Need Tax Help IRS issue

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garyb1st

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Dec 31, 2010
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Received a $3,000+ refund from the IRS. According to the accompanying letter, the refund is because I used the wrong rate for Capital gains and Qualified Dividends. Only problem is I don't have any Cdapital gains and my Qualified Dividends are minimal. Wasted a half hour talking to an IRS rep who didn't have access to my return and only reiterated what I had already read on the letter. I'm 99 & 44/100% certain I'm correct. What I'm not certain about is whether or not I should cash the check.

So for those of you who are tax professionals what do you think?
 
garyb1st said:
Received a $3,000+ refund from the IRS. According to the accompanying letter, the refund is because I used the wrong rate for Capital gains and Qualified Dividends. Only problem is I don't have any Cdapital gains and my Qualified Dividends are minimal. Wasted a half hour talking to an IRS rep who didn't have access to my return and only reiterated what I had already read on the letter. I'm 99 & 44/100% certain I'm correct. What I'm not certain about is whether or not I should cash the check.

So for those of you who are tax professionals what do you think?
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Who did your taxes? I would either put in a safe place in the house or open an account and deposit it.
 
Your doppelganger must have submitted it.

If you don't cash it its still their money. Don't lose the cheque though. 😁
 
Oldgator73 said:
or open an account and deposit it.
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If there is evidence that the money is not really yours, do not cash. It could cause legal problems. Best not to cash it until well understood what the check is for and that it is really yours.

BTW, I was expecting a refund of $85.00. I got back a refund check from the IRS for $1,785.00. But in my case, I discovered they were right. I made five "quarterly" payments of $1,700.00 into the IRS last year. Two payments in about a week apart. I totally forgot I already made the previous quarterly payment about a week before. I was surprised when I double checked my bank records, and they were correct. I do not recall making the earlier payment at all, but my bank records proved that I did. I didn't notice it until after they sent me the $1,785.00 check and was then looking for such a mistake.

At least we can say the IRS is honest.

-Don- Reno, NV
 
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garyb1st said:
Done them myself for past 60+ years. I've compared my pro-formas to Turbo Tax and they're usually very close if not the same.
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Do mine too. Turbo Tax. I like mine to be between +$100 and -$100. I get $800 back from the state. I got a big check from the government once. Had to do with concurrent receipt for VA disability. I was scared to cash it until I spoke with someone at DFAS.
 
garyb1st said:
Done them myself for past 60+ years. I've compared my pro-formas to Turbo Tax and they're usually very close if not the same.
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Around 40 years ago, I let H&R do my taxes. But one year they made a mistake the IRS caught. I double checked it all and decided I would not have made that type of mistake, and I started doing my FIT myself every year since. The long way at first, using a hand calculator and their charts. I never made a mistake, not counting my previous message, which really was just forgetting. I now use Turbo-Tax as well.

-Don- Reno, NV
 
Within the last 5 years I've gotten federal return correction letters twice. One explained I didn't itemize correctly. But, I didn't itemize. The other was I didn't report alimony correctly - again, I don't pay alimony. I already had gotten the payment via direct deposit months earlier so I don't think it was identity theft or fraudulent return. My take on it is for the dollar amount, I'm not going to spend one minute chasing down someone at the IRS to fix their mistake. If it came down to an audit bring it on, I have all the records.

Mark B.
Albuquerque, NM
 
Are you sure the check is NOT a new scam of some sort? If at all possible, set up a face-to-face, in person meeting with an IRS agent and get answers before cashing. If you cash it, who knows what may happen if it's a scam.
 
We have an accounting firm figure our taxes. Last year the state sent me a letter saying I made a mistake. i took the letter to the firm, who quickly proved to the state it was their mistake. I got an additional return check in 2 weeks.
I had a friend who was an IRS auditor/lawyer. I asked him how many corporations he found cheating on their taxes. This was about 40 years ago. He said; "I make $87,000/year, the corporations pay their lawyers/accountants over $200,00/year, who do you think wins?" They pay their accountants that much to insure their figures cannot be proved wrong.
The last company I and a buddy worked for did the same. My buddy told me he can use the same numbers to prove to me they have not made a profit in the last 3 years, then turn around and use the same numbers to show me the company had made millions every year.
 
Our situation was not a scam, rather our own mistake. However, had we had @DutchmenSport's advice it would have saved us $700 in interest and a considerable amount of grief. In-person advice was far more trustworthy than what we received via phone.
Don't cash the check without first speaking to an agent.
 
Similar happened to me many years ago. At the end of my unemployment, instead of a statement, I received a check for the full amount I had received during my unemployment. Legal advice was to put it in a dedicated account and wait for them to catch up. Having notified the unemployment office of the mistake in writing the day after getting the check I sat back and waited. Over a year later I was sent a notice that I owed principal and interest on the money. The attorney I was working for at the time sent back a reply that being that they were notified that the check was erroneous the day after receipt they were not due any interest. They got their money back and I kept the interest.
 
I would take Martian’s advice. Make a copy of the check and draft a letter describing the situation. Send it to your IRS office certified return receipt requested so you can prove they were notified. Then deposit it and earn some interest.
 
Sending them a certified letter with a copy of the check makes sense. Then I'll deposit the check in a separate account and wait. The experience on the phone with the IRS person was frustrating. He didn't speak english well certainly didn't understand much about taxes.

Thanks for the responses and suggestions.
 
Certainly a Government official is correct in this case. I'd cash it, in an additional checking account I do transactions with, set it aside, and eventually give to a charity.
 
Gary RV_Wizard said:
Then deposit the check and wait.
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Treat an IRS mistake as a bank mistake. That means do NOTHING with that check.

See here.

"First things first, if you notice money in your account that’s not yours, don’t touch it. Don’t spend, don’t give it to someone else, and don’t move it into a different account. "

-Don- Reno, NV
 
Deposit it and leave it as excess. They will eventually follow up with you but them correcting the mistake might not show up until you file next year's taxes. Typically they will only demand the $3k principal back and not demand accrued interest. Happened to me once before and my accountant caught it. He is an ex-IRS accountant and provided good insight into how they work.
 
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