, the IRS will assume a zero cost basis and once again ask for a return.

 

I know it is a pain. Our tax panel is actually working on this issue, and the IRS has accepted our suggested solution. At some time in the future, (doesn't help you now), the brokers will be required to place the cost basis on the 1099. It was to have been implemented in 2009, but is not being done yet.

 

When that occurs, then there will be no need to file if you have a loss, unless you will be taking the losses against future earnings.

 

Actually you can carry forwared the capital losses to future years, so you would want to file anyway in case you have future U.S. earnings to offset.

Customer: replied 5 years ago.
Hi there Ed,
I understand and fully agree with you.

I will post the all documents in a new file this afternoon.

I am also trying to get in touch with IRS to make sure I am paying the right amount for the penalty and I will let you know.

Hope the tax attorney can help me to appeal.

All the best
Maryam
Expert:  Ed Johnson replied 5 years ago.

Thanks Maryam.

 

 

Customer: replied 5 years ago.
Dear Ed

You will find all the documents I have downloaded from Barclays Wealth on this link

http://www.mediafire.com/?sharekey=ab074c01345c3fbded24a2875c7fa58e7300ea2ece2478185621d66e282a0ee8

Let me know what else is missing in order to file taxes.

Please also be aware that whatever has been sold has gone to pay margin and Lehman value ended up at zero. I hope I have better luck finding the purchase value of the investments.

Please let me know what you would like to be paid for the work. As usual I appreiciate your help.

best
Maryam
Expert:  Ed Johnson replied 5 years ago.

Maryam,

 

thank you, XXXXX XXXXX downloaded the documents. do not delete them yet.

 

Customer: replied 5 years ago.
Dear Ed

I have received a letter from the IRS saying that they have changed their view, at least I think that is what they are saying can you please confirm and let me know what I should do. I am very happy to send them the $822.24 and end all this.
see this link
http://www.mediafire.com/?sharekey=ab074c01345c3fbded24a2875c7fa58e82d07c92f73884b4b8eada0a1ae8665a
please let me know how much I should post for your very kind and efficient service.
regards
Maryam
Customer: replied 5 years ago.
Dear Ed I have received a letter from the IRS saying that they have changed their view, at least I think that is what they are saying can you please confirm and let me know what I should do. I am very happy to send them the $822.24 and end all this. see this link http://www.mediafire.com/?sharekey=ab074c01345c3fbded24a2875c7fa58e82d07c92f73884b4b8eada0a1ae8665a please let me know how much I should post for your very kind and efficient service. regards Maryam
Expert:  Ed Johnson replied 5 years ago.

Maryam,

 

This document you have received is reducing the total tax by the amount of tax due. While they do not specifically state it, it means that they have accepted our cost basis determination for the stocks that were sold, where we used the average open and close price.

 

They are still assessing the penalty for late filing of the return, and so you still have the 822.24 to pay. Remember the return was filed late, so there would still be some penalty to pay.

 

They based the decision on what the law allows form the information and request you inlcuded in yoru cover letter. The IRS always reveiws these kinds of cases, because you submitted an appeal. The appeal review accepted your explanations, and adjusted your account to the extent of what the law allows.

 

Great job on that cover letter.

 

This should be all you now owe in additional tax.

 

Regarding the fee. I am not allowed to ask for a fee. You already paid for this question. However any bonus is acceptable. All I have done is reviewed the documents and offered an explanation.

 

Regarding the tax documents for 2008. The 2008 return for you is not due until post marked by June 30th.

 

I am on a family emergency and will not be able to work on the documents for you until I return next week. If that is acceptable let me know.

 

 

Customer: replied 5 years ago.
Ed
You are a star - good job on the cover letter to you!!!!!!!! not me.
I will pay the 822 today.

The 08 return can wait and I sincerely XXXXX XXXXX goes well with your family emergency.

Best

Maryam








Customer: replied 5 years ago.
Ed You are a star - good job on the cover letter to you!!!!!!!! not me. I will pay the 822 today. The 08 return can wait and I will compensate for your time then if that is ok.

and I sincerely XXXXX XXXXX goes well with your family emergency. Best Maryam
Expert:  Ed Johnson replied 5 years ago.

Maryam,

 

Thanks for your compliments and feedback.

Customer: replied 5 years ago.
Dear Ed
Please get in touch with me I have to file tax for 2002 .

Many thanks

Maryam
Expert:  Ed Johnson replied 5 years ago.
Dear XXXXXajm,

I am here.   Are all the documents still posted on the website?

