Yesterday I received a computer-generated letter from the IRS regarding the first of four 1040 returns I sent in mid-December. I check the mailbox everyday, thinking the notice from hell may arrive, though I really did not expect to hear a word for months. So I wondered before opening it, am I about to lose my sense of calm gained by renouncing and trying to focus, at least occasionally, on something else. I posted a bit about this yesterday but was unable to copy/paste the letter; Petros asked today that I include it in a new post.
For starters, I am not alarmed about this letter and I don’t think anyone else should be either. While it is clear that someone must have read my letter (see original letter), the rest of it is obviously computer-generated. It is a mistake as I clearly do not owe any taxes. What is rather odd is the fact that nowhere in the letter, is any figure given for the failure-to-file penalty.
I wasn’t quite sure about it at first so phoned my sister who is a CPA. She said it was strange that there was no penalty amount, considering the type of letter it is; a standard, 854C which is sent to inform a taxpayer that they have the right to appeal and explains how to do it. She has better and quicker access to the IRS than I do and she was going to phone and see if she could get a general explanation as to why it was issued in the first place with no taxes due and why would it be sent without a penalty figure included.
I am posting it because it brings up the question of how is IRS going to treat our incoming returns, in light of the December 7, 2011 Info Statement issued by the IRS. While many feel it was less-than-enlightening, since my particulars are almost exactly as in “Example 4,” and I felt okay about sending the returns wanting to get the next layer of this unending, unnerving, anxiety-producing mess over with. My sister indicated that it was unusual to think the IRS would treat the returns any different than anyone else’s (in the US) notwithstanding the Canadian address. Not as an excuse but simply as a possible indication that the word has probably not trickled down to the worker bees yet. She indicated that the return might simply be scanned and entered into the system while the human doing it paid no attention at all to any details. Hopefully, she’ll be able to to find something out soon. She is rather busy, tax season and all.
What I am hoping, is that anyone with a similar situation to mine, will feel reassured, once this is clarified. The other positive, is that I see nothing about being automatically put into the “new and improved” 2012 OVDI. I was afraid that it was implied in a few things I had read on lawyer and accountant sites, that they may start to do this. I do expect that at some point, that may be the only option they offer and it was one reason I wanted to act right away with filing and then renouncing. One of the sites indicated that by leaving any closing date open, it allowed them to avoid raising the penalty of 27.5%. At the moment, I don’t remember which one it was but I can look for it if anybody needs that information.
What do you think?