1952 Taxes, Still!

Thursday, August 14, 2008

Well, if I ever drop out of sight, look for me in prison, convicted of tax evasion.

My 2007 taxes are still a mess.

I got all the info to The Angel (the CPA and Piper's business partner), in early April. Something to keep in mind, The Angel doesn't deal with people. Piper does all the people talking, and The Angel does only numbers. So I don't get to talk to The Angel. Everything goes through Piper.

The Angel was backed up, and my taxes are a bit involved (even though what I give him is complete, neatly sorted, paper clipped, and labeled) because we also plan for the next year's investments at the same time. I shrugged and said no problem, go ahead and apply for an extension.

Now, when you get an extension, if you owe anything, you still have to pay it by April 15! When The Angel didn't come back to me for a check by the 15th, I figured either I didn't owe anything (I usually get a very small refund) or that The Angel had got the money from my account with Piper.

I am also supposed to pay the 2008 estimated taxes by April 15, but I got nothing from The Angel as to how much. Piper said not to worry about it, that the 2007 refunds applied to 2008 would cover it.

In mid June, I finally got to see the 1040s, which The Angel had already filed electronically. According to that form, I got a $2,000 refund from the federal, which was applied to 2008 taxes, and I owed the state $500 (all figures rounded). I asked Piper if the state had been paid, and to my horror, he said no.

(Now, it was about that time, just before or just after, that I was at the gas station across the street, and saw/overheard Piper and The Angel having one heck of a shouting match outside the office, with the word "taxes" clearly audible.)

When I reviewed the 1040 in Piper's office, I discovered that The Angel had completely omitted $15,000 in income. The 1099 was there, but he'd skipped right over it. I freaked. I gave the forms back to Piper to give to The Angel to redo, keeping only the quarterly slips for the 2008 estimated payments, which were due in Mid-June, and which I paid.

Ok. So far, I have no idea how much I owe the IRS or NYS, but I know I'm at least six months delinquent on the NYS payment. In addition, I've missed at least one NYS 2008 estimated tax payment (the federal would have been paid from the refund, although the amount of that refund is now suspect), and the estimated payments I made in June were based on an incorrect estimate, so I'm probably to some degree delinquent on them, too.

I'm not feeling so good.

In mid-July I get a nasty letter from the state. They want their $500, now! Piper said to wait until I got the amended returns.

In the last few days of July, I got to see the amended returns. However, The Angel had given Piper only the amendment pages, not the original returns. When I looked at them, it was obvious that there was something very wrong. Very. I couldn't remember what the original numbers were, exactly, but somehow, with the addition of $15,000 in income, I now owe the IRS $5,000 (I seemed to recall a $2,000 refund on the originals), and I now owe the state $300 (I seemed to recall that it had been more like $500). It didn't feel at all right.

Ack!

Again, no checks had been sent.

Piper couldn't explain the discrepancies.

I left the forms with Piper, and asked him to check with The Angel.

What I'm getting back is very garbled. He says I owe less on the state because I get a "bye" on $18,000 of income because I'm over 62. (Huh? I was over 62 when they did the first 1040s. Did he forget it then?) In addition, according to Piper, I don't really owe the IRS $5,000, I owe only $3,000, because --- and this I don't I don't understand AT ALL! --- I had a $2,000 refund on the first pass. That doesn't sound right.

They way *I* see it, the $2,000 refund on the first pass was incorrect, because it didn't take into consideration the $15,000 additional income. So the amended return shows me owing $7,000 more than the original return, right? $2,000 of which is paid by withholding and estimated tax payment, and $5,000 of which I still owe.

What this means is that if I owe $7,000 additional tax on $15,000 additional income (from which $1,000 had been withheld, by the way, so my already paid amount went up, too), I paid $8,000 additional tax on $15,000 additional income, which puts me in like a 53% tax bracket. No way!

I'm not feeling so good.

Something is very wrong.

I guess I'm going to just pay what The Angel says I owe, and if the IRS or the state gets upset, he'll have to defend it, and he'll have to pay any monetary penalties.

'Cept, he doesn't get to go to jail. I do.

Sigh.
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