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Jax Tax
Jax Tax, Tax Attorney
Category: Tax
Satisfied Customers: 1408
Experience:  JD, LL.M in Business and Taxation, IRS Enrolled Agent. Expert in Business and Tax Transactions
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I recently received a Request for Your Tax Return, IRS Notice

Resolved Question:

I recently received a "Request for Your Tax Return," IRS Notice CP-59, regarding my 2009 Tax Return. I learned from my tax preparer that it may NOT have been sent, and that I owed over $10K to the IRS ("due 4/15/10"), this is NOT an IRS Letter 1618 where taxpayers have only 10 (ten) days to respond, but I need some advise ASAP - especially, if & how I should handle a call to the IRS. Please advise.
Submitted: 5 years ago.
Category: Tax
Expert:  Jax Tax replied 5 years ago.

Jax Tax : Welcome to JA. I am here to help.
Jax Tax :

First. File the return ASAP. There are penalties for late filing that continue to accrue. You need to mail the return as you can no longer e file a 2009 return.

Jax Tax :

You can include IRS for 9465 asking for a payment plan for the amount due. I would assume that if the amount on the return is $10K, it is close to $15K by now with penalties and interest.

Jax Tax :

1. The amount due- The best thing to do is to pay it. Interest will continue to compound daily retroactively from the original due date of the return. Pay the full amount as soon as possible to avoid owing more. If you cannot pay, and the total balance is under $25K, send IRS form 9465 as soon as possible to avoid the IRS taking collection action and filing a tax lien. The payment requested must pay the amount due within 60 months. If you cannot afford that, you need to complete IRS form 433F. The IRS will set a payment based on your financial ability to pay but will file the lien.

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2. Penalty- You can file IRS form 843 to request the IRS remove the penalties. You will need a good reason for not including the income on your return, and you have a better shot if you pay the amount in full first. If approved, the IRS will refund the penalty that was paid.

3. Interest- The IRS will remove interest that has been charged on penalties if they remove the penalties. Otherwise, their is not method of requesting the reduction of the interest.

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Note: Do not file an Offer in Compromise attempting to settle the debt. It will take 6 months to 2 years to process while interest continues to acrue only to be rejected. Then you owe twice as much. I would not take such steps without great representation.

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I hope this helps. If so, please accept so that I receive credit. Feel free to comment as well. If you have further questions, please let me know.

Customer: replied 5 years ago.
OK, and from $10K to $15K ? wow 50% in interest, fees, penalties - seems like (illegal) usury.... how much can they charge ?
Expert:  Jax Tax replied 5 years ago.
I think usury went out the window about the time capitalism cam in, but you are right. 5-6% interest compounding daily and up to 50% penalty. You need to pay what you can now, and put the return in the mail yesterday.
Expert:  Jax Tax replied 5 years ago.
Was I right about the retiement account? How old are you, what did you pay with the money?

It makes the 843 very important. If you are in a State with tax, you may want to take a look at it too.
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