Still haven't received IRS refund!

[mefordis]

Wondering if any tax experts can steer me in the right direction? We filed back in Feb and I"m expecting a sizable refund. However, the iRS is telling us the reported witholdings on our return are higher than the employer reported witholdings. This has to do with Medicare. My accountant tells me when you make over a certain amount there is extra witholding for medicare and it goes on the return on a separate line. My accountant says IRS is making the mistake.

They still have not sent us a letter (we received this info by calling) and are still waiting for an official letter so I can write back to them.

What would you experts do? I want my money!

 

[Bren's Mom]

I would consult with a tax attorney.

 

[TAX GUY]

Wondering if any tax experts can steer me in the right direction? We filed back in Feb and I"m expecting a sizable refund. However, the iRS is telling us the reported witholdings on our return are higher than the employer reported witholdings. This has to do with Medicare. My accountant tells me when you make over a certain amount there is extra witholding for medicare and it goes on the return on a separate line. My accountant says IRS is making the mistake.

They still have not sent us a letter (we received this info by calling) and are still waiting for an official letter so I can write back to them.

What would you experts do? I want my money!

Have you checked the IRS link, "Where's my Refund"? https://www.irs.gov/refunds

I'd start there. At least you'd see that it was processed and at least pending. When you say the IRS is telling us..... did they send you a letter?

I would consult with a tax attorney.

Why? A tax attorney wouldn't be able to anything different than their CPA/EA (assuming they used a CPA or EA).

 

[Bren's Mom]

Why? Because the accountant and the IRS are each pointing the finger at each other. If the independent tax attorney says it's the IRS, then great. The CPA/EA (assuming it is one of those) can continue to handle and I'd be confident. If, however, they say it's the accountant, then I'd have that knowledge and would know I needed a new CPA.

 

[TAX GUY]

Why? Because the accountant and the IRS are each pointing the finger at each other. If the independent tax attorney says it's the IRS, then great. The CPA/EA (assuming it is one of those) can continue to handle and I'd be confident. If, however, they say it's the accountant, then I'd have that knowledge and would know I needed a new CPA.

Another CPA or EA can do the same, and I'm willing to bet at a much lower rate. To each his own but I'd prefer a CPA or EA in this situation over a tax attorney.

 

[Bren's Mom]

Fair enough! I'll amend to 'consult a third party, either a tax attorney or another CPA/EA independent of your original one to get a second opinion on the situation. TAX GUY says a CPA/EA would be the less expensive choice'.

Is that better?

 

[mefordis]

Have you checked the IRS link, "Where's my Refund"? https://www.irs.gov/refunds

I'd start there. At least you'd see that it was processed and at least pending. When you say the IRS is telling us..... did they send you a letter?



Why? A tax attorney wouldn't be able to anything different than their CPA/EA (assuming they used a CPA or EA).

Thanks, Tax Guy. I have checked the IRS Website and it says:

Your tax return is still being processed.

A refund date will be provided when available.

We have yet to receive a letter but have called and that is what the person we spoke with told us - that there is an $800 difference between the witholding we reported on our tax form and the W-2 witholding reported. It is because Medicare requires that you pay in more once you reach over a certain amount of income.

My accountant has basically said we have to resolve this with the IRS since they said they did the tax forms correctly. I am ready to kiss my $1315 refund goodbye so I can stop stressing over this.

I am thinking the IRS is in no hurry to contact me since this is money they owe me, even if they are correct that I over reported witholding they sill owe us something.

 

[mefordis]

Another CPA or EA can do the same, and I'm willing to bet at a much lower rate. To each his own but I'd prefer a CPA or EA in this situation over a tax attorney.

I agree - at what point do I just go ahead and refile? Should I expect my accountant to do anything more to help this along or is his job done?

 

[TAX GUY]

Thanks, Tax Guy. I have checked the IRS Website and it says:

Your tax return is still being processed.

A refund date will be provided when available.

We have yet to receive a letter but have called and that is what the person we spoke with told us - that there is an $800 difference between the witholding we reported on our tax form and the W-2 witholding reported. It is because Medicare requires that you pay in more once you reach over a certain amount of income.

My accountant has basically said we have to resolve this with the IRS since they said they did the tax forms correctly. I am ready to kiss my $1315 refund goodbye so I can stop stressing over this.

I am thinking the IRS is in no hurry to contact me since this is money they owe me, even if they are correct that I over reported witholding they sill owe us something.

The good part is you know the return was processed and received and the anticipated refund is pending (and wasn't issued incorrectly). The IRS, on average, typically takes up to 6 months. Those times could be longer now since they are short staffed. You could try to see what they have, so far, by requesting an on line transcript using this link, https://www.irs.gov/individuals/get-transcript . It'll be easier for you to get it since you (or your spouse) is the taxpayer. There should be a few options to chose (record of account, tax transcript, income and wage report, etc). There might be no info for 2015, but it might be worth a look to see if they have made proposed changes to your return/account. You could try calling them, but unless you have the better part of a day to sit on hold, I'd suggest the on line route. Your CPA/EA could do this as well but they would then need a form 2848 (power of attorney) completed and faxed.....and that usually takes up to 10 business days for the IRS to get posted to their system.

