IRS WTF? Morons

[crazyfingers]

We got a letter from the IRS that under what they call the "Withholding Compliance Program" they have instructed my employer to set my tax withholding status to Single and dependent allowances to 0.

According to the IRS the purpose of the program is to

"The mission of the Withholding Compliance program (WHC) is to ensure taxpayers who have serious under-withholding problems are brought into compliance with federal income tax withholding requirements. The program uses Form W-2, Wage and Tax Statement, information to identify taxpayers with insufficient withholding.

The goal is to correct withholding to ensure that taxpayers have enough income tax withheld to meet their withholding tax obligations."

So in other words they want my withholding high enough so that I will get a refund and will not owe additional tax at the end of the year.

But for at least the last 15 years I have never owed taxes at the end of the year. In fact we can generally expect a couple thousand dollar refund based on the fact that i am married, my wife does not have an income and I have three dependent children.

My employer tells me my W-4 is all very reasonable and that the IRS is crazy to demand that they withhold my taxes as if I was single and no kids. It will only significantly reduce my take home pay for the year and increase my tax return from a couple thousand to possibly 5 figures but they are required to comply until I can prove to the IRS they are morons for doing this in the first place.

So now I have to send the IRS a bullshit letter with all kinds of documentation when they should just have noticed from all my previous tax returns for at least 15 years since I have never owed any tax at the end of the year.

What kind of moron at the IRS would just decide to do this based on zero reason to do so?


Eta: By the way, if i don't send a letter detailing to them that they are moron shitheads within a month they will fine me $500.

 

[T.G.G. Moogly]

I predict it will take 1 to 2 years for the IRS to get it right. Whatever you do don't send them any money for fines or whatever. Definitely do the letter thing.

 

[ideologyhunter]

My favorite tax issue is with the Ohio Dept of Taxation. One year I decided to be extra-scrupulous in listing my etail purchases where tax had not been assessed -- in order to pay sales tax on those items retroactively. So -- this raised my tax bill a bit -- and -- beautiful detail, belonging in Bleak House or Bartleby the Scrivener -- they assessed me a TWO DOLLAR FINE because my prepays were now deemed to be undercalculated for that year. Gotta love the bureaucrats who made up that fine. Actually, it made me laugh enough that I got my money's worth. Sure, here's yer two dollars for me being honest.

 

[Malintent]

I wasn't aware that withholding was even a requirement. Quarterly estimated payments ARE required, and wage withholdings are supposed to be a CONVENIANCE for you to ensure those payments are made on your behalf, by your employer... it is a benefit.. I thought.

Prolly a stupid idea, but if your employer is willing to compensate you as a non-employee, and report your income on a 1099, then no withholdings would be made at all (you would need to send them estimated quarterly payments).

On a side note, the IRS sent me a letter a few years ago questioning my "non-reimbursed employee expenses".. mostly because I have a very expensive to maintain home office... Since they forced me to go over every little detail of my return and justify everything (which was all totally legit), I decided to start depreciating the portion of my vehicle used to travel between offices (not to commute to an office). So, at the end of it all, I got back an additional $300 of overpayment from them.

that'll teach them to question my return... if they do it again, I'll increase the square footage of my office by 1 foot and recalculate so they have to send me a check for $0.30 more... ha!

 

[Under the Rose]

It sounds like your revenue service is just as cocked up as ours in Canada.

I have had three rounds of exchange with said agency, two which were when I was running a small business. Those cases were documented and found in my favor, no surprise.
In a third instance, I had withdrawn and replaced funds from a tax free savings account while I was in a state of shock following an accident. I had done nothing wrong but by the
very ambiguous rules of the account, any funds removed could not be replaced until the following year err there would be a tax penalty. I was penalized but in subsequent discussion
they reversed their decision as many other people were also making similar mistakes, even under the auspices of their financial institutions who likewise did not understand the wording.

So, either the IRS are launching a software campaign that should be beneficial for the majority that does not look at each account case by case or else your country is in such bad shape
that it requires these extra withholding funds for operating expenses.

I sincerely empathize with your situation.

 

[crazyfingers]

I had asked for an estimate from my employer what my tax withholdings will be if we can not get the IRS to see reality. Based on that information, in 2017, if the IRS digs in it's heels and will not see reason I will have about a $16,500 Federal Tax refund. What fucking morons.

 

[Jimmy Higgins]

I had asked for an estimate from my employer what my tax withholdings will be if we can not get the IRS to see reality. Based on that information, in 2017, if the IRS digs in it's heels and will not see reason I will have about a $16,500 Federal Tax refund. What fucking morons.

Well the good news is, you can buy a Honda Fit in March.