Taxes in 2018 owe a huge amount of money?

[Roy&Chanel 109]

Hey guys, I'm wondering if any of you faces the same situation before could help me with this.

I have received my 10 year greencard in Sept 2019, and I recently filed for 2019 Taxes married jointly, I am not working and have not started working yet but will soon after my health recuperates, my USC spouse is working though, and we had no issues with it. We used TurboTax software to file.

 

Here comes the problem, today we received a mail from IRS stating that in 2018 I have owe a whopping of 5k taxes and asked us to pay right away. 

We have filed for 2018 taxes and during that time my USC spouse did not make much money, basically just hit little over poverty guideline. We paid taxes in 2018 but it appears that they said its a "readjustments" to the taxes.

As one section says: "This section tells you what income information the IRS received about you from others including your employers, banks, mortgage holders,etc) This information doesn't match the information you reported on your tax return. However the salary part is correct..we both has no other investments.

 

I am suspecting that it is because I have brought in some cash from my country given by my parents and banked into my US bank account. I do not have any foreign banks that exceeds 10k /investments or foreign income.

Can this be the reason why they're charging us more than what we should pay?

If yes, is it possible that I can provide them proof from my parents testifying the funds are actually a loan to support me until I have found a job?

I'm not sure how this happens but 5k of taxes owe is ALOT to me. Again, we did file jointly for 2015 - 2019 taxes and paid accordingly.

 

I'm calling the IRS on monday to figure this out, I really can't afford to pay that much now. Its insane!

 

Thanks in advance guys.

Edited February 29, 2020 by Roy&Chanel

[MariaR323 199]

That same letter you received will tell you exactly what the adjustment was for. However, yes, you can call the IRS to have them explain it over the phone better. I recommend to call first thing when they open customer service or really late, about 1hr before they close.

[Roy&Chanel 109]

50 minutes ago, MariaR323 said:

That same letter you received will tell you exactly what the adjustment was for. However, yes, you can call the IRS to have them explain it over the phone better. I recommend to call first thing when they open customer service or really late, about 1hr before they close.

So I looked into the adjustments, by looking at it, the salary I filed is correct, and they said that there is a whopping difference, (which they calculated from employer/financial institutions as it states) which makes no sense. So I guess it is the cash money that I brought in and they probably thinks its income. I'll call them and see how it goes. Makes no sense to pay that much when our income is low. Thanks for the tip, definitely going to call them early.

Edited February 29, 2020 by Roy&Chanel

[Wuozopo 4,290]

3 hours ago, Roy&Chanel said:

So I looked into the adjustments, by looking at it, the salary I filed is correct, and they said that there is a whopping difference, (which they calculated from employer/financial institutions as it states) which makes no sense. So I guess it is the cash money that I brought in and they probably thinks its income. I'll call them and see how it goes. Makes no sense to pay that much when our income is low. Thanks for the tip, definitely going to call them early.

Going to let my wife answer you because she had a similar experience—

If the bank reported anything to the IRS, they would have sent you the same report as a Form 1099 for your taxes. Did you get anything something from the bank? My bank provides tax documents (1099s) online for 3 years so if you access your account online, you ought to be able to find those. Or call the bank so you know if they were the source of the extra reported income. 
 

My experience came a year after filing my former in-laws taxes. I know the IRS form letter  you are speaking of. It clearly stated the source of the money in question so you should already have a clue of a bank name. Now at that time, granddad was approaching 90 and looking back was in the early stages of dementia. He had the same sources of  pension, Social Security, and 1099s from two banks year after year, and turned his tax documents over to me to do his return. The name provided by the IRS was an unfamiliar bank out of New York (he only had local banks in Texas.) so I started with that NY bank. Bottom line, it was a 1099 tied to a NY investment company somebody at one of his local banks had talked him into during that tax year. The 1099 wasn’t even sent until March, a month after his taxes had been filed, and with his failing memory he didn’t even recognize it as a tax document when he received it. So Part 1 (Bank) solved. Granddad had indeed earned $1012 in interest he forgot about.

 

Looking at the IRS letter and their recalculation of his taxes, it became clear to me that IRS had used $11,012 as the extra earnings. Somebody at IRS had entered an extra “1” making their redo $10,000 off. That letter had several options to check off...things like “I agree and am enclosing the extra taxes due.”  It didn’t have the option to say “I disagree because the IRS made a $10,000 data entry error.”

