DailyAfirmation (dailyafirmation) wrote,
DailyAfirmation
dailyafirmation

Excited about getting some of my own, overpaid, money back...

~Thursday~  At the end of July, I received a notice from the IRS that a discrepancy had been found in my 2010 income taxes. As it turned out, I had a taxable event—four of them to be exact—take place in my investment account that I—wrongly—thought was a tax-sheltered event.

The net of the audit was that they said I had an extra $8,295 of income that I didn't report, for which I owed an additional $1,945 in taxes, along with an $88 interest penalty, for a total of $2,033.

I noticed right away that they counted all $8,295 as income, because that's what I sold them at, but they had $0 listed as the cost basis for them. So, I provided the cost basis and recalculated the taxable gain I actually had on them, which was only $4,245.

I applied the same tax rate, and interest penalty rate, that they had applied to the $8,295 to this new number, and sent them a check for—ironically—$1040, instead of the $2,033 that they wanted.

Shortly after I sent that check, which was on August 15, 2012, I realized that using the same tax rate they used was not correct. Because they had had no purchase date, they had assumed that they were short-term investments, when actually I'd held them for 7 years, making them long-term investments, which get taxed at a lower rate.

So, ALL THAT IS TO SAY, I have been expecting something from them thanking me for still over-paying and refunding some of that $1040. Purely guessing, I had hoped to get around $350 back.

So, I was pleased to find this in my mailbox today:


Needless to say, I signed that sucker in a New York minute and put it back in the mail.
Tags: audit, irs
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