Tax overdue and N-400

G

Godhavari

Registered Users (C)
We are ready to send out N-400. Couple of weeks back IRS sent us some auditing kind of thing where they say we owe some money for 2005 tax return.
We talked to our tax guy and he said it is a mistake from IRS and upon replying we will get back money instead. We haven't sent the paper work back yet.

N-400 has a part asking about tax overdue. What should we answer here?

Thanks.
 
Until you have written explanation from IRS that your tax liability is zero you have taxes overdue so you have to answer yes. I would suggest resolving the matter first before filing N-400.
 
Funny enough, I got a similar notice from the IRS and it also turns out they owe me money instead.

I think they're desperately trying to get money from anywhere they can due to a major revenue decline in the bad economy.
 
Thanks.
So,

1. Should I wait until IRS sends me a letter saying everything is ok and submit N-400 answering NO to the tax overdue question

OR

2. I start correspondence with IRS and parallely submit N-400 answering Yes.

Thanks.
 
IRS is not going to confirm everything is OK until after they have received your paperwork and reviewed it.

So your choices are:

1. Respond to the IRS, answer Yes on the N-400 and file it. If it's not resolved by the interview, explain the situation and let the interviewer decide what to do.
or
2. Respond to the IRS, answer No on the N-400 and file it, If it's not resolved by the interview, explain the situation and let the interviewer decide what to do.
or
3. Wait until the situation is resolved, then file the N-400.


Personally I wouldn't choose 1 if the IRS accepted the original return and I know I don't owe them. I would answer No and explain the situation to the interviewer (with a copy of the tax return and a written explanation of why the IRS is wrong), then they can decide to change it to Yes if they want. Answering Yes on your own is like you're admitting that you owe overdue taxes.

But make sure you're getting good tax advice. If this is just some H&R guy or a "tax consultant" and not a tax attorney or accountant, don't take their word for it that the IRS is wrong.
 
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Jackolantern said:
IRS is not going to confirm everything is OK until after they have received your paperwork and reviewed it.

So your choices are:

1. Respond to the IRS, answer Yes on the N-400 and file it. If it's not resolved by the interview, explain the situation and let the interviewer decide what to do.
or
2. Respond to the IRS, answer No on the N-400 and file it, If it's not resolved by the interview, explain the situation and let the interviewer decide what to do.
or
3. Wait until the situation is resolved, then file the N-400.


Personally I wouldn't choose 1 if the IRS accepted the original return and I know I don't owe them. I would answer No and explain the situation to the interviewer (with a copy of the tax return and a written explanation of why the IRS is wrong), then they can decide to change it to Yes if they want. Answering Yes on your own is like you're admitting that you owe overdue taxes.

But make sure you're getting good tax advice. If this is just some H&R guy or a "tax consultant" and not a tax attorney or accountant, don't take their word for it that the IRS is wrong.
Click to expand...

I agree with Jackolantern - I would answer "No" and attach an explanation with your N-400.
 
vdostoi1 said:
I agree with Jackolantern - I would answer "No" and attach an explanation with your N-400.
Click to expand...
I wouldn't attach the explanation; I would bring it to the interview. If it is resolved before the interview, the explanation would not be necessary.
 
Jackolantern said:
1. Respond to the IRS,
let the interviewer decide what to do.

2. Respond to the IRS,
let the interviewer decide what to do.

3. Wait until the situation is resolved, then file the N-400.
Click to expand...

JOL,

I would **never** suggest the first two options. Leaving it to the interviewer to decide could cost the OP his 700-bucks or make for long delays waiting on the IRS to sort it out and then issue transcripts.

A prudent person would have clear Tax transcripts covering the previous 5 years before lodging the N-400.
 
WhichWay2Go said:
JOL,

I would **never** suggest the first two options. Leaving it to the interviewer to decide could cost the OP his 700-bucks or make for long delays waiting on the IRS to sort it out and then issue transcripts.
Click to expand...
I am not suggesting the first two options either. I was just pointing out the 3 available choices, and saying that I would NOT choose #1. Up to the OP which one to choose.

But all 3 options have the potential for delays, and it is impossible to predict which would have the longest delay: Options 1 and 2 would have no delay if the interviewer accepts the explanation. But they could have the longest delay if the interviewer demands to see confirmation from the IRS. Option 3 is a guaranteed delay, because that involves waiting for the situation to be resolved before filing the N-400.
 
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Jackolantern said:
Options 1 and 2 would have no delay if the interviewer accepts the explanation.
Click to expand...

I agree, but the risk factor is unknown but I am not sure the IO would have the authority (or willingness) to accept a verbal explanation of a 2005 outstanding Tax amount. I would think that is a pretty cut and dried issue. Outstanding Taxes = denied.

If denied it's gonna cost another $700 to reapply when the IRS sorts it out. Way too risky to my thinking.

On option 3 we are talking of two different delays. Sure you have to wait on the IRS but there would be no N-400 delays once that is done.

If it were me, it is a no brainer. Wait until it is all cleared by the IRS then lodge the N-400. I have always erred on the side of the greatest likelihood of success. :) And dropping another 700 bucks is not success in my book.
 
WhichWay2Go said:
I agree, but the risk factor is unknown but I am not sure the IO would have the authority (or willingness) to accept a verbal explanation of a 2005 outstanding Tax amount. I would think that is a pretty cut and dried issue. Outstanding Taxes = denied.
Click to expand...
I wouldn't expect them to accept a verbal explanation. I would provide proof that the IRS previously accepted the return as it was originally filed, along with a written explanation why the latest notice from the IRS is wrong, and a copy of the return. The IRS sending the notice is not a final determination that there are any outstanding taxes; it's just them saying that you apparently owe something and giving an invitation for you to submit info to challenge that finding.

And don't forget that both options 1 and 2 carry the possibility that it will be resolved before the interview.
 
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