QUESTION
If disputing an IRS adjustment on taxes, should I pay the amount they say I owe or wait until resolved?
Asked on Jun 01st, 2015 on Taxation - Michigan
More details to this question:
I claimed a first time homebuyers credit on a home purchased by me and my parents (50/50). The IRS has sent me a notice denying the entire credit. I have submitted some additional documents to the IRS office and requested a phone conference, but have not heard anything back from them so I am not even sure what the basis is for the denial. (I think it may be because while my name is on the title and the purchase contract, it was not on the settlement sheet because the loan was taken out by my parents. But that is just a guess.) I do not know if I need to pay the amount they say I owe while this dispute is ongoing, or if I can wait until it is resolved.
2 ANSWERS
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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If the IRS hasn't issued a deficiency notice yet, then you don't owe it yet. If you're worried about the possible penalties (100% of the tax and interest 3% annually), you can make a DEPOSIT for the amount of taxes claimed. You must write a letter to the IRS stating that this is a DEPOSIT against a contested liability. Never say it's a PAYMENT.
Answered on Jun 02nd, 2015 at 3:10 AM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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Take the details to a tax attorney, you seem to know the issues, and I am sure what they have sent you will reveal it. No opinion with details is possible.
Answered on Jun 01st, 2015 at 11:24 PM