$18,671.15 was received from a 401k on 1/09/2013 and Mercer withheld $1,867.12 for Federal Taxes.
On June 22,2015, I received an IRS notification that the income and payment info on file did not match the 2013 Tax return and that I owe $1,867 + $91 interest.
I provided them the documentation that $1,867.12 was withheld already on 1/09/2013 and Im not sure why Turbo Tax did not include this but I do not owe.
I have now received a reply that"The explanation submitted in your response does not allow us to change our proposal. Even though taxes were withheld, the income should be reported on your tax return. We have included the prepayment of the $1,867.12 in our calculations. An additional 10% tax is proposed + interest." The IRS notice went on to say I need to consent to the additional tax, penalties and additional interest by September 27 and that I cannot contest this in U.S . Tax court.
How is this ok since I already paid this and I cant challenge this in Tax court?
1 Answer from Attorneys
The rules for what can be done in a fight with the IRS are complicated. This is not a diy matter. Do yourself a favor and talk to a tax lawyer.
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