1. Forum
  2. Usenet
  3. MISC.TAXES.MODERATED

  • Substantial Tax Understatement Penalty Waiver

    From Big Brother@21:1/5 to All on Sat May 7 10:44:36 2022
    Not having any dealings for 50+ years with the IRS other than filing
    taxes each year I now find myself receiving a nice letter last Thursday
    stating I owe $7559 in tax and interest plus $1453 for a "Substantial
    Tax Understatement Penalty" for the tax year 2020.

    BACKGROUND

    Father passed away in April 2020 and I open up a brokerage account with
    one of the majors to deposit proceeds from the estate.

    End of year tax statements from this account were set-up to be notified
    to me via email.. I don't recall setting it up this way but its neither
    here nor there at this point.

    Tax forms from all of my other brokerage accounts are sent to me via
    U.S. Mail.

    As as result, I didn't report the income from the estate proceeds.


    I agree with all the numbers the IRS furnished on their letter and will
    be paying the tax owed plus the interest.


    QUESTION

    Are the arguments as stated above stand a chance for a waiver of the
    penalty ?

    Is there a Form I complete or should I call the IRS ?

    Any other assistance would be appreciated..

    Thanks

    Rich

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

    --- SoupGate-Win32 v1.05
    * Origin: fsxNet Usenet Gateway (21:1/5)
  • From Stan Brown@21:1/5 to Big Brother on Sat May 7 18:02:42 2022
    On Sat, 7 May 2022 10:44:36 EDT, Big Brother wrote:

    Not having any dealings for 50+ years with the IRS other than filing
    taxes each year I now find myself receiving a nice letter last Thursday stating I owe $7559 in tax and interest plus $1453 for a "Substantial
    Tax Understatement Penalty" for the tax year 2020.

    BACKGROUND

    Father passed away in April 2020 and I open up a brokerage account with
    one of the majors to deposit proceeds from the estate.

    End of year tax statements from this account were set-up to be notified
    to me via email.. I don't recall setting it up this way but its neither
    here nor there at this point.

    Tax forms from all of my other brokerage accounts are sent to me via
    U.S. Mail.

    As as result, I didn't report the income from the estate proceeds.

    I think the IRS would argue that it's your responsibility to get
    statements for income, or at least to obtain the figures and include
    them on your return. The mythical "ordinary reasonable and prudent
    man" would know what accounts he has, and take steps to obtain
    missing information.

    I agree with all the numbers the IRS furnished on their letter and will
    be paying the tax owed plus the interest.

    Are the arguments as stated above stand a chance for a waiver of the
    penalty ?

    I think not, but there's no downside that I know of to requesting a
    penalty waiver, and you might get lucky. Your chances are better if
    you've never had a penalty waiver before.

    Is there a Form I complete or should I call the IRS ?

    Unless things have changed, you do it by letter. The letter you
    received should explain what to do if you disagree with the IRS's
    findings.

    --
    Stan Brown, Tehachapi, California, USA https://BrownMath.com/
    Shikata ga nai...

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

    --- SoupGate-Win32 v1.05
    * Origin: fsxNet Usenet Gateway (21:1/5)