Oregon.
I didn't file my 2003 taxes until spring 2005. I made very little money that year but still owed and paid $696 in taxes. A CPA did my taxes for 2003 & 2004 very quickly so they'd be ready for my divorce trial. I didn't send the 2004 return in right away (had an extension) so I'd have time to go over it carefully. I discovered he had not included the home office deduction on either year, so I filed an ammended 2003 return and redid the 2004 return myself. I asked the IRS to apply the refund for 2003 to my 2004 tax liability and paid the remainder due for 2004. A month later I get a notice from IRS saying I owe $256 in penalties & interest for 2003. I didn't send it in because I planned to appeal it due to personal hardships relating to the divorce. About 6 weeks goes by and suddenly a refund check from the IRS shows up for almost $2700! I finally figured out that they must have applied my 2004 payment to my 2003 penalties & interest and refunded the rest. So here's my question: What are my chances of keeping my mouth shut and keeping this windfall without it coming back to bite me next year or in a few years?
I didn't file my 2003 taxes until spring 2005. I made very little money that year but still owed and paid $696 in taxes. A CPA did my taxes for 2003 & 2004 very quickly so they'd be ready for my divorce trial. I didn't send the 2004 return in right away (had an extension) so I'd have time to go over it carefully. I discovered he had not included the home office deduction on either year, so I filed an ammended 2003 return and redid the 2004 return myself. I asked the IRS to apply the refund for 2003 to my 2004 tax liability and paid the remainder due for 2004. A month later I get a notice from IRS saying I owe $256 in penalties & interest for 2003. I didn't send it in because I planned to appeal it due to personal hardships relating to the divorce. About 6 weeks goes by and suddenly a refund check from the IRS shows up for almost $2700! I finally figured out that they must have applied my 2004 payment to my 2003 penalties & interest and refunded the rest. So here's my question: What are my chances of keeping my mouth shut and keeping this windfall without it coming back to bite me next year or in a few years?