Dallas Real Estate and Short Sale Blog

The Dreaded Notice from the IRS

The Dreaded Notice from the IRS - How $5 Saved Us $2340

I dropped by the office last week to pick up my mail. As I sorted it I came across the letter that can bring tears to your eyes…a letter from the Internal Revenue Service (IRS).

I opened the envelope and found a nice letter informing me that we failed to file our partnership return on time and they had accessed a penalty of $2340! What? We always take care of our taxes and required filings.

As I read the details, it appeared they had charged us $195 per partner per month since April 2011. I pulled the file and found the extension we filed along with the US Postal Service receipt and tracking number when we mailed it in to them. I tried to pull up the confirmation number on the USPS website to get a delivery receipt but the older data is not available online.

I called a CPA friend of mine. He told me this was common and to send them a letter with copies of the extension and the mailing receipt. I told him that the USPS Delivery Confirmation is no longer online. He told me to go to the post office and file the required form to get a copy of the delivery receipt just in case the IRS comes back and requests delivery proof.

This was the first year we started using Priority Mail for delivery of documents to the IRS and spending the $5 will wind up saving us $2340.

Lessons learned. First, always use a delivery method where you can track receipt of documents to the IRS. Second, print out and save copies of the delivery confirmations so you’ll have them just in case…

Photo: Licensed from iStockPhoto

 

Tom Branch and Gina Branch, The Branch Team with RE/MAX Dallas Suburbs, service the greater North Dallas suburbs including Dallas, Plano, Allen, McKinney, Frisco, Lewisville, and Carrollton.  While Gina concentrates on traditional listings and buyer/tenant representation, Tom specializes in assisting distressed homeowners to avoid foreclosure.  Tom and Gina have published two books (Achieving Rock Star Status and The Field Guide to Short Sales) and are available for speaking engagements in the greater Dallas - Fort Worth Metroplex. Subscribe to The Branch Team Blog.

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Copyright 2009-2012 - The Branch Team
The Branch Team - Texas Real Estate Broker 547597 | Team Members are Texas Licensed Real Estate Professionals
Tom Branch - National Mortgage Licensing System 341963 

Important Notice: The Branch Team with RE/MAX Dallas Suburbs is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.

All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental.

Protected by Copyscape Web Plagiarism Tool

12 comments • Tom Branch | Broker, CDPE, SFR, ACRE | Plano TX Ambassador | 214-227-6626 • November 07 2011 05:23AM

HR4646 - Debt Free America Act

HR4646 - Debt Free America Act

Here's an interesting new bill introduced by Congressman Chaka Fattah (D-PA). It appears to call for a one percent transaction tax and the eventual elimination of individual income tax. 

According to the Congressional Research Service, the Act proposes the raising of sufficient revenue from a fee on transactions to eliminate the national debt within seven years and the phasing out of the individual income tax. The Act:

• Amends the Internal Revenue Code to impose a 1% fee, offset by a corresponding nonrefundable income tax credit, on transactions that use a payment instrument, including any check, cash, credit card, transfer of stock, bonds, or other financial instrument.

• Defines "transaction" to include retail and wholesale sales, purchases of intermediate goods, and financial and intangible transactions.

• Establishes in the legislative branch the Bipartisan Task Force for Responsible Fiscal Action to review the fiscal imbalance of the federal government and make recommendations to improve such imbalance.

• Provides for expedited consideration by Congress of Task Force recommendations.

• Repeals after 2017 the individual income tax, refundable and nonrefundable personal tax credits, and the alternative minimum tax (AMT) on individuals.

• Directs the Secretary of the Treasury to: (1) prioritize the repayment of the national debt to protect the fiscal stability of the United States; and (2) study and report to Congress on the implementation of this Act.

Click here to read the entire bill.

It's an interesting concept although it appears to add substantially to the tax liability of Americans through 2017.  It's basically a National Sales or Value Added Tax.

What are your thoughts on such a tax? Clearly it would impact homes sales as the one percent tax would have to be paid on the sale or purchase of real estate.

 

Tom Branch and Gina Branch, The Branch Team with RE/MAX Dallas Suburbs, service the greater North Dallas suburbs including Dallas, Plano, Allen, McKinney, Frisco, Lewisville, and Carrollton.  While Gina concentrates on traditional listings and buyer/tenant representation, Tom specializes in assisting distressed homeowners to avoid foreclosure.  Tom and Gina have published two books (Achieving Rock Star Status and The Field Guide to Short Sales) and are available for speaking engagements in the greater Dallas - Fort Worth Metroplex. Subscribe to The Branch Team Blog.

Follwo Us on Facebook          View Our LinkedIn Profile         

Copyright 2009-2012 - The Branch Team
The Branch Team - Texas Real Estate Broker 547597 | Team Members are Texas Licensed Real Estate Professionals
Tom Branch - National Mortgage Licensing System 341963 

Important Notice: The Branch Team with RE/MAX Dallas Suburbs is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.

All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental.

Protected by Copyscape Web Plagiarism Tool

2 comments • Tom Branch | Broker, CDPE, SFR, ACRE | Plano TX Ambassador | 214-227-6626 • September 22 2010 01:48AM