This page details my experiences with the IRS as I filed my first tax return.1 This is intended as a record of what happened, but also an anecdote or guide of sorts on how to resolve issues when dealing with bureaucratic systems.
On my original Form 1040, I accidentally entered my failure-to-file and failure-to-pay penalties on line 79. As I explained in a Personal Finance & Money Stack Exchange question:
Previously I asked “Where is payment for failure-to-file and failure-to-pay penalties included on Form 1040?” There I found out that the failure-to-file and failure-to-pay penalties should not be included on line 79.
I made the mistake of placing my failure-to-file and failure-to-pay penalties on line 79, so that the IRS decided to calculate penalties on the amount that already included the penalties. In other words, call my total tax owed X (i.e. what should have been on line 78) and the penalty for this Y (what should have been on the bottom margin). Then I already paid X + Y to the IRS, but the IRS calculated penalties on the amount X + Y rather than on just X, so it is requesting more money. In other words, once the error is resolved, the amount I should pay already matches the amount I did pay (so no net exchange of money is required).
Specifically, I received a CP14 notice from the IRS.
You will notice that I asked a question about the penalty location before I asked about amending the return. I also asked on Quora “If I incorrectly included my failure-to-file penalty on line 79 of Form 1040, how should I amend this?”
Vipul Naik answered my question and figured that I should file Form 843. As I explain in the comments to his answer, I called the IRS, who I had trouble reaching: my specific case after entering in the sequence of numbers was an automated response, and they hung up; I actually called the IRS about four or five times, but because the system for receiving the number sequence was so unforgiving (they wouldn’t accept a number if I entered it too early, and sometimes even when I pressed a 9 to repeat the instructions, I didn’t do so soon enough to prevent them from hanging up on me), they hung up on me each time.
I then called the TAS toll free number. After being forwarded once (by a person who said I should file Form 1040X, and when I explained further just gave up and forwarded me), I spoke to someone (who consulted a supervisor). He told me my situation was “unique”, and eventually told me to fill in Form 843 and that I should attach a letter explaining my situation. When asked, he said he didn’t know what the expected response would look like, said the response would probably take 4–6 weeks, and that I should follow up by calling the IRS if I don’t receive a response by then.
- As the issue is unfolding, document things by e.g. asking questions on Quora, Stack Exchange, and so forth. This will create material that others can find if they are in a similar situation.
- When calling a phone service, persistence pays off. In particular, don’t hang up until the issue is fully resolved. Yes, the person you are talking to may sound exasperated, but at least when dealing with the IRS, you have the right to have this resolved. Even after they answered my initial question, I repeatedly said “Could I have a moment to think? I might have another question.”
- My experience has been that IRS representatives will try to screen you for competence first, so that they can determine that you are incompetent and give some generic advice or tell you to RTFM. Therefore, it’s important to convince them of your competence by clearly explaining what you have done so far.2 Similarly, it’s important to research your case thoroughly enough that you can easily pass the pre-human screening and get to a human.
- April 19
- I didn’t manage to finish filing my tax return; the penalty amount is small so it wasn’t a big deal.
- April 28
- I filed my tax return.
- June 21
- I received a CP14 notice from the IRS (notice dated June 20).
- June 28
I called the IRS for the first time to tell them I disagreed with the amount due notice (CP14), using the number they provided on the CP14 for disagreements with the amount due. During the call I realized my mistake, and that the failure-to-file and failure-to-pay penalties shouldn’t have been on line 79. The IRS representative told me they had to honor my initial filing of Form 1040. I asked on which line the penalty should have been listed; the representative told me to look in IRS Publication 17 (288 pages long), section 1 (only when pressed further), but could not cite a paragraph. I asked to talk to somebody more senior, but was denied my request. I asked what I should do next to correct this issue, but was told they could not help me, and that I would have to call in again. I later looked in Publication 17 but could not locate this information in a reasonable amount of time.
The whole phone call process on this day took around 1 hour (from around 1 PM to 2 PM).
- June 28
- I asked “Where is payment for failure-to-file and failure-to-pay penalties included on Form 1040?” on Finance & Money Stack Exchange (4:34 PM). The question was answered about 3 hours later.
- June 29
- I asked “If I incorrectly included my failure-to-file penalty on line 79 of Form 1040, how should I amend this?” on Quora (8:13 PM) and “How should Form 1040 be amended if error was introduced on lines 78 and 79?” on Finance & Money Stack Exchange (9:13 PM). I decided to wait a day to see if a definitive answer emerged.
- June 30
- Vipul answered my question on Finance & Money Stack Exchange (10:44 PM).
- July 1
I called the IRS, but did not manage to receive a human response as described above in the page. I then called the TAS. All of this happened from around 7:30 AM to 9:30 AM.
The whole phone call process on this day took a little under 2 hours.
- July 1
I wrote a letter to the IRS to attach with my Form 843 using the following sources:
- July 1
- I asked “Where to file Form 843 for penalties?” at 9:32 PM.
- July 9
- Finally mailed the letter and Form 843 to the IRS.
- July 23
- Received a CP501 notice from the IRS (which is dated “July 25”).
- August 30
In the morning, I received two things in the mail:
- A letter dated August 26 saying they received my letter on July 18, but that they are working on my situation and need an additional 45 days, and that I don’t need to take further action.
- A CP503 notice dated August 29.
- October 15
- I received a CP21C notice from the IRS, dated “October 10, 2016”. The notice states that my amount due is $0.00.
Thanks to Vipul Naik for the following links.
- As the IRS Migrates to More Self-Service Tools and Online Services, Low Income and Other Vulnerable Taxpayer Populations May Face Greater Compliance Challenges
- 2012 Tax Filing: IRS Faces Challenges Providing Service to Taxpayers and Could Collect Balances Due More Effectively
- Taxpayer Advocate 2016 Objectives Report To Congress
- Tactics for Getting the I.R.S. on the Phone
- IRS Customer Service Is Even Worse Than You Thought
- Wait Times Are Down, But IRS Still Faces Serious Challenges (jailbroken)
- Are you experiencing long waits calling the IRS?
Tax year 2015 was the first year for which I filed a return, because I had made money doing content creation work under Vipul Naik. For more, see my page about Wikipedia.↩
In other words, dealing with the IRS is more like asking a question on Stack Exchange than asking a question on Quora.↩