Customer: replied 5 years ago.
Hi Ed they should be but I will also post the 2002 1099 which I received today from Barclay/Lehman.

I spoke to a very nice guy in the IRS last night and he advised me to do the following:
1) I need to complete the 1040 NR for the 2002 tax year and send it to the same address in NY
2) I also need to call the collections dept. and tell them to put a delay on my account- I have not been able to do this as there seems to be a technical fault on the line but I will try again tonite.
3)When I send the return in I should write ASFR RECON on the top left hand corner which means return needs to be reconsidered.
I have posted the 2002 1099 on http://www.mediafire.com/?1yj3u4nl23b
Let me know if this is ok

best
Maryam
PS I can post whatever compensation you feel is appropriate
Expert:  Ed Johnson replied 5 years ago.

Maryam,

 

I accessed Media Fire, and all I see is the documents from 2008.

 

I did get your 2002 1099, but I do not see anyother 2002 documentation.

 

(did you file the 2008 return?)

 

I have ran a preliminary 1040NR but we need to get the cost basis for that 1099-B.

 

UIT First Trust: Purchase date and cost basis ....for sale price 21,242.52

UIT First Turst: Purchase date and cost basis for sale price 7,288.52.

 

 

 

 

Ed

Customer: replied 5 years ago.
Hi ED

Thanks

I never filed 2008 as we were going to do it at some point.

I filed 2005 and they finally received payment.

I only posted the 1099 from 2002 so I got the right one.

I bought UIT First Trust for value of around $10,000 in 1998 and sold for $7288.52 in 2002

I also bought UIT First Trust for value of $30,000 in 1999 or 2000 so I assume that was the one I sold at 21,242.52.

I do remember having a loss on both given the timing.
I do not know the exact unit price as this was the top 10 Lehman stock recommendations which were packaged in a trust and sold to clients and employees and I think the stocks changed as and when the recommendations changed. I am not sure if Yahoo or Bloomberg will even have historical prices for these units.

I will be travelling tonite and back on Sunday. Let me know what I need to do next and if you want to file 2008 at the same time.

Best
Maryam
Expert:  Ed Johnson replied 5 years ago.

Maryam,

 

 

This helps for 2002, no problem. I am also traveling today. This is 4th of July Weekend in the states.

 

I can work some on this tonight but will not be able to finish until Saturday or Sunday.

 

I noticed all the 2008 documents were loaded so will put those together for you as well.

 

Ed

Customer: replied 5 years ago.
Ed that is great why dont we resume after the holidays when you are back say next week. Have a great weekend and happy 4th of July. It is also scorching hot in Europe for a change so we are all off to the seaside too.

best
Maryam
Customer: replied 5 years ago.
Hi Ed

I was wondering if you are back so I can file the returns.
Let me know

Best
Maryam
Customer: replied 5 years ago.
Ed,
I also have to file 2007 - the link is here

http://www.mediafire.com/?sharekey=ab074c01345c3fbded24a2875c7fa58ecd68064a6d9ed60dce018c8114394287

I am posting 160 pounds for now and additional bonuses of course. Is this enough do you think?

Best Maryam
Expert:  Ed Johnson replied 5 years ago.

Yes.

 

I am back now. I had some trouble getting reconnected (internet service) from my new location, but am now up and running. I will post the 2002 return today, later in the day.

 

Ed

Customer: replied 5 years ago.
Hi Ed
Welcome back. Did you see I posted some compensation for your time - has it worked? I will also include a bonus.

I also posted the 2007 material.

I will send the 2002 return then figure out the other two (07,08)with you.

best M.
Expert:  Ed Johnson replied 5 years ago.

Your posting of funds is fine.

 

Your 2002 should show no tax due. BUT will let you know the final result when I post it.

 

Ed

Expert:  Ed Johnson replied 5 years ago.

Maryam,

 

This is my portion of the 1040NR for 2002 and

 

Your schedule D for 2002.

 

Let me know if you have any questions.

 

http://www.mediafire.com/?sharekey=d712bdd3dd15ee34ed24a2875c7fa58e98e0142c76ea0b6c5621d66e282a0ee8

 

 

Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience: GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
Ed Johnson and other Tax Specialists are ready to help you
Customer: replied 5 years ago.
Hi Ed

Thanks ED this looks fine except my address which needs to be changed to my present address:XXXXX The Little Boltons, London SW5 0DL - I can't figure out how to do it sorry!

Hope we can get the 07 and 08 done at some point too.

best regards
Customer: replied 5 years ago.
Sorry Ed,
I fixed the address and also filled in 'other information' on page 5 as I had done for 2005. I am sending it off as per the instructions of the IRS agent.
let me know if there is anything else you think I should do.
Best
Maryam
Expert:  Ed Johnson replied 5 years ago.

