Recourse due to IRS error?

[Tom Wilson]

I had a refund due me, which I indicated on my 1040 that I wanted applied to my next year's taxes (I knew withholding would be insufficient to cover the bill due to a large taxable event). The IRS sent me a check anyway, and while I know I could have sent it back to them and explain the error, my wife simply deposited it without knowledge of the error. Now, I owe a significant amount of money with associated penalties and interest. Will an explanation cover letter be sufficient to ask for some consideration, given errors by both parties?

 

[Antigone*]

I had a refund due me, which I indicated on my 1040 that I wanted applied to my next year's taxes (I knew withholding would be insufficient to cover the bill due to a large taxable event). The IRS sent me a check anyway, and while I know I could have sent it back to them and explain the error, my wife simply deposited it without knowledge of the error. Now, I owe a significant amount of money with associated penalties and interest. Will an explanation cover letter be sufficient to ask for some consideration, given errors by both parties?

I'm sorry but that one is funny!!!! Um... the answer is No.

So, wife spent the money...and didn't tell you???

 

[FlyingRon]

You'll have to explain the dates (dates filed, date the check was issued, and what liability for penalty you have) to tell. I suspect the fact that the refund not being applied has any relevence to your alleged penalties.

 

[LdiJ]

I had a refund due me, which I indicated on my 1040 that I wanted applied to my next year's taxes (I knew withholding would be insufficient to cover the bill due to a large taxable event). The IRS sent me a check anyway, and while I know I could have sent it back to them and explain the error, my wife simply deposited it without knowledge of the error. Now, I owe a significant amount of money with associated penalties and interest. Will an explanation cover letter be sufficient to ask for some consideration, given errors by both parties?

No, the IRS is not going to cut you any slack for that. You wouldn't have even had to send that check back. You could have simply used the money to make an estimated tax payment. In fact, you can still make an estimated payment towards 2009 before January 15th, and eliminate some of those penalties.