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IRS and owed taxes

Old 10-24-2019, 07:54 AM
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Default IRS and owed taxes

Anyone ever make a mistake or have screwed up taxes then get a letter years later?

I had a debt forgiven back in 2017. I didn't ask for it to be forgiven. I just quit paying it with the idea of them restructuring the loan. I quit getting calls and letters from the lender. I find out in 2018 that the debt was forgiven.

Yesterday I get a notice from the IRS I owe a pretty good amount of money because it counted as income. This doesn't surprise me but what I'm more pissed about is I never received anything in the mail in order for me to add it to my taxes. Whatever form they send out I never got. So now I owe over 5 digits in taxes and penalties.

Has anyone ever worked with a tax attorney or those tax relief companies that are supposed to work with the IRS to lessen your debt?
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Old 10-24-2019, 07:56 AM
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How much was the debt you didn't pay and who did you owe?
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Old 10-24-2019, 08:08 AM
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Originally Posted by mikefloyd View Post
How much was the debt you didn't pay and who did you owe?
It was a second mortgage that I wanted them to restructure. The banks words were " You are in good standing there isn't anything we can do for you". So I quit paying until they decided to do something for me. Then like I said, all calls and mail quit coming all within about 6 months.
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Old 10-24-2019, 08:29 AM
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so you quite paying them, and now pissed because they didnt send you anything? how about just pay the bills to start with? you signed up for the loan you knew the terms from the start!

stop paying does not force them to restructure! all they are going to do is foreclose and kill your credit. good luck with them loaning to you in the future as well.
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Old 10-24-2019, 08:31 AM
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Originally Posted by simeoncoleman View Post
Anyone ever make a mistake or have screwed up taxes then get a letter years later?

I had a debt forgiven back in 2017. I didn't ask for it to be forgiven. I just quit paying it with the idea of them restructuring the loan. I quit getting calls and letters from the lender. I find out in 2018 that the debt was forgiven.

Yesterday I get a notice from the IRS I owe a pretty good amount of money because it counted as income. This doesn't surprise me but what I'm more pissed about is I never received anything in the mail in order for me to add it to my taxes. Whatever form they send out I never got. So now I owe over 5 digits in taxes and penalties.

Has anyone ever worked with a tax attorney or those tax relief companies that are supposed to work with the IRS to lessen your debt?
You took out a second mortgage and didn't pay it back? No wonder my taxes are so high.
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Old 10-24-2019, 08:43 AM
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Originally Posted by Rolandt03 View Post
so you quite paying them, and now pissed because they didnt send you anything? how about just pay the bills to start with? you signed up for the loan you knew the terms from the start!

stop paying does not force them to restructure! all they are going to do is foreclose and kill your credit. good luck with them loaning to you in the future as well.
Hi asshole how are you? No where in my post does it say I'm pissed. Your reading comprehension is very bad. Also actually by law YES they are supposed to give you a tax document for taxes owed. I didn't ask them to forgive my loan. That was their decision

As far as my credit goes, my credit is pretty damn good. I also don't need any loans and won't see needing any loans in the near future.

Don't project your idiocy on me. Stick to the question at hand.
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Old 10-24-2019, 08:44 AM
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Originally Posted by mckee4me View Post
you took out a second mortgage and didn't pay it back? No wonder my taxes are so high.
huh!
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Old 10-24-2019, 08:51 AM
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It's a 1099-C.
Have to file an Amended return showing the income. As soon as you found out in 2018 you should have tried to correct it - water under the bridge now. Good luck.
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Old 10-24-2019, 08:52 AM
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You got out of your mortgage, now you have to pay a fraction of what you owed to satisfy the tax debt and you come on THT looking for a way to skirt that. Then, you have the audacity to call another poster an asshole? Yeah, good luck...
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Old 10-24-2019, 08:55 AM
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Originally Posted by simeoncoleman View Post
...So I quit paying until they decided to do something for me. ...
Your choice. Now enjoy the outcome you created.
Your ignorance of the situation and lack of proactive communication is childish.
Your continued concern for avoiding your tax obligaiton says it all.
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Old 10-24-2019, 08:56 AM
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Pretty sure forgiven debts are considered income by the IRS. I doubt businesses are required to sent out tax documents, They only notify the IRS the debt was not paid. Same deal with folks getting CC debt reduced or forgiven.
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Old 10-24-2019, 09:01 AM
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OP is a poster child of an American. Borrows more than he can afford, might have spent the money on a boat, then doesn’t pay his debts, makes a lender eat the loss, then bitches about how unfair this whole thing is. Presumably now wants to shirk paying the government for the attendant tax bill. OP, have you considered suing the lender for the tax bill since it’s the lender’s fault?
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Old 10-24-2019, 09:04 AM
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I apparently forgot to file a state tax return in 2011 and I got a letter last year. "Your federal return shows you earned X, after interest and penalties you owe us [scary number]" I think they wait this long on purpose so people won't be able to find records and will just pay. After some digging I found my W2 showing I did pay state taxes, I sent it to the DOR and called them myself. Most of the penalties were waived. I ended up paying about $50 in tax and maybe a $100 fine.
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Old 10-24-2019, 09:06 AM
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Originally Posted by simeoncoleman View Post
Anyone ever make a mistake or have screwed up taxes then get a letter years later?