Maryam great.

 

I am working on the 2007 return. I should be done with it in a couple of days. I apoligze for getting back to you so late, but with the question no longer shows up in the que, and I have to check back to look for it.

 

Ed

Customer: replied 5 years ago.
Ed. Hi I am travelling for a few weeks outside the uk I have filed the 2002 tax return but can't do the rest until 31st July
I will post some moe money to the account to compensate you for ur time

Regards
Maryam
Expert:  Ed Johnson replied 5 years ago.

Maryam,

 

Not a problem. I should be done with both by then.

 

Ed

Customer: replied 4 years ago.
Ed so sorry I have left this for so long. I had some family health issues which needed my full attention and I am now ready to resume where we left off if that is ok with you. I hope you received the last 160 pounds I posted, please confirm how much I have compensated you so far as I would like to post a new deposit.
Were we on the 2007 tax return?
best Maryam
Expert:  bizmatters replied 4 years ago.

Dear XXXXXam,

 

Ed Johnson is temporarily unavailable as he is out on family emergency. He has asked me to take over for him. He has received the payments, and you do not have to pay again.

 

Lets pick up where he left off if you like?

Customer: replied 4 years ago.
Hi I am not sure if you are familiar with my case at all and if you can pick up where ED JOHNSON left off. I am happy to work with you but I need to know how much you know about my case .
thanks
Maryam
Expert:  bizmatters replied 4 years ago.

Ed informed me of your situtation regarding capital gains tax on security sales (stock accounts, etc), and the need to file your returns in order to get penalty and interest payments refunded.

 

I have read the email strings, and was given access to the shared files and copies of your Schedule D, etc.

 

 

Customer: replied 4 years ago.
Ok that sounds great so I will post £160 to get this done and I will contact you tomorrow for filing 2007 etc. Are you happy with that sum.
best
Maryam
Expert:  bizmatters replied 4 years ago.

Maryam,

 

That is more than adequate. I am happy to proceed.

Customer: replied 4 years ago.
Hi
So sorry it has taken so long for me to come back but I have finally posted the funds and am ready to proceed.

I think we were going to file 2007 which Ed was preparing. Has he passed that on to you. I also need to file 2008. But let's start with 2007 and please follow the links below to see the 1099s etc.

I have also recieved a letter/generic form from IRS which requests info about my status in 2005 which I will post as soon as I can reuse my scanner! and send link to you. Do you think I can authorize some one in the US like yourself to speak to the IRS about my filings etc. this may clarify things.

As for further information I only started working in June 2007 after 2 years of being on maternity leave from May 2005 and I did not have to file anything in the UK as I was not earning anything. For the period June 2007 to Dec 2007 my total income was 40,000 pounds. hope that helps.

let me know if you need more info.

Best Maryam


http://www.mediafire.com/file/3z2dxd2jzix/2007 Consolidated Form 1099 (1).pdf

http://www.mediafire.com/file/jdezhpyuxnt/2007 Consolidated Form 1099 (2).pdf

http://www.mediafire.com/file/xz0yvem4mjy/2007 Income Statement 1.pdf

http://www.mediafire.com/file/zajvdygduyy/2007 Income Statement 2.pdf
Expert:  bizmatters replied 4 years ago.

Maryam,

 

I can help you with the preperation of the returns at the same level that Ed had done. Because of site rules, which we agree to in order to use the site, we can not create a personal business relationship outside this venue. This means I may not represent you before the IRS.

 

When you use our services, the information you receive and any assistand with preperation of returns, is one level of valuable service.

 

Representation before the IRS is one or two levels higher. It usually works better to have someone in person to represent you before the IRS rather than filing your own, or to file your own and have a representative defend your position befor the IRS. Because of our relationship here, I can not do that for you. BUT, I can refer you to organizations and practitioners who can.

 

Let me know if you still want me to proceed. I have been in contact with Ed and he has briefed me.

 

In the meantime, I will reveiw your posted documents.

Customer: replied 4 years ago.
Hi

Please go ahead and prepare the 2007. I will see if I will need a rep after I have filed my 2007 and depending on how much penalty they want.

many thanks

best
Maryam
Expert:  bizmatters replied 4 years ago.

Maryam,

 

Thanks I will let you know when the documents are prepared.

Customer: replied 4 years ago.
Hi
sorry have not been in touch to follow up since your last message. Sadly my mother passed away in early October.
Please let me know what we need to do next.
best
Maryam

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