 

Next—- Phone call to the IRS to a most annoying agent. He wouldn’t talk to me without granddad’s permission. Hand the phone to granddad who said yes, you may speak to my daughter-in-law. The agent kept saying (4 times) he didn’t say all the words exactly. (Geezuz man, he’s 90 years old!!) I literally had to write the exact sentence the man wanted him to say on a notepad and have him read it to the agent so he wouldn’t leave out a word.  Annoyance #2 was when we finally talked about taxes, the agent would not acknowledge the $10,000 error or even consider it. He kept saying the money had to be paid. I argued with him 25 minutes and insisted on speaking to his supervisor which he refused many times. Finally the supervisor came on the phone and I explained from the top that yes, granddad failed to report $1012 but not $11012. She said “Oh, we have made a $10,000 data entry error”.  It took her 30 seconds to see the error. Her solution was that she would send it back to be reworked so don’t pay anything until they send a new letter with correct calculations.
 

Lesson learned is don’t give up until you have your questions answered. The IRS can make mistakes, but getting them to admit that might take a long time and repeating “I wish to speak to your supervisor” for about 10 times. Start with the bank if you think the error is in something they reported.
 

 

[QueenOfBlades 224]

@Roy&Chanel

 

I assume your parents are giving you the money through something like PayPal? Like you didn’t physically bring currency through the border? 
 

How much have your parents provided you with, for how long, and is it a loan or a gift? Are they regular payments? What is their aggregate value over the year?

 

I wonder because you say you “brought it in with you from your country and banked it in your US account”. A lot depends on how it was brought into the country also. If it was cash through the border and above $10,000, it should have been declared and filed with FinCEN. If you deposited $10,000 in cash into your US bank, they would have been required to report it to the IRS within 15 days and also are obligated to contact you in writing by Jan 31 the following year advising you they filed form 8300 regarding your deposit. There are other requirements that trigger that reporting with regular $10k+ deposits because it looks suspicious. Enough of it could trigger an audit. 

If the gifts aggregated to over $100,000 in one year, you’ll need to file Form 3520.

 

Gifts from foreign persons aren’t taxable in general, and the 3520 is just a reporting form. But as I said, there are a lot of variables here. Before you go after the IRS for their mistake, I would recommend taking a little time to review what happened, what has been filed, the things that perhaps should have been filed, and go from there. Without a form 3520 or 709, they’ve no way of knowing the money was a gift. If you did deposit it as cash, it’s just a wad of money that wasn’t reported and you’ve no proof it came from overseas, so I don’t know how that would go really. If the money was transferred electronically from your foreign bank and has continued to be from your parents bank, it’s much easier to prove it was a gift from a non-US person. 
 

Cross every t and dot every i before giving tons of unnecessary information on the phone to the IRS. Don’t take any of them lightly, ever - USCIS, IRS, any of them. Owing back taxes affects your chances at citizenship, so just be mindful in moving forward.

 

Good luck.

 

[Wuozopo 4,290]

@Roy&Chanel

 

Can you explain what you said further?

 

I am suspecting that it is because I have brought in some cash from my country given by my parents and banked into my US bank account.

 

Did you bring it yourself in cash bills on your person into the US? 
Was it in a foreign currency?

Was the value more than $10,000 in US money?

Is your bank deposit of that money the amount your IRS letter states?

 

i

 

 

[Roy&Chanel 109]

On 2/29/2020 at 8:23 AM, Wuozopo said:

Going to let my wife answer you because she had a similar experience—

If the bank reported anything to the IRS, they would have sent you the same report as a Form 1099 for your taxes. Did you get anything something from the bank? My bank provides tax documents (1099s) online for 3 years so if you access your account online, you ought to be able to find those. Or call the bank so you know if they were the source of the extra reported income. 
 

My experience came a year after filing my former in-laws taxes. I know the IRS form letter  you are speaking of. It clearly stated the source of the money in question so you should already have a clue of a bank name. Now at that time, granddad was approaching 90 and looking back was in the early stages of dementia. He had the same sources of  pension, Social Security, and 1099s from two banks year after year, and turned his tax documents over to me to do his return. The name provided by the IRS was an unfamiliar bank out of New York (he only had local banks in Texas.) so I started with that NY bank. Bottom line, it was a 1099 tied to a NY investment company somebody at one of his local banks had talked him into during that tax year. The 1099 wasn’t even sent until March, a month after his taxes had been filed, and with his failing memory he didn’t even recognize it as a tax document when he received it. So Part 1 (Bank) solved. Granddad had indeed earned $1012 in interest he forgot about.

 

Looking at the IRS letter and their recalculation of his taxes, it became clear to me that IRS had used $11,012 as the extra earnings. Somebody at IRS had entered an extra “1” making their redo $10,000 off. That letter had several options to check off...things like “I agree and am enclosing the extra taxes due.”  It didn’t have the option to say “I disagree because the IRS made a $10,000 data entry error.”

