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AARGH! IRS is teh suckekekekekek!!!

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AARGH! IRS is teh suckekekekekek!!!

Old 08-18-10, 11:40 PM
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AARGH! IRS is teh suckekekekekek!!!

So I get a letter from the IRS tonight telling me that I owe another $5,000+ in taxes. It angers me, so I drink rum, which I only do when I get letters from the IRS or every night, whichever comes first.

Anyway, they show a lot more money reported as income than I did in 2008. Keep that in mind....2008. I look it over and it is pretty simple. I rolled over a decent amount from a SEP IRA to a ROTH IRA, which I would have to them pay income tax on for the rollover. The market tanks, so I decide to do a "recharacterization" which is essentially a "do over" according to their rules, and place that money back into the SEP IRA. So if you rolled over $50,000 and it lost $15,000 in value (now worth $35,000) you can essentially call for a "do over" so you don't pay income tax on $50,000 that is now worth $35,000. Saves you income tax on $15,000 and that doesn't have to be done until the next tax year is due plus extensions (Oct. 15, 2009). So I did all that according to their rules, but they suck at doing anything timely, so they don't know it yet.

BUT here is teh suck. They charge you interest from the day that taxes were due, which is April 15, 2008. So if you didn't have an easy case like me, and actually made a mistake, you owe interest going back over 2 years. They explain that they have to do this according to law, and I don't doubt it. But the consequences are that they have no incentive to actually do anything in a timely manner. In fact, their incentive is to hold off as long as possible. If they wait for 5 years to even inform you, they can collect 5 years of interest from you even though you knew of no problem. WHAT. TEH FUCK?

That is so fucking wrong. Again, no biggie for me as I have a solid paper trail, but that is still so wrong. You should only start to pay interest when they notify you. Sure there are some pitfalls with that, as people then have an incentive to not pay and worry about it later, but I trust people more than the government. How the hell is that ethically okay?
Old 08-18-10, 11:54 PM
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Re: AARGH! IRS is teh suckekekekekek!!!

Sorry it happened to you, but what they did is right. Otherwise people can "borrow" money from the IRS, and don't pay back until they get notified, without penalty or interest.

You know you have more money than the government anyway. Go drink some more rum.
Old 08-18-10, 11:56 PM
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Re: AARGH! IRS is teh suckekekekekek!!!

Personally, I think it is wrong to charge interest before you notify someone that there is a problem. Either get your shit together so that you notify people in a timely manner, or deal with it. There is no industry in the country they would allow to operate like this. Fuck them. I may turn to the Lemmy school of tax reporting.
Old 08-19-10, 12:01 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

Whatever happened to "personal responsibility"?
Old 08-19-10, 12:04 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

I have no problem with it. But if I make a mistake and you don't tell me about it for 2 years? Your bad, not mine. Again, would the feds ever allow a credit card or other lender to inform you about something 2 years later and then demand interest for the last 2 years? Total bullshit. Fuck the government. You want me to be honest? I'll start when you do.
Old 08-19-10, 12:18 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

I both support rum and say "fuck the government"
Old 08-19-10, 12:21 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

Yeah. I knew a guy who made a 4-digit error on his taxes. By the time he was notified, the principal, the interest, the penalty, and the interest on the penalty were well past $20k. The IRS set up a payment plan, but the interest kept accruing at a dizzying rate. He was paying that debt for many years.
Old 08-19-10, 12:59 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

Must be ni...

Wait.

That sucks.
Old 08-19-10, 01:46 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

Originally Posted by kvrdave View Post
Saves you income tax on $15,000 and that doesn't have to be done until the next tax year is due plus extensions (Oct. 15, 2009). So I did all that according to their rules, but they suck at doing anything timely, so they don't know it yet.
I am confused by the last line. The recharacterization should have been shown on your 2008 return, so how can they not know it yet? Sounds like you or your accountant didn't show the trail on the return, so your return isn't matching up with the IRS system due to the 1099-R you got.

