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URGENT - IRS made mistake, but I am in trouble!

What can I if IRS made a mistake but insisted I was wrong? It's a long story, but in brief:

  1. I bought a house last July. My estate lawyer messed up the so-called FIRPTA tax, but IRS held me responsible.
  2. The estate lawyer thus hired a tax lawyer to deal with IRS and finally agreed at a 00 settlement.
  3. The estate lawyer cut me a check (payable to me) and then I sent a responding check (payable to IRS) to IRS for that amount
  4. My check was cashed on April 25. I thought the issue was solved.
  5. But surprisingly I received an IRS notice in June threatening possible debt collecting procedure because I had not made the payment.
  6. I contacted both lawyers, the tax lawyer sent IRS a letter together with my bank record showing the check images and demanded the IRS to correct its mistake.
  7. However I received a letter from IRS again today with the same contents as step 5 above, but looks more serious

During the process, I have also called IRS and have spoken to more than a dozen of agents. However all of them either claimed they couldn't find my under-payment record (I guess it's because they was only able to find 1040 related information, not FIRPTA) or couldn't find my payment record (basically, there is virtually no way for them to trace a check payment. So if the check was posted to a wrong account when it was cashed, they couldn't trace it any more!!!) So my questions are:

  1. What can I do now in addition to contacting the lawyers again?
  2. Clearly it's IRS' mistake, but it's more powerful than I am. If the IRS indeed kicked off debt collection procedure, what can I do?
  3. I am afraid of, at this moment, both of the lawyers may hand off and leave me in trouble. (The estate lawyer may say now it's the issue between you and IRS, not me. The tax lawyer may say sorry I cannot help further.) In this case, what can I do?

Many thanks in advance for any help/suggestion.

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Reply to
My interest
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Have your lawyer file suit against the IRS district director, seeking declaratory relief. When you do that the IRS will get their lawyers involved, and they normally have more sense than a lot of the agents.

Find a better lawyer.

Stu

Reply to
Stuart Bronstein

print out what you just posted. Fax the IRS branch that sent you the correspamdence, fax this post and the canceled check. Then call to see if they recieved it. Sounds like a computer error. You need a real human being to stop it from being escalated.

Reply to
steve-o

Not quite clear whats going on between the estate & the 2 lawyers here. However, with regard to the payment issue, it seems more like the payment & the account balance due never matched up. That still needs to be resolved. Again, speculating here, the IRS notices you are receiveing probably need a timely & perhaps a formal response. Don't let it sit & collect dust. That will only make matters worse. ___________________________________

-----> real address on hobokeni or hobokenx

Reply to
Benjamin Yazersky CPA

What is likely is that the liability is working its way through the notice process. Calling the IRS about it should have resulted in the account being placed on hold while the issue is resolved because it is going to take a few months for that to happen. The IRS will continue to send certain statutory notices, even if the account is on hold. What you need is someone who understands the process to make sure that collections are suspended while the matter is addressed.

Reply to
Mike Wellman

Assuming this is successful, will he be able to get reimbursed for his lawyer fees from the IRS? If not, what happens if he spends more in legal fees than the IRS is claiming he owes? He wins but he still loses. And if he loses, he's even worse off, having to pay the IRS

*and* the lawyer.

-- Barry Margolin, snipped-for-privacy@alum.mit.edu Arlington, MA

*** PLEASE don't copy me on replies, I'll read them in the group ***

Reply to
Barry Margolin

If the court finds the IRS position was unreasonable, yes. Otherwise, no.

There are no guarantees in life, and life isn't, unfortunately, fair. Taking all that into consideration he's got to do what he thinks will work best for him - there is no perfect solution. Stu

Reply to
Stuart Bronstein

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