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I received a letter from the IRS in which indicates I owe

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them a certain amount of...
I received a letter from the IRS in which indicates I owe them a certain amount of money. After I checked and compared my files with my forms (w2-1099, etc). I figured out that the information must be included it in, my report (but for some unknown reason is not...). However, as I filed my taxes with Turbotax in 2010, I don't remember why they are not there. So it looks like there is not possible appellation in my case, and I would have to pay them what they say I owe. DO YOU THINK IS THERE ANOTHER LEGAL TOOL I CAN USE IN MY DEFENSE? such as an involuntary act or lack of knowledge.. Please give me some help. Beside that most of the amount is based on securities sales, how are they base the tax on that sale?
Submitted: 5 years ago.Category: Tax
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Answered in 9 minutes by:
7/2/2012
Tax Professional: DanielleCPA, Certified Public Accountant (CPA) replied 5 years ago
DanielleCPA
DanielleCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 794
Experience: Years of Experience in Business & Personal Taxes
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Welcome and thanks for your question!

Sorry to hear you are in this situation.

The IRS will have assumed all of the proceeds from the security sales is gain. They are basing the tax off the gross proceeds.

Since you state most of the amount due relates to security sales, your best option will be to amend your 2010 tax return to report the sales and their related cost basis. Since reporting the cost will drastically reduce the gain (or maybe create a loss depending on the cost), this will greatly reduce the amount of tax that the IRS is saying you owe. Be sure to include any other additional income the IRS reported if you do not dispute it. If you do not have records of your security sales (you should have received a Form 1099-B from the brokerage firm), you will need to contact the brokerage firm.

Lack of knowledge or involuntary act will not get you out of owing tax to the IRS on the income. If after you file an amended return, you still owe a significant amount of tax, it may get you out of paying some of the penalties (if the IRS is assessing any) but you will still be responsible for the tax and any interest charges on unpaid tax.

Please let me know if you need additional clarification and I will gladly assist you. If not, then I ask you to please give my answer a positive rating. Thank you!
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Tax Professional: DanielleCPA, Certified Public Accountant (CPA) replied 5 years ago
Hi Washingtonian, I noticed you rated my answer "poor service." Did you have any additional questions or need any further assistance? I will gladly help you in any way I can if you are not fully satisfied.

I understand that I may not have given you the best news, so if that is reflected in your rating, I politely ask you to please reconsider rating my answer at least a "3" as the answer is what it is and even if it is not good news does not mean I provided you with poor service.

Again, if you needed further assistance, please use the "reply" button and I will gladly answer any follow-up questions you may have. Thanks and have a great night!
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DanielleCPA
DanielleCPA
DanielleCPA, Certified Public Accountant (CPA)
Category: Tax
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