Proposed adjustment notices like this always freak people out but they are very common. Yes, you have to deal with a bit of hassle, but in a lot of cases the notice was generated because of how you showed things on your taxes. The best ones are were people forget some large stock sales and they get a notice saying they owe thousands or more when really they mostly broke even on the stocks and have no or little adjustment.
Old 08-19-10, 02:29 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

Yeah, looks like you are right from what I see. I did the recharacterization in Jan '09 and did my taxes the first week of Feb. I'm sure I didn't get the paperwork from Schwab showing it in time to have it on my taxes.
Old 08-19-10, 02:41 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

I think this is where X laughs and calls you an amateur.
Old 08-19-10, 02:52 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

What is really stupid is that I ended up cashing out the SEP IRA ('09) to buy some duplexes in January of this year, so I paid the 10% penalty and income taxes on on the SEP withdrawal. So even if I screwed up, and this were somehow still considered ROTH money or something, I would have a credit from '09 taxes that would effectively make this a wash. But now I have to deal with it.

The past two years I have gotten notices from Social Security wondering what my 2 year old does to warrant a paycheck. I tell them, they drop it, and then they ask me the same question the following year. Same freaking story. Oddly, they didn't ask about it when he was getting paid as a 1 year old.
Old 08-19-10, 03:56 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

Originally Posted by kvrdave View Post
What is really stupid is that I ended up cashing out the SEP IRA ('09) to buy some duplexes in January of this year, so I paid the 10% penalty and income taxes on on the SEP withdrawal. So even if I screwed up, and this were somehow still considered ROTH money or something, I would have a credit from '09 taxes that would effectively make this a wash. But now I have to deal with it.

The past two years I have gotten notices from Social Security wondering what my 2 year old does to warrant a paycheck. I tell them, they drop it, and then they ask me the same question the following year. Same freaking story. Oddly, they didn't ask about it when he was getting paid as a 1 year old.
I would get to a tax professional ASAP or maybe a new one if you have been doing this all with guidance from a professional. There are lots of options in ways to do things with your retirement and cashing it out is one of the worst, unless it is a really down year income-wise. Did you consider doing a self-directed IRA and using that to buy the properties? There would be issues if you want to live in them and complications if you had to get a mortgage, but you would be avoided the penalty and income hit altogether. Also, when you sell the properties, the sale would have been tax deferred.

Also, I would never pay a 2 year old. They can't reasonably do anything for your business and the IRS is right to question it. I am surprised they let it slide for several years; you likely got lucky with your examiner.
Old 08-19-10, 05:17 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

Originally Posted by kvrdave View Post

The past two years I have gotten notices from Social Security wondering what my 2 year old does to warrant a paycheck. I tell them, they drop it, and then they ask me the same question the following year. Same freaking story. Oddly, they didn't ask about it when he was getting paid as a 1 year old.
...once again, you've piqued my curiosity. What exactly do they do? I can only think of a few things a child that young would be doing in the midwest:

coal miner
cotton picker
loom operator
can collector
stamp adherence
Old 08-19-10, 06:11 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

Originally Posted by kvrdave View Post

The past two years I have gotten notices from Social Security wondering what my 2 year old does to warrant a paycheck. I tell them, they drop it, and then they ask me the same question the following year. Same freaking story. Oddly, they didn't ask about it when he was getting paid as a 1 year old.
After some of the stories and pictures of Dave's apartments I bet the kid is a decorator and the places are nicer after the kid's done.
Old 08-19-10, 10:04 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

My beef with the IRS is that you have absolutely no recourse if they say you owe them money and you disagree. They could charge you a huge penalty + interest on 10 year old taxes that you properly paid you would have to pay the penalty. You can't appeal to anyone but them.
Old 08-19-10, 10:59 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

Originally Posted by NORML54601 View Post
I both support rum and say "fuck the government"
Where do you stand on sodomy?
Old 08-19-10, 11:25 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

Our government is making interest income on money that don't belong to them? This is the news?

