DAMN!!!!!

[Moonbeam_Starlight]

DAMN DAMN DAMN DAMN. Need some advice. The IRS disallowed our ENTIRE adoption credit from our 2002 tax return. We attempted to adopt two foster sons, it didn't go well, it disrupted, they went back to another foster home.

Well, you are allowed to deduct certain expenses as an adoption credit. We did. The IRS audited us on it and disallowed the WHOLE thing, despite the fact that we were within the law on everything we deducted.

Total tab with interest: $4027.22.

So. I am going to call them tomorrow and ask them what's up. I'll be nice, but this is frigging ridiculous. And they sent their response back SO quickly after I sent all the paperwork it makes me wonder if they even LOOKED at my stuff. I haven't even gotten the return receipt from the post office for them getting it yet and I have their answer back already? Since when does the IRS move THAT fast?

We can set up a payment plan but interest compounds daily. That sounds scary. Does that mean it goes up higher FAST?

Or we can come up with the full amount in 120 days. The only way we can do that is to borrow it from our daughter's college fund or take out a smallish loan from the bank.

Would the bank or the IRS be more hefty with interest? What should we do if we end up losing our appeal?

[Dogmudgeon]

1. Fight it

The IRS is pretty accommodating about having taxpayers pay up, so you shouldn't spend much time worrying about it. Just appeal the decision and "keep your ducks in a row."

Consulting a tax attorney is also a good idea.

--bkl

[Mojambo]

2. I don't know much about this stuff

But I'd look into getting some professional tax help. Perhaps a lawyer specializing in IRS issues.

[Moonbeam_Starlight]

3. Doesn't that just cost more money?

Damn.

[Mojambo]

4. Well, if it costs 400 dollars but cuts the tax liability in half

You're still coming out on top.

A lot of these lawyers will set up a free consultation so you can find out whether it will be worth it or not.

Call around.

[Moonbeam_Starlight]

5. Hmmm well that might just be worth it then

thanks! I always think of lawyers in terms of being thousands of dollars! I have never used one before...

[miss_kitty]

6. pay on the last possible day. also appeal

it's supposed to be a kinder gentler IRS-of course that was a Clinton thing. But really, if you can remain under control and polite, you may be able to get the interest charged off...Willie Nelson only paid a small fraction of his bill.

I agree about getting professional help. Lawyers who do that work can cost, but can also save you a lot.

ask the bank to figure out the interest, and get the numbers from the taxman.

Sorry about the trouble. It seems sometimes no good deed goes unpunished.

[pagerbear]

7. Who prepared your tax return?

If it's a CPA or an enrolled agent, s/he is allowed to represent you to the IRS. You don't even have to be there. In fact, if you go with him/her, you don't have to speak.

If you dind't have a professional prepare your return, my suggestion is that you have one go over it to make sure everything you did was coorrect--and to find other things you might be allowed!