Quote:
Originally Posted by Armand16
Does anyone know what dollar amount or ratio triggers this red flag?
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I made a mistake (an honest mistake
) on my taxes one year and I am not a big baller by any means and they came after me. Long story short: fell from treestand, broke pelvis, owed $40k in medical bills due to no insurance at the time because I thought paying for health insurance was crazy for someone my age
. I was able to settle for $10k and never thought anything of it. This was in 2006 I believe. Everything going fine until 2010, I got a letter from IRS stating I owed $8k in back taxes and penalties
. The reason was that the $30k was taxable and I didn't report it, didn't know to report it, after all I had just paid $10k outta pocket for being stupid in a treestand. When I got that letter, it was like someone shot my dog. Let me be the first to tell you that the IRS does not play games. There was nothing I could do to try and settle or get them to drop the penalties. Don't frick with the IRS!