Do I Need Tax Atternoy – Irs Problem..same Question Again More In Detail?
- on 12.13.09
- IRS Tax Problems
- 3 Comments
- Cash Today
- Bad Credit
hi,
I got a letter from IRS that i owe them $25,000 from 2007..I had $27,000 worth of shares wich i still own them.now they are saying my income is $87k,and i need to pay #25,000 tax including pently,and interest..
how much attorney charge roughly?and how long does it take to settle my case? and do i need to go with attorny all the time or just one time i have to go?
Additional Details
I owe 400 shares of morgan stanley worth $27,000 in 2007..and then market down the drain and rite now worth $9000…i got letter from IRS that my broker reported $87,000 in 1099. which i didnt show because i thought you have to report only capital gain and loss…now i dont understand that how $27,000 worth of shares get $87,000….I checked my 1099 on my brokerage account website which shows $87000,….i dont know how they get that amount..i never had that much amount of money in my life…..
more in detail…i opened my account in sept. 2007..i trade twice and made ($1942),,and on my third trade after i bought stock market down the drain and i still have 400 shares…
Reply to the IRS letters before the due date. You may be required to amend you tax return; File form 1040X and report the share transactions.
IRS has computed your tax on $87,000 assuming 0 basis, no all $87,000 is profit.
You do not need a tax attorney. You need a tax professional who does such cases.
Read http://taxipay.blogspot.com/2008/04/list…
Those 3 trades are the problem.
You bought, you sold. (proceeds #1)
You bought, you sold (proceeds #2)
You bought, you sold (proceeds #3)
The same money, 3 times can make $29,000 of assets look like $87,000. Since the schedule D for 2007 was missing, the IRS said fine, cost basis = $0. So your your gain of $1942 looks like gain of $87,000.
Get out your records. find the page showing the purchases and the purchase price. Fill out a schedule D and fax it into the AUR unit (the number in upper right hand corner of the CP2000 notice).
The $1942 of gain is probably only tax, penalties and interet of $600.
Wow, a free $87,000.
If they weren’t your sales, whose were they?
Someone may be trading in your name, I would contact the broker to see if the money is an “accident” or not. You might want a good CPA to go over the records, just to be sure it was you or not.
Tax resolution, the same. File an amended return. But straighten out with the broker first. If it is the broker’s mistake, you need a “corrected” 1099. If it is identity theft, you need to report that, too.
If everyone thinks it your money, take some out (better, take it all out and switch brokers) and pay your taxes.