My IRS/State Tax Nightmare
Our IRS/Colorado Department of Revenue nightmare:
I believe that every American should pay taxes. We have never cheated on our taxes and havealways paid.
In April, we got a tax bill from the State of Coloradosaying that we owed state taxes from 2008 (apparently it takes that long forthe IRS to report earnings). Afterseveral phone calls and review we found out that IRS reported to the state thatwe made an extra $14,000 more than our income.
After many phone calls, the IRS said that it was a clericalerror and that all we had to do was file Form 1040X with the same informationwe had before and it will fix the problem, but that it would take 8-12 weeks. We did so and assumed the problem was fixed.
[FONT=Calibri][SIZE=3][COLOR=#000000]Now, 12 weeks later we get an even bigger bill from theState of Colorado and a note that says it is going into collections. After several more phone calls, I find outthat instead of subtracting the $14,000 from our income, the IRS accidentallyADDED $14,000 to our income, making a total of $28,000 reported as income thatwe never made. The IRS apologized andpromises to fix it. This time they will