Efficient IRS at work

[neilbrink]

This is an interesting video on what the IRS is doing these days.

http://articles.moneycentral.msn.com/video/default.aspx?vid=37de1050-f422-4aca-b014-8980f47c1d8a&t=v&from=en-us_msnhp

[GeneInAlabama]

How can someone owe four cents in tax when we round off to the nearest dollar?

[grandmabee]

How can someone owe four cents in tax when we round off to the nearest dollar?

Penalty and interest it is not rounded off.

[JohnH]

I have no idea what it might be, but I'm absolutely convinced there's more to this story. We've been discussing this off and on on the TMI board as well.

Two IRS agents for a matter this small? (They can read too, you know).

A mysterious previous letter stating that all taxes have been paid? (Anybody on this forum ever see one of those?)

[ILLMAS]

He owed .04 cents as of 12/31/06, and from I understand those .04 cents turned into $206 (penalty and interest), I believe that. He should of paid off those four cents back in 2006. Reminds me of when I made the last payment on my VW, I walked away from the teller reciept in my hand and I notice I had a .01 balance due, I was debating if I should go back or just leave it like that, well I did go back, the teller told me, if I hadn't paid that 1 cent, I would of never recieved my title.

[jainen]

>> I'm absolutely convinced there's more to this story<<

My guess is there is LESS to this story. Come on folks, we know how the IRS works. This is just stupid urban legend.

[GeneInAlabama]

What is the maximum penalty? 25%? Even if it is 100%, that would only be four cents, for a maximum of eight cents including the tax. How much would the interest be for four years? Let's be really generous and say one dollar. How could that ever reach the amount of $206? Sounds like someone is really trying to make the IRS look bad, but they don't need our help. They can look bad all by themselves without our help.

[JohnH]

My eyes aren't all that good, but the notice appeared to apply to a Form 941. I'm guessing there was 4 cents due on the Form 941 itself (difference between actual liability and actual payments) , plus a FTD penalty and/or a FTP/FTF penalty of some sort. I agree that there's no way the penalty & interest alone on 4 cents would add up to the amount stated.

[michaelmars]

could have been anything, maybe he had an assessmetn for $1000.96 +$200 for i&p and paid $1000.92, then the 4 cents could be the subsequent notice along with i&p from the previous notice.

[Jerry W]

could have been anything, maybe he had an assessmetn for $1000.96 +$200 for i&p and paid $1000.92, then the 4 cents could be the subsequent notice along with i&p from the previous notice.

I believe you have described the situation perfectly. This is not all that uncommon. He paid the assessed balance down to 4 cents but still owed the statutory accruals.

Jerry

[JohnH]

He's missing a golden marketing opportunity. He should set aside a couple of hours one day and sell 4 cent car washes "So I can pay my taxes". Or maybe 4 cent car washes to the first 20 customers on a couple of days. Customers would line up, everybody would have a good laugh, and he'd get publicity much more valuable than the loss on the car washes. Maybe he should do this on Apr 15.