"Arthur Kamlet" <kamlet[at]panix.com> wrote:
- quote -

Red has made it clear to those who read the tax newsgroups
that when you get a questionable or clearly undeserved check
from IRS you should not just cash it and wait to see if IRS
catches their mistake. For his service to IRS in getting the
word out, I would think that it would be appropriate if he
received a one-time reprieve on the penalty. For IRS, it's
cheap advertising.

AK
penalty.

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Red Scholefield <redscho[at]bellsouth.net> wrote:

- quote -

You make it cound like this is all the IRS' fault, when you
deposited a refund check they mistakenly calculated and sent
to you.

So you had use of the money, and are disputing penalty and
interest assessed.

You really should have returned the check when it was
received and explained at the time they made an error and
asked them to correct the refund of pay the balance due.

At this point, you are disputing the penalty assessed but
not the interest since you had use of the money. I would
guess you should be able to find a sympathetic ear, but the
IRS is not bound to abate such penalty. However, for PR
reasons, and "customer relations" reasons, and for plain old
equity, I would guess you can persuade someone up the line
to abate the penalty.

But please be clear, they have already examined you file
once and did not abate the penalty aso there are no
guarantees.

If you strike out with Ms Shah, your next step is to bring
in the Office of Taxpayer Advocate to request abatement
based on the generation of the refund check being their
error, even though depositing it and allowing it to remnain
in your account so long is on you. And if you still do not
receive satisfaction, you c ould pay the penalty and sue as
a small claim tax court case, but would be on very shaky
ground from what you have told us.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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July 31, 2003

Transcript of conversation with IRS office in Atlanta.
IRS representative Ms. Shah ID 0704369 (English is not her native
language)

Situation: IRS made refund 6/02 based on decimal error they made in entering
data from taxpayers 1040 for 2001. Refund repaid 3/03, with interest set by
the IRS.
Penalty assessed is being disputed.

Transcript: (After representative identified herself)

Taxpayer: My problem is that I have been trying to get in touch as
instructed by the IRS with Mr. Michael Bergman at this number.

IRS: Yes, ah . . .He is our branch manager and we are authorized for . . .to
take his calls.

Taxpayer: You are authorized to take his calls? Thank you. (Some difficulty
in understanding accent at first) I am calling in regard to a letter that I
sent to him in response to several letters, mainly a notice of deficiency,
the latest letter I got. Do you need some numbers from me?

IRS: I need (unintelligible) and social security number.

Taxpayer: Social Security number is AAA-BB-XX . . . .

IRS: AAA?-

Taxpayer: BB . . . . .

IRS: Yes. . .

Taxpayer: XXXX ( slowly)

IRS: OK, hold a second . . . . . . . . . . This is regarding your 2001?

Taxpayer: Yes mam.

IRS: OK? For security and (unintelligible) for some information.

Taxpayer: gave information requested, names, addresses, and age.

IRS: OK, thank you for verifying all this information. Give me a minute so I
can review your case and I will be back with you.

Taxpayer: Thank you, I'll wait.

IRS: OK hold on a second. (untintelligable)

Taxpayer: Yes mam?

IRS: Thank you for holding. OK, now I can see (unintelligible). How can I
help you?

Taxpayer: Well, I want to know what I have to do now . . . (interrupted)

IRS: (uniteligable) Ahh . . . we received your payment of $XXXX.00 and
$YYY.00.

Taxpayer: Yes.

IRS: Now. . . Ah.Ah.To process your . . .ah. . . payment we need your
signature. First you have to agree with our proposal. So you have to just
sign the letter . . . ah . . notice . . .and just . . .we need your
signature. . actually we need your and your wife's signature on the . . .
ah . . . proposal agreement and then we will go ahead and process your
response. Then you have to pay in full.

Taxpayer: Ah. . You don't understand. There is an error made by the IRS. I
do not agree with your proposal. You made a decimal point error in my line
20b on my 1040. I do not owe you a fine for decimal point error that the IRS
made.

IRS: OK. Oh.. Ah.I think you requested to waive the penalty. . .ah.and our
tax examiners reviewed the . . . one of the tax examiners reviewed your case
and . . . ah . . they didn't waive the penalty . . and they so .ah .
mailed you the letter saying we are not going to waive the penalty. So now
you have to . . you are responsible (unintelligible) I mean . .
(unintelligible ). . . to pay the penalty.

Taxpayer: Ah. . .Uh , , I'm not going to pay the penalty because I am not
responsible for an error made by the IRS mam. (long pause) Do you
understand?

