Crazy tax bill

[Number Six]

I don't know where these types of problems belong since I am no protester.

So I got a whopping tax bill last week from the IRS for $64K for last year. I was having a sleepy guy who works from HR Block do the tax preparer work out of state because he charged around $200 to do it vs. a CT HR Block guy who charged $450. He did not put the paypal income on the right line, I was thinking and no W2 from paypal was included as he did not ask me for that nor does paypal send those out as you are supposed to download them from their site (if you know where to look). I declared more income than the HR Block guy recommended and took fewer deductions on my hobby business where I am lucky to clear $10-$15K. Heck, if I worked in all the deductions I am entitled to I would probably be able to get it closer to zero. I have records going back over 20 years. I was doing the income as capital gains and not self-employment and the HR Block lady I saw a few days ago who is also a tax lawyer said that was not the way the law works on income. Also she said there was an income figure into the millions entered as a gross for 2013 somewhere, which is outrageous since I live on a shoe string budget and have limited means.

What is the best course of action here? And is there any way to report incompetent tax preparers?

[Hyrion]

What I would do:

• 1) Get all appropriate documentation together along with my copy of the tax filing for the years identified in the assessment.

Note: If whoever filed my taxes could not provide me with a copy of the filing (and I would have found this out up front) I'd never - ever - go through them again. I always-without-exception keep a copy of my tax filing. I understand in Canada it's for 7 years, but because of how I have my filing system structured, I keep 10.

• 2) If you can afford it, speak to a tax attorney about the filing along with the assessment.

If necessary (in other words, if you've found an error on the assessment or there's something you don't understand):

• 3) Arrange a meeting with the tax man to go over the taxes.

• 4) Arrange a payment system to pay off any outstanding taxes assessed.

With regards filing a complaint against that particular tax accountant: I'd take care of that after. The outstanding taxes has top priority and the final official tally can be very powerful when provided with copies of the original and re-assessed filings to the appropriate watchdog (whether ombudsman, associating accounting regulations, whatever).

[fortinbras]

ummm ... if the sleepy guy was doing your taxes in the name of H&R Block (as distinguished from doing it off the books as a favor to you and some unshared payment to him), then H&R must do its best to straighten things out for you, amend your defective return, explain the error to the IRS, etc., even though you used an H&R guy from out of state.

If this guy was not doing this on the H&R books, then it's just you and him -- and he doesn't get off the hook if he signed the papers as your tax preparer -- to straighten it out. If he left you high and dry by not signing and just ghost-writing your tax papers, and his sense of honor or responsibility is inadequate to the situation, you may have to do this by yourself (fix his wagon on Halloween).

[LaVidaRoja]

There are (I think) two possibilities.
1. There was a notice of audit that you did not receive/respond to and this is the 2X4 alongside your head to get your attention.
2. This is a "math-error" notice. Everything is based on what was already reported on your tax return.
If #1, contact the issuing office, and make arrangements to provide the documentation for the audit.
If #2, contact the issuing office, ask them for a full computation, then go back to either the guy who did your return or your local year-round H&R Block office (If the return was done under their imprint) to explain their "error" to you and the IRS. BTW - Block "guarantees" that they will pay and interest and penalties if it is THEIR computational error. Of course, if it is based on something you did not present to them, it's your fault, not theirs.

[Number Six]

Since HR Block has been doing all my tax filing for 5 years or so with my providing all relevant documentation, hopefully they will pay for the corrections/amendment by their people. Nothing was hidden and there was little in the way of net income so I should have little to worry about.

[Number Six]

The issue was resolved through amending the filing according to what the IRS wanted with no additional taxes due, though as usual it took many months.

[fortinbras]

HR Block is supposed to stand behind its work and even pay any interest and penalties resulting from its own errors. You should get in touch with the local HR Block and see what they will do to help you.

[Number Six]

Some of their franchises are "company owned" and others are not; that was the problem as it was explained by the company owned office that handled the amendment in terms of their responsibilities and methods. They charged me less and I did not have to pay anything extra in taxes, interest or penalties at this point, but you never know.