They have been doing this on bail money since their first arrest ever. The interest on billions dollar of bail has been a pretty significant source of income for our government. You don't see people complaining about it. If people show up in court and follow through on their promise, the bail money should be returned with the interest earned. Oh no, you won't ever see the interest. The government keeps.
Old 08-19-10, 11:40 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

Hmmm...suspicious funds transfers combined with anti-government sentiment: Sounds to me like an attempt to cover up your funding of terrorist activities. Enjoy Gitmo.
Old 08-19-10, 11:47 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

Originally Posted by Lemmy View Post
Keep payin' those taxes, everyone.....I appreciate the free ride.

I made $970,000 in the last 20 years, and have paid about 12K total in taxes, and that's a high estimate; and all of the 12K was between 1990 and 2000, when I made about 300K. Never paid a dime on the rest. More, if you include sales tax, though, 'cuz I sure have bought a lot of shit in 20 years.
Congratulations?
Old 08-19-10, 11:50 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

I had the opposite scenario. I filed an amended 2009 to claim a Casualty Loss Deduction due to flood damage to my house (a process that is BS; one needs to determine fair market value prior to, and immediately after, the loss). I filed in June and got my refund last week. My refund included interest. On what amount and for what time period, i don't know. Does it include interest on the amount i paid in April and now is part of my amended refund? interest on the new refund amount but from what date? i could try to figure it out, but would need to know the interest rate the IRS uses.
Old 08-19-10, 11:54 AM
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Re: AARGH! IRS is teh suckekekekekek!!!

Originally Posted by Lemmy View Post
Keep payin' those taxes, everyone.....I appreciate the free ride.

I made $970,000 in the last 20 years, and have paid about 12K total in taxes, and that's a high estimate; and all of the 12K was between 1990 and 2000, when I made about 300K. Never paid a dime on the rest. More, if you include sales tax, though, 'cuz I sure have bought a lot of shit in 20 years.
Have you ever explained how you do this? Do you get paid in cash or something?

And Dave, what is the tax advantage of putting your kids on the payrole? Just give them the tax exempt gift each year. I think it's $13,000 or $23,000 or something.
Old 08-19-10, 12:01 PM
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Re: AARGH! IRS is teh suckekekekekek!!!

Originally Posted by Lemmy View Post
Keep payin' those taxes, everyone.....I appreciate the free ride.

I made $970,000 in the last 20 years, and have paid about 12K total in taxes, and that's a high estimate; and all of the 12K was between 1990 and 2000, when I made about 300K. Never paid a dime on the rest. More, if you include sales tax, though, 'cuz I sure have bought a lot of shit in 20 years.
wow, you are quite the anti-establishment stud, aren't you? that's all you ever seem to brag about around here.
Old 08-19-10, 12:23 PM
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Re: AARGH! IRS is teh suckekekekekek!!!

Originally Posted by Mabuse View Post
Have you ever explained how you do this? Do you get paid in cash or something?

And Dave, what is the tax advantage of putting your kids on the payrole? Just give them the tax exempt gift each year. I think it's $13,000 or $23,000 or something.
It would be tax exempt to the kids, but Dave has to use taxed money to pay it. If you exceed it, there is a gift tax on top of income tax.

If the kids earn a salary from Dave, it is a business expense to Dave (deductible) and they pay at a low tax rate, assuming their total income isn't much. However, there is a kiddie tax (for which I don't know all the rules, because my kids are grown). If you run afoul of it, the kids are taxed at YOUR rate.
Old 08-19-10, 01:15 PM
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Re: AARGH! IRS is teh suckekekekekek!!!

Originally Posted by Sean O'Hara View Post
Where do you stand on sodomy?
Usually right behind her, it gives me the best angle.

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