 

[TAX GUY]

I agree - at what point do I just go ahead and refile? Should I expect my accountant to do anything more to help this along or is his job done?

You wouldn't file again, that would just cause more confusion for the IRS. We've had "new clients" come in and ask us if the original return was done properly (and explain the situation, as you have). Your current preparer isn't required to do anything further, but usually a good preparer (CPA/EA) would continue to help their client. Not to pry, but is your preparer a CPA or EA?

 

[piccolopat]

Did your accountant file form 8959 with your return?

 

[threeboysmom]

Can you be proactive and fax/mail the information they are looking for? You must have some sort of documentation to prove the $800 withholding deficit the IRS is pointing to.

 

[mefordis]

You wouldn't file again, that would just cause more confusion for the IRS. We've had "new clients" come in and ask us if the original return was done properly (and explain the situation, as you have). Your current preparer isn't required to do anything further, but usually a good preparer (CPA/EA) would continue to help their client. Not to pry, but is your preparer a CPA or EA?

Thanks so much for your help! My CPA has been doing our taxes for 18 years. This is the first wrinkle we have ever experienced. Does the problem I described with medicare witholding sound familiar to you? My CPA insists that they did the return correctly and the IRS is wrong. This year the troubles started with the CPA initially entering the incorrect identity pin and that put a flag on our return. Do you think this problem will cause us to have issues next year? I expect a bigger refund next year because we'll be overpaying Fica due to a job change. I am nervous that our returns will forever be delayed now. I really would like to increase our allowances so that the IRS doesn't owe us anything. Do you know the maximum allowance # we can declare so we come out even or close to it?

Thanks so much for your time!!

 

[mefordis]

Can you be proactive and fax/mail the information they are looking for? You must have some sort of documentation to prove the $800 withholding deficit the IRS is pointing to.

The woman I spoke with at the IRS told me I have to wait to receive the letter, which she said she would try to order it expedited but that was a week ago.

 

[TAX GUY]

Thanks so much for your help! My CPA has been doing our taxes for 18 years. This is the first wrinkle we have ever experienced. Does the problem I described with medicare witholding sound familiar to you? My CPA insists that they did the return correctly and the IRS is wrong. This year the troubles started with the CPA initially entering the incorrect identity pin and that put a flag on our return. Do you think this problem will cause us to have issues next year? I expect a bigger refund next year because we'll be overpaying Fica due to a job change. I am nervous that our returns will forever be delayed now. I really would like to increase our allowances so that the IRS doesn't owe us anything. Do you know the maximum allowance # we can declare so we come out even or close to it?

Thanks so much for your time!!

We haven't had issues with "Obama tax", but its not to say there isn't any. If there was/is an issue with possible identity fraud (the IRS thinks there may be a bogus return filed) then it will delay. Once its proven that its a legit return, it'll be fine. They may issue you an assigned PIN for next year if you efile.

I can't answer the allowance question for you. There are far too many variables and I haven't a clue what your overall tax situation is like. Even if I did, there are so many factors to consider.

 

[TAX GUY]

The woman I spoke with at the IRS told me I have to wait to receive the letter, which she said she would try to order it expedited but that was a week ago.

This is really the only thing you can do at this point. You have to wait to see what they are coming with, then either prove them wrong, or accept the changes.

 

[sam_gordon]

there is an $800 difference between the witholding we reported on our tax form and the W-2 witholding reported.

Can someone explain how this discrepancy happens? Don't you (or your CPA) use the W-2 statement to fill out the tax form? How could the tax form be different?

 

[TAX GUY]

Can someone explain how this discrepancy happens? Don't you (or your CPA) use the W-2 statement to fill out the tax form? How could the tax form be different?

You'll have to look up "additional medicare tax"

 

[sam_gordon]

You'll have to look up "additional medicare tax"

From Turbotax:

If your income is above the starting amount for your filing status, the Additional Medicare Tax is paid out of your earnings. The new tax is collected by your employer, is combined with regular Medicare taxes, and then appears on your Form W-2 in box 6, Medicare tax withheld.

So if the number is on the W-2, why is a different number entered on the tax form? That's what I don't get.

 

[mefordis]

We haven't had issues with "Obama tax", but its not to say there isn't any. If there was/is an issue with possible identity fraud (the IRS thinks there may be a bogus return filed) then it will delay. Once its proven that its a legit return, it'll be fine. They may issue you an assigned PIN for next year if you efile.

I can't answer the allowance question for you. There are far too many variables and I haven't a clue what your overall tax situation is like. Even if I did, there are so many factors to consider.

Yes, I didn't mention this but we had to go to our local office to prove who we were, so they did need identity verification. We seem to be hitting every hurdle with this year's return. We never had a problem in the past! Thanks again for your insight!