Sorry but my country is US not Argentina
Let me look this up, for you bu the more current version of the bonds are not taxed until cashed in ,,, but it IS possible that the interest may have come due upon maturity
Yes, I was guessing that one :)
Juuuust a sec
sorry I want to get the information from IRS, just another moment
If you deferred interest on the savings bonds until maturity, the interest income was taxable in the year the bonds reach final maturity. The TreasuryDirect Web page, "Treasury Securities that have Stopped Earning Interest," describes the savings bond issued dates that have since matured. When you cash in the savings bond, the financial institution will issue a Form 1099-INT for the interest earnings.
The 1099-INT should reflect the year the interest earnings became taxable -- that is, the year the bonds matured. That may necessitate you amending your tax return for that year, and there could also be an interest penalty levied on top of the income tax due. Talk to your tax professional, or ask the Internal Revenue Service by calling its toll-free Telephone Assistance for Individuals at(NNN) NNN-NNNN
So, first, nothing will happen until you go to cash them in ..... so no need to panick
I see you're typing ... I'll wait
But....the longer we wait, the more we will be subject to the IRS penalty. Right?
That's right ... another tax year, more interest .... Now ...
Here's what you need to do ...
Many of the series did not mature until 2010, you can go to that web.n page I linked and enter the bonds' number to see when they actually mature .... some were extended
For the year they matured, you'll need to do an amended tax return
You'll have plenty of money to pay the tax from having cashed them in
and you should (once you have your ducks in the row, ou'll need to do the returnbnecause that will generate the 1099 from the bank y
sorry for the typos
Now, you ca go to your accountant Or, if you do your own taxes, get turbotax for that year and simply choose 1040X (Amended return) when it first starts and it will ask you the interview questons form there ... and the only change, of course, will be reporting that 1099
Now here's the part you're poabably most interested in
You can ask for an abatement of penalties from IRS based on something called "reasonable cause."
YAY!!!! How do we go about that?
OK, once you print out the return, or get it from your preparer, you'll need to send in the return by mail (I would sent it certified-return reciept) you need to attach a cover letter asking for abatement of penalty dure to reasonable cause
A request for abatement of penalties should include a well-written letter detailing the reasonable cause and documentation supporting the underlying facts
They'll typically grant b ased on wht we would call reasonable circumstances .... "DID NOT KNOW THE BINDS EXISTED UNTIL...., etc)
sorry for the typos .... did not know bonds existed, once we learned we cashed and did the amended return attached,
What I would do is go to a bank and see if one will work with you on getting the 1099 to you within a certain time frame
OK...let me repeat so I'm sure I understand.
Reasonable cause. This is a facts-and-circumstances test in which the taxpayer demonstrates that he or she exercised ordinary business care and prudence in determining the tax obligation, but nevertheless failed to comply. Depending on the penalty, the taxpayer must also prove that he or she acted in good faith or that his or her failure to comply with the law was not due to willful neglect. The IRS determines reasonable cause abatement on a case-by-case basis, treating each tax form and year separately. The IRS often abates penalties based on reasonable cause because of circumstances beyond the taxpayer’s control, such as illness, natural disasters, or destruction of taxpayer records.
oh sorry, go ahead
Cash in bonds....get 1099 from bank...file amended return for year bonds matured...send in letter asking for abatement. Thanks for sending the above explanation for reasonable cause....I think it we move quickly now, we have a good chance of getting the penalty removed. I can also explaint that these were given by his 96 year old mother and that they were in her safe deposit box since 1971.
Yes, I don't ton guarantee, but you are the "poster child" for first time abatement here. Very much out of your control, and no intent ...
Sounds like you have it!
Thanks so much!!!!
You're welcome! ..
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You too, Thanks!