Filing Means Never Having To Be Who You Say You Are ... A Tax Story

My story, corporate edition.

My income comes from a variety of places, including a small business that is set up as an S Corp., meaning that as the owner (or shareholder) in the business, the Feds allow the income to flow right through to my personal tax return. The city of New York, however, doesn't recognize S Corps. so I am subject to double taxation from them -- annoying enough.

I file my corporate return with them by March 15 (when it is due) every year. I did this year, and mailed a check on time with some taxes owed. Yesterday, however, I received a notice of tax due, and a bill, saying I hadn't paid. They tacked on a penalty and interest. So I checked with my bank -- and the check I sent them cleared a few days after I sent it.

The instructions said that if I had a dispute, I should e-mail documentation to a generic e-mail address that was provided. I did and sent a copy of the canceled check, and just received notification that it is going to be reviewed by a tax auditor. Lovely.

 

How'd this work out for you Ragu?

I got a notice from the IRS myself this spring saying I hadn't paid $xxK in taxes last year, which gave me a bit of a shock as my CPA had calculated that I'd drastically overpaid my taxes last year. Only when I dug into it did I realize a Fortune 500 company had accidentally used my EIN on a 1099 that should have been made out to another company.

Got them to re-issue a correct 1099 and sent it off to the IRS--just got confirmation a few weeks ago that the issue was resolved.

But I definitely remember when I first opened that letter just standing there in shock and wondering why my CPA was so far off and how was I ever going to come up with the money--it was significantly more than we normally keep in our savings account.

 

I am not sure how it worked out for me. I e-mailed them the canceled check, as I said, and wrote something to the effect of, "Please bring what I owe down to $0 and remove any penalties." I got an e-mail back saying, "It's been forwarded to an auditor." That was a month and a half ago. I haven't heard anything since. Nothing by e-mail, nothing by mail.

 

It wasn't the IRS. It was the NYC department of finance. I didn't give anyone access to my business checking account, so that isn't a problem -- although I am top of what goes in and out of there, so if anyone made unauthorized withrdawals somehow, I'd know, regardless.

If the scam were to somehow have intercepted the tax return and tried to get us to send what we already paid to a false address. ... well, that doesn't seem like a scam with much likelihood of success. How many people would repay taxes they already paid without asking questions?

Regardless, it was official. Where it came from, the mailing address they gave for correspondence, and the e-mail address they gave -- I was communicating with a nyc.gov / department of finance e-mail address.