So I get a nice little letter today from the IRS saying that I owe them 1750$ from back in 2010. They're saying the 8000 I pulled from my Roth is income and should be taxed apparently as such. This 8000 was below the 10000 I'd contributed because of the 08 crash, so I knew I wouldn't get penalized since I was just getting principle out.
Any advice on what to do? Just send them the Vanguard documents showing them that this is just pulled from my IRA, and there is no way in hell this should be taxed as income? F#@$ this, CFA in 2 weeks, this is the last thing I need to deal with.
I had a similar notice awhile back from IRS regarding my stock transactions from 2009. Two things I found helpful: 1) I found that the due date of 30 days is really 90 days by law. The rep told me this when i called IRS. So you have much more time. 2) The amount that is listed is only a proposal by the IRS and is not a billing statement. So calm down, set aside your notice, and focus on your CFA for the next few weeks.
When youre done with CFA, just locate the necessary documents to prove your case, and call IRS and talk to an agent. they were actually real helpful/sympathetic for my case.
I feel for ya. I just got the same thing saying I had 12k in cap gains in 2010 and owe them 3k in taxes. And I can assure you that I had zero cap gains in 2010 (although the 12k would have been nice.
I am also doing CFA in 2 weeks, so I'm not touching this B.S. until after the test. which I recommend you do as well.
I think they are prolly doing this on purpose to see who will actually pay so that they dont have to deal with fighting it. Probably a new way to fund the insane spending they got going on.
just ignore it. they'll go away.
no they won't
it's worth trying. OP, ignore them and let us know how it turns out.
They're more like guidelines anyway.
If I were you I will bust my *** trying to find a bill or any expense that will reduce my tax which I forgot about, that would annoy them more than anything, people sometimes forget about obvious expenses that can help them when paying taxes, isn't there anything? although I am not very sure if that is allowed, it should be, you need a CPA to answer that.
If OP did everything correctly, then he does not owe taxes. That is one of the reasons I like Roth IRAs - you can withdraw any original contributions without triggering penalties/taxes. (Of course, you are not allowed to return the funds you withdraw.)
What do you mean by not allowed to return the funds?
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