Tom's Tax Tip
Apr. 18th, 2006 09:23 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
yesthattomIf you receive a letter from the IRS that says you messed up and you have to pay $A plus a fine of $B for making the mistake, just send them a check for $A. They won't come after you for the $B.
Why?
Because many years ago someone did that and took it to tax court. He said, "Do I owe you $A now?" the IRS said, "No" and he replied, "Well then I certainly don't owe you a fine, do I?"
The judge upheld it. It's been true ever since.
(Obviously, ask you tax advisor before doing this.)
(And, no, I didn't receive any such letter.)
Why?
Because many years ago someone did that and took it to tax court. He said, "Do I owe you $A now?" the IRS said, "No" and he replied, "Well then I certainly don't owe you a fine, do I?"
The judge upheld it. It's been true ever since.
(Obviously, ask you tax advisor before doing this.)
(And, no, I didn't receive any such letter.)
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no subject
Date: 2006-04-20 12:03 am (UTC)A few years later when helping a non-profit dig out of a financial disaster, I saw they had paid $1,000 in IRS fines for late filing and someone ELSE made the comment that they shouldn't have paid the $1,000. The (then) president was very inexperienced and had just paniced and sent a check for the full amount. Everyone helping the non-profit dig out was like, "Oh, dear! you [polite word for idiot]! You shouldn't have sent the full amount!"