 

Next—- Phone call to the IRS to a most annoying agent. He wouldn’t talk to me without granddad’s permission. Hand the phone to granddad who said yes, you may speak to my daughter-in-law. The agent kept saying (4 times) he didn’t say all the words exactly. (Geezuz man, he’s 90 years old!!) I literally had to write the exact sentence the man wanted him to say on a notepad and have him read it to the agent so he wouldn’t leave out a word.  Annoyance #2 was when we finally talked about taxes, the agent would not acknowledge the $10,000 error or even consider it. He kept saying the money had to be paid. I argued with him 25 minutes and insisted on speaking to his supervisor which he refused many times. Finally the supervisor came on the phone and I explained from the top that yes, granddad failed to report $1012 but not $11012. She said “Oh, we have made a $10,000 data entry error”.  It took her 30 seconds to see the error. Her solution was that she would send it back to be reworked so don’t pay anything until they send a new letter with correct calculations.
 

Lesson learned is don’t give up until you have your questions answered. The IRS can make mistakes, but getting them to admit that might take a long time and repeating “I wish to speak to your supervisor” for about 10 times. Start with the bank if you think the error is in something they reported.
 

 

Hi Wuozopo, thank you for such great information. We are still trying our best to reach IRS, unfortunately, we have been trying to call them for past 3 days, they kept telling us that they will get back to us by calling us but no avail.

 

So here are my two assumptions since there is no information on the letter, only thing that states is "differences that we filed, we are missing a whopping $$ of income".

So back in 2018, my husband had a job change twice, hence there are 2 W2s, however, I believe it is either they have calculated as TWO INCOMES per year, basically x2. OR It also can be the reason that I have banked in US dollars into ATM machine without depositing through bank. I remembered back in the days when I first arrived in 2015, I banked in via deposit in person and they made me filled a form, my monies were "federal withheld" for a period of time, a % of money were taken out and I had to deal with that issue. And nope I did not file for any forms online or in person.

 

Getting on the phone and contacting them is tough, I have to just keep trying. There is actually a deadline to response, if I do not pay up, I will have to end up with more penalty.

[Roy&Chanel 109]

On 3/1/2020 at 11:08 AM, Wuozopo said:

@Roy&Chanel

 

Can you explain what you said further?

 

I am suspecting that it is because I have brought in some cash from my country given by my parents and banked into my US bank account.

 

Did you bring it yourself in cash bills on your person into the US? 
Was it in a foreign currency?

Was the value more than $10,000 in US money?

Is your bank deposit of that money the amount your IRS letter states?

 

i

 

 

So I brought US dollars more than 10K and declared at customs. I did not deposit into a bank in 2018, I went straight into an ATM and deposit it.

On 3/1/2020 at 2:28 AM, QueenOfBlades said:

@Roy&Chanel

 

I assume your parents are giving you the money through something like PayPal? Like you didn’t physically bring currency through the border? 
 

How much have your parents provided you with, for how long, and is it a loan or a gift? Are they regular payments? What is their aggregate value over the year?

 

I wonder because you say you “brought it in with you from your country and banked it in your US account”. A lot depends on how it was brought into the country also. If it was cash through the border and above $10,000, it should have been declared and filed with FinCEN. If you deposited $10,000 in cash into your US bank, they would have been required to report it to the IRS within 15 days and also are obligated to contact you in writing by Jan 31 the following year advising you they filed form 8300 regarding your deposit. There are other requirements that trigger that reporting with regular $10k+ deposits because it looks suspicious. Enough of it could trigger an audit. 

If the gifts aggregated to over $100,000 in one year, you’ll need to file Form 3520.

 

Gifts from foreign persons aren’t taxable in general, and the 3520 is just a reporting form. But as I said, there are a lot of variables here. Before you go after the IRS for their mistake, I would recommend taking a little time to review what happened, what has been filed, the things that perhaps should have been filed, and go from there. Without a form 3520 or 709, they’ve no way of knowing the money was a gift. If you did deposit it as cash, it’s just a wad of money that wasn’t reported and you’ve no proof it came from overseas, so I don’t know how that would go really. If the money was transferred electronically from your foreign bank and has continued to be from your parents bank, it’s much easier to prove it was a gift from a non-US person. 
 

Cross every t and dot every i before giving tons of unnecessary information on the phone to the IRS. Don’t take any of them lightly, ever - USCIS, IRS, any of them. Owing back taxes affects your chances at citizenship, so just be mindful in moving forward.

 

Good luck.

