Financial Information
IRS says that I owe over $7,000 from last years taxes, due to misinformation. I used H&R Block, what do I do?
Question : IRS says that I owe over ,000 from last years taxes, due to misinformation. I used H&R Block, what do I do?
The issue is income that I earned from selling investment stocks. The money came from a life insurance policy. The H&R rep that we used is a family friend. She stated that I did not need to show that income, only the interest earned. There was no interest due to the short time it sat in the stocks. Anyway, we used friends and family, so I don’t think that the Audit Protection will help us. What do we do? We do NOT have that kind of money nor can we afford to repay it at all.
What I did was with that life insurance policy purchased stocks. Then right after I purchased the stocks I lost my job and need to pull out money from those stocks (it probably only accrued little if any interest) They are showing that each withdrawl I made as income.
tax audit protection
Best answer:
Answer by v b
Okay, so you have a CP2000.
The CP2000 tends to generate heart attacks due to the fact the IRS uses $ 0 as your cost basis.
1. If someone died and left you an insurance policy, at the time you got the money, it was “tax free” and only the interest it had generated before you collected it was income. (So far so good.) (If someone didn’t die, then it’s a different issue.)
2. What you did with the money is the issue. If you bought stocks, no big deal as you certainly were allowed to, but you apparently SOLD some and then didn’t put the sales on the tax return. Did you forget to take the 1099-B statements to the preparer?
Put together a schedule D. Find your buy documents (to show what you paid) and fax the schedule D and the buy documents to the AUR unit.
The gain should be fairly small compared to the CP2000 total.
Note, if you do in fact have a CP2000, you DO NOT fill out a 1040X. Just send in the schedule D with the page that says you do not agree with some of the changes. Sending in a schedule D slows things down.
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#3 written by acmeraven 1 year ago
This is where H&R’s intensive two week training course for tax preparers gives me a headache. Okay, you have to fill out and file an amended 1040X return; you need to fill out a Sch D; whereupon you put down the date and purchase price of said stocks and the date and sale income. If you had a loss then you will be entitled to a refund; if you had a a gain it will be taxable. The problem comes from the IRS receiving a 1099B form from the stockbroker showing the gross amount you received from the sale of the stock; you now have to provide the other half of the equation–what did you pay for the stock to determine if you had a profit or loss? This is a fairly routine and fixable mistake so don’t get upset over it or anything. Good luck & Merry Christmas.
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#4 written by Bob F 1 year ago
Even with a Friends and Family return, you have their standard guarantee. That gives you audit assistance (not representation, as you correctly surmised.) With audit assistance, they will help you prepare for the audit. The audit in this case is just a reply mail back to the IRS. Let your friend at Block help you with that, or if you would rather have somebody else, just go to one of their office that is open (not all are yet) and show them the CP2000 or other letter and explain what is going on and get their help in replying.
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Contact IRS at the phone number provided or re-read your letter from IRS to know what steps you must take to report the under reported income. The department that is working your case is better qualified to help you correct the error, calling them will be easier to resolve your tax issue. They will let you know exactly what forms they are requiring you to file, more than likely you may need a Schedule D.
At this time you don’t owe, IRS is giving you time to respond to them, if you don’t respond with in the time they are giving you then IRS will assess your account and then of course you will owe.
Once you have resolved your issue if you still owe IRS, then download form 9465 Installment Agreement request, divide the amount you owe by 60 months and that is the minimum monthly payment IRS will accept.
Good luck! don’t ignore IRS.