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  1. #1

    Default $75,283 Taxes Owed for 2006

    I was late filing for 2006 taxes, of course my fault. I filed late and my taxes owed were $52,000. CPA filed for me and sent off my initial payment of $10,000. I had no official payment arrangements with IRS, but, thought I would have a little time to arrange official payment arrangements.

    I am in compliance with all other years.

    CPA recieved a letter on my behalf today saying total 2006 taxes are now $75,283.

    I was 100% honest on 2006 taxes and the $52,000 owed was not questioned. My question is , could this extra $23,000 be just failure to file fees and compunded interest ? Seems like a lot if that is the case.

    I do not think I would qualify for an offer in compromise, I am relatively young and have decent future earning potential. However, I am in the Real Estate business and this past year has left me struggling with a certain further decline in income through 2009. I do not trust the companies on TV who say they can get you paid with pennies on the dollar.

    CPA had my power of attorney and says the next letter will be an intent to levy, I don't have much right now, so, not too concerned about that. She also feels they will issue me a federal tax lien, again, out of my control if they do.

    I am not trying to avoid the original taxes, but, the extra penalty is beyond my ability to ever pay , just looking for anyone who may have any advice or have possibly been in a similar circumstance.

    State of Florida

    Thanks to anyone who responds !

  2. #2
    Join Date
    Apr 2007
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    Il.(near StL,Mo.)
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    Default Re: $75,283 Taxes Owed for 2006 - Florida Need Advice

    Quote Quoting luckyinflorida
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    My question is , could this extra $23,000 be just failure to file fees and compunded interest ?
    It certainly could be. What did your CPA say?

  3. #3
    Join Date
    Dec 2007
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    Ohio
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    Default Re: $75,283 Taxes Owed for 2006 - Florida Need Advice

    I do not trust the companies on TV who say they can get you paid with pennies on the dollar.
    There are lots of reputable tax lawyers out there who don't advertise on TV who are perfectly capable of handling your case. Get the phonebook out and find one (who perferably is an ex IRS agent/employee) who you can consult with. This is just my two cents worth but it worked for me. Maybe your CPA has a recommendation or two.

  4. #4

    Default Re: $75,283 Taxes Owed for 2006

    CPA is requesting a breakdown from IRS of how they arrived at the figure. I did find a local ex IRS agent who will take the case. He has told me straight up that I do not qualify for any "breaks" which is ok.

    He will try to have the penalty removed and just deal with the original tax amount, no guarantees.

    Thanks for your time.

  5. #5
    Join Date
    Jul 2007
    Location
    Florida
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    Default Re: $75,283 Taxes Owed for 2006

    For each of the first five months you are late in filing the IRs assesses a 5% failure to file penalty. Therefore, after 5 months you have a penalty of 25% of what you otherwise would have owed. That alone could account for nearly $13,000 of the additional amount. Then there is interest and any other penalties that are due. I could easily see how they arrived at $23,000 in additional charges.

    If you have significant income the IRS has no incentive to compromise. They will, however, work out a payment plan.

  6. #6
    Join Date
    Oct 2006
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    15,274

    Default Re: $75,283 Taxes Owed for 2006

    Quote Quoting Bubba Jimmy
    View Post
    For each of the first five months you are late in filing the IRs assesses a 5% failure to file penalty. Therefore, after 5 months you have a penalty of 25% of what you otherwise would have owed. That alone could account for nearly $13,000 of the additional amount. Then there is interest and any other penalties that are due. I could easily see how they arrived at $23,000 in additional charges.

    If you have significant income the IRS has no incentive to compromise. They will, however, work out a payment plan.
    You also need to realize that with an amount due that is that high, the IRS is going to be really agressive with levying. They can levy your bank account, your real estate commissions and any other source of income/assets/cash that they can find for you.

    Its truly critical that you get an installment plan set up with them, so that they are not levying you.

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