I had a debt forgiven back in 2017. I didn't ask for it to be forgiven. I just quit paying it with the idea of them restructuring the loan. I quit getting calls and letters from the lender. I find out in 2018 that the debt was forgiven.

Yesterday I get a notice from the IRS I owe a pretty good amount of money because it counted as income. This doesn't surprise me but what I'm more pissed about is I never received anything in the mail in order for me to add it to my taxes. Whatever form they send out I never got. So now I owe over 5 digits in taxes and penalties.

Has anyone ever worked with a tax attorney or those tax relief companies that are supposed to work with the IRS to lessen your debt?

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Old 10-24-2019, 09:06 AM
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Originally Posted by houtxfisher View Post
You got out of your mortgage, now you have to pay a fraction of what you owed to satisfy the tax debt and you come on THT looking for a way to skirt that. Then, you have the audacity to call another poster an asshole? Yeah, good luck...
This.
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Old 10-24-2019, 09:07 AM
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You can meet with an IRS agent. Explain the situation. Most likely you will have to pay the tax and interest. The penalties might get waived. You can offer what ever you are able to pay. I am assuming you cannot claim poverty. Depending on the agent I think the penalties will get waived and maybe some interest. Don't offer up info just answer questions. If you can have an attorney lined up it's a good idea. Any hint they want don't want to work with you or you are over you head, gracefully excuse yourself to make a prior engagement making a future appointment to continue. The go let that attorney handle it.

It really is about how you hit it off with the agent. If it's a honest case of not knowing the IRS should be lenient if you pay up the tax right away. If you can't do that expect to be under their thumb for 10 yrs .
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Old 10-24-2019, 09:08 AM
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Originally Posted by simeoncoleman View Post
Hi asshole how are you? No where in my post does it say I'm pissed. Your reading comprehension is very bad. Also actually by law YES they are supposed to give you a tax document for taxes owed. I didn't ask them to forgive my loan. That was their decision

As far as my credit goes, my credit is pretty damn good. I also don't need any loans and won't see needing any loans in the near future.

Don't project your idiocy on me. Stick to the question at hand.
lets talk reading comprehension! or maybe memory comprehension would be better suited? your direct quote from your keyboard below! particularly the part in red?

"Yesterday I get a notice from the IRS I owe a pretty good amount of money because it counted as income. This doesn't surprise me but what I'm more pissed about is I never received anything in the mail in order for me to add it to my taxes. Whatever form they send out I never got. So now I owe over 5 digits in taxes and penalties."
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Old 10-24-2019, 09:10 AM
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Sticking to your question, you can file an amended return for 2017. You may not owe the full amount the IRS is claiming if you complete an insolvency worksheet. Look up form 982. Find a competent tax preparer in your area and ask for help. You can ask for forgiveness of the penalty and work out a payment program on the balance. Happens all the time. Pretty standard stuff I deal with all summer.

I would not recommend one of the debt settlement agencies you see on late night tv. Every one of my clients who has used one would have been better off just paying the IRS.
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Old 10-24-2019, 09:11 AM
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Originally Posted by simeoncoleman View Post
Also actually by law YES they are supposed to give you a tax document for taxes owed.
They're supposed to provide you with a form showing how much mortgage interest you have paid (in case you want to deduct it). They are certainly not supposed to figure out whether you are going to owe taxes for something they did. *You* are responsible for calculating your taxable income regardless of other people's paperwork.
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Old 10-24-2019, 09:14 AM
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Forgiven debt is considered income by the IRS and they reported it to the IRS so they could write it off. It just took the IRS this long to get to you and now you owe penalties and interest. As for the financer company not notifying you, there is really nothing to be done on that front. More than likely you will get stuck into the fresh start program where you pay off the debt over six years.

Start off with a good CPA to review your 2017 taxes and see what he/she can do.
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