IRS: Yes Sir, I understand. Ah . . .what I'm saying that you already
requested . . and we . . we said no. We. . .we cannot waive the penalty.

Taxpayer: Why can you not waive the penalty?

IRS: So if you think that . . ah .. We. . . we made a wrong decision then
you can .ah.you can request again or. . ah. . . you can file your form 843
... . .

Taxpayer: I have filed the 843. If you will please check the correspondence
that you got. My letter of . . . . .

IRS: Sir, right now I am just looking at . . .the some information on the
computer screen. I don't have your case on my desk.

Taxpayer: Will somebody please get my case on your desk.? . .

IRS: It will take 2 days, because if I order your case today it will take
two days to get your case and then I will call you again. Is that ok?

Taxpayer: In 2 days you will call me again?

IRS: Yes.

Taxpayer: I will not be back here until Monday. I'll be in Atlanta tomorrow
... . .Could I talk to you, no I can't talk to you in Atlanta even tomorrow .
... .I'll come back on Tuesday.

IRS: Yes.

Taxpayer: Could you call me on Tuesday please?

IRS: Yes.

Taxpayer: Thank you very . . .

IRS: Ah . . .OK . . So what you want me to do? Or you just . . . ah. I just
... . . ah . . .review your case and just. . . ah . . . and I just . . ah .
... . because we are not authorized to . . .ah.waive the interest and penalty
ah . . .until . . yes we can waive the penalty but not interest so if you
file form 843 . . .

Taxpayer: I have file form 843 mam.

IRS: Then we are already . .(untiteligable) .might be forwarded to another
department who are authorized to waive the penalty and interest. So might be
they are reviewing your case and . . .ah . . .that is a possibility that . .
and. . . if nobody forwarded your . . ah . .that form 843 I will go ahead
and forward that. OK?

Taxpayer: Yes, it was in my letter of 7/23 of which I have a certified
receipt for from your office.

IRS: OK

Taxpayer: So you will call me on Tuesday?

IRS: OK

Taxpayer: Thank you very much.

IRS: And I will just tell you what we did with your form 843.

Taxpayer: Yes .. may I have your name again, I got your ID number . . but
your name?

IRS: Mrs. Shah . . S H A H (hard to understand)

Taxpayer: That's S H A H Shah?

IRS: Yes

Taxpayer: OK, thank you very much Mrs. Shah

IRS: OK, thank you.

Taxpayer: Bye bye.

IRS: (unintelligible) sir.

Taxpayer: I'm sorry?

IRS: Anything else sir?

Taxpayer: Uh . . . that's all I've got, I'm . . (interrupted)

IRS: OK. Sir (unintelligible) you don't agree with the penalty still you
have to go ahead and sign . . ah . .ah ..that you agree with the proposal,
right? About . . . (interrupted)

Taxpayer: No, I do not agree with the proposal . . . (interrupted)

IRS: (unintelligible) about social security benefits - right?.
(Interrupted)

Taxpayer: No I do not agree with your proposal because your proposal is
wrong. You made a decimal point error mam. . . If you will look at the
document you will see that very clearly.

IRS: OK. Hold on a second. (unintelligible) have your document right
now.

Taxpayer: Did you look at. . . (interrupted)

IRS: So why you. . . why you go ahead and pay this amount?

Taxpayer: What's that now?

IRS: Why you go ahead and pay this amount?

Taxpayer: Why don't I go ahead and pay that amount?

IRS: Yes

Taxpayer: Because it is not due you. I don't owe it. It's $XXXX.00. I am not
going to pay $XXXX.00 that I don't owe. I paid you the money back that you
made the mistake on; I paid you the interest on that money. Now if you will
consult your own IRS . . .ah rules . . I think it is . . . (looking for
843 form with code 6404 (e) (1) and (2) ) let me look . .its. just a minute,
I have it here. . . . . .

IRS: I see that we refunded you money $YYYY.00 on (uninteligable) June 2002.

Taxpayer: Yes, why did you refund that?

IRS: It is based on . . ah . . OK.. its based on what you reported on your
line 20a and 20b.

Taxpayer: That's where the error is. If you will look at my line 20b you
will find I reported $XX,XXX.00 . You claimed it was $X,XXX.00 It is a
decimal point error clear and simple.

IRS: OK

Taxpayer: Now it seems like we ought to be able to fix this. . . The
document you are asking me to sign says that I waive everything and agree
with you. I do not agree with you, mam.

Long pause . . .

IRS: OK. .. . . OK, I will go ahead and order your case and I will review
again and I will call you back on Tuesday. (8/4/03).

Taxpayer: Thank you very much. I appreciate this.

IRS/Taxpayer - good bye.