 

They're not regular payments, its a gift to support me as I wasn't working back then during AOS. The amount is more than 10k but less than 100k, I have declared it at customs while bringing them(US dollars) in but did not fill up FinCEN form. I guess because I deposited into ATM machine instead of in person at that time, it is highly possible that they probably think it is an income. I actually have kept the original bank withdrawal slips from my parents' bank accounts and letter information given by my parents that the monies are a gift. 

 

I'm trying to provide IRS the information and documents that I have but currently, reaching out to them is tough, gonna keep trying.

There are only 2 possibilities, either they think my spouse had two jobs at the same time for a whole year, or it could be the cash deposits.

Edited March 5, 2020 by Roy&Chanel

[Wuozopo 4,290]

@Roy&Chanel
The IRS receives notification of income received based on social security number. They don’t “think” somebody might have had two jobs. They go by what is reported from the employers. 

An employer reports on a W2

Contractor work is a 1099-MISC

A bank reports interest on a 1099-INT

An investment might be on a 1099-DIV

Pensions, IRA distributions, get reported on 1099-R (not that you have those yet)

 

The IRS computer matches up what was reported to them on your two SSNs and what you reported on your tax return. The gift money shouldn’t be reported to the IRS as taxable money, but if it earned interest that’s on a 1099., That’s why I said check with the bank to find out the amounts they reported as interest for 2018. Look at all the copies of W2s and 1099s you should have saved and see if you forgot to list one on your tax return.  Add them all up and see if they total Line 6 Total Income. If you didn’t save those copies, then lesson learned going forward.  
 

Without seeing the letter and numbers I can’t do much but guess, but 2+2 ought to add up to 4 if you saved the things from every employer and every bank or investment. The only experience I have had told the name of the bank that reported money that my father in law missed. I’m puzzled why yours says income but doesn’t say who paid it. Good luck. 

 

Edited March 5, 2020 by Wuozopo

[Roy&Chanel 109]

18 hours ago, Wuozopo said:

@Roy&Chanel
The IRS receives notification of income received based on social security number. They don’t “think” somebody might have had two jobs. They go by what is reported from the employers. 

An employer reports on a W2

Contractor work is a 1099-MISC

A bank reports interest on a 1099-INT

An investment might be on a 1099-DIV

Pensions, IRA distributions, get reported on 1099-R (not that you have those yet)

 

The IRS computer matches up what was reported to them on your two SSNs and what you reported on your tax return. The gift money shouldn’t be reported to the IRS as taxable money, but if it earned interest that’s on a 1099., That’s why I said check with the bank to find out the amounts they reported as interest for 2018. Look at all the copies of W2s and 1099s you should have saved and see if you forgot to list one on your tax return.  Add them all up and see if they total Line 6 Total Income. If you didn’t save those copies, then lesson learned going forward.  
 

Without seeing the letter and numbers I can’t do much but guess, but 2+2 ought to add up to 4 if you saved the things from every employer and every bank or investment. The only experience I have had told the name of the bank that reported money that my father in law missed. I’m puzzled why yours says income but doesn’t say who paid it. Good luck. 

 

Talked to IRS, they are missing one of the W2s and yeap they did say its a miscalculation (on their end), instead of 6 months in between where my spouse changed his job. We just need to send them another copy. At least it isnt the cash issues. It is really strange that if they're missing one W2 how would they calculate and added a whole year of x2 pay into it and states the differences. Anyway all we need to do is to send them another copies of W2s, they said they have "miscalculate" it. Don't worry I have all copies of documents, withdrawals, copies of tax returns way back to 2015. Thanks to the filing process. Im just hope I won't be getting any issues for 2019. *fingers crossed*

Edited March 6, 2020 by Roy&Chanel

[Wuozopo 4,290]

1 hour ago, Roy&Chanel said:

Talked to IRS, they are missing one of the W2s and yeap they did say its a miscalculation (on their end), instead of 6 months in between where my spouse changed his job. We just need to send them another copy. At least it isnt the cash issues. It is really strange that if they're missing one W2 how would they calculate and added a whole year of x2 pay into it and states the differences. Anyway all we need to do is to send them another copies of W2s, they said they have "miscalculate" it. Don't worry I have all copies of documents, withdrawals, copies of tax returns way back to 2015. Thanks to the filing process. Im just hope I won't be getting any issues for 2019. *fingers crossed*

(Mrs. Wuozopo) I told you they make mistakes. At least you got someone that owned up to it without refusing to listen to you for 30 minutes. Glad it’s sorted.

[Ryan H 3,798]

**Thread closed to additional discussion per request.**