Let’s take a ride outside the taxi this week, passengers. After all, a cabbie gets a day off once in a while, to be entirely spent tying up loose ends. You see, my dad died.
Oh, no condolences necessary. It was a good death. He was eighty-four, family was all around, and it all happened pretty fast – within a week and a half, from fall to ICU to coma, before domino organ failure – courtesy of Suburban Hospital’s specialist miscommunications to the subsequent doubling of his blood pressure medicine. (Did you know that medical mistakes are the third leading cause of death in the U.S.? No. Really. I heard it on NPR!)
Dad was living life. He had a loving wife of twenty-plus years and a vibrant social scene. And he was witty and fit right up to the end. (Well, goofy and fit.) He slipped into the coma as the kids and I were airborne flying out to D.C. red-eye from San Francisco. God bless his wife Lenore, my siblings gave word that he was hitting on the young brunette ICU nurse right up to the end.
Anyway, as death goes it was a surprise. It wasn’t his Chronic Lymphocytic Leukemia that did him in. Dad had been diagnosed with C.L.L. (genetic in males, mind you) at age seventy by his doctor, who at the time told him that he had twelve years to live. Of course, when you tell a seventy year old man he has twelve years to live, he gets sorta giddy and asks for that in writing. At least, my dad did. That was Martin N.M.I. Sack. (“No middle initial,” he’d laugh.)
So yeah, dad died, Thanksgiving 2014. (Like I said, no condolences necessary.) A solid man, sweet, family minded, educated, with a sense of duty that one finds in children raised during WWII, and in veterans. (Dad was an Army First Lieutenant in charge of a motor pool in Seoul.) True to his nature, he’d held onto to some various safe bet stocks and bonds, and tax-savvy retirement accounts, for a long enough period that he could leave me and my three siblings a little money. Money that I have long since burned through. (Cab driver in the age of Uber. Blah, blah, blah.)
What’s this all about? Well, if you’ve been following the weekly reports of one Citizen’s Cab #1015, you already know that I am still driving a taxi out of a strong compulsion to service. (Okay, and a highly questionable nagging of faith.) Like father, like son.
Aside: Not the faith part. Dad was a practical man, an atheist, and a gastronomical Jew. (I.e., heritage.) Born in Brooklyn, raised in Queens.
And so, my passengers, it is here that I offer to you the fruit of a yeoman’s work. For, I have gone before you… Apparently, it takes the IRS two full years to process any discrepancies in your return, before mailing out a “proposal” to settle your (now) tax liability for the low, low, price of just $2864! ($184 interest, included.) Act NOW! (Or within thirty days, lest you’re found “delinquent,” and that “proposal” now an actual bill accruing interest and penalties, fast.)
Let me introduce you to the CP2000
Five million Americans will receive this computer-generated letter from the IRS this year alone. (This means YOU!) Well, okay, if you receive 1099’s from a middle man involved in your money AND you did not report that exact amount of untaxed income in the 1099 section of your handy dandy TurboTax tax filing software. (E.g., Square credit card processing, Cabulous app hail payments, or, uh, inherited stocks from your dad that you may have cashed in, on account of the age of Uber. Blah, blah, blah.)
OR, if you didn’t receive said 1099 by the January 31st deadline (from say, the new owners of the Cabulous app) and you identified that income elsewhere in your return, anxious to e-file right away on February 1st and get that Child Tax Credit and Earned Income Credit direct deposited into your checking account, lickety-split.
OR, in my case, TWENTY-SEVEN pages of discrepancies involving a HUNDRED stock trades that you liquidated!!! Cost basis?? What the HELL is COST BASIS!?!
Let me introduce you to Cost Basis
Now, having worked various admin and ops jobs in various offices for over a decade plus in my past life, and managed bands, and having been the kind of teenager to research and successfully execute the production of a fake birth certificate for the purpose of obtaining a REAL fake ID from the Washington, D.C. Department of Motor Vehicles (and in light of the shared gene pool with one Martin N.M.I. Sack), I studied, detailed and documented every possible angle. Scans, pictures, phone calls, the Forbes archive, Business Insider, IRS.gov, as well as spending WAY too much time on every CPA forum to be found online. I was NOT going into the ring with the Internal Revenue Service, pants down.
- Do NOT call your local IRS branch, address listed on the upper left hand corner (page 1 of 27) on your CP2000! What are you, STUPID? You want to put yourself on the radar of your friendly neighborhood auditor?? (Recall: at this point, your CP2000 is just a “proposal,” subject to be corrected should you *SIGH* prove the IRS wrong.
- No, you want that 800 number in the upper RIGHT hand corner of your CP2000 (page 1 of 27). That’s the cubicle farm in Philadelphia where there’s a human more than happy to help, should you successfully navigate the IRS’s labyrinth of automated “press 1 for” instructions, with each progressive option miring you (by design) within enough ambiguous layers of bureaucracy that somewhere in Mordor an onion cries, after which, if you have solved the “press 1 for” riddle successfully, you will find yourself at the gates of the great Kingdom of Sitting on Hold for Sixty-five Minutes – as signified by a pretty snappy bossa nova, before your ultimate chance to slay the dragon!
- Something to keep in your pocket, is the one allotted “get out of the pillory” 30-day extension you can request to respond to your CP2000, should you need more time to forge your armaments. (Like when your receive your CP2000 between Thanksgiving and Christmas.)
- Of note, is the existence of the TAS (Taxpayer Advocate Service), an organization within the IRS with local branches, dedicated to helping the low income with their tax issues for free, IF said low income have FIRST tried and FAILED to get a timely response from the IRS, uh, with Damocles sword on high. While I did consider this avenue for understanding the claims on my CP2000, it meant exposing myself first to a recorded phone call with or documented letter to the IRS. And the whole setup kinda reeks of Public Defender. (“Hi, nice to meet you, Alec. I KNOW you’re innocent and have an airtight alibi, but it’ll take MONTHS to prove your case. Just plead guilty to murder in the second and you’ll be out on parole before you know it!”)
- Now, with all of this in mind, I came very close to just going with the $40/month payment plan for 72 months, exasperated and under the assumption that I messed up handling dad’s inheritance TWO YEARS AGO! But, I’m a cab driver And I’m not so sure how admitting wrongdoing to the IRS might have affected any heretofore lack of interest in me, and my previous years’ taxi driving returns.
- No, it looks like a tepid tip toe into the dragon’s lair! After all, the CPA forums all say that CP2000’s are quite often wrong, and many times can be successfully slain, er, nullified. They also say, if you are The Chosen One who can win Excalibur from the stone, and actually reach a HUMAN via the IRS’ 800 number, and if you are nice to them, they may actually be able to help. AND there have been glorious tales told, albeit select, that should YOU be in the right, they can even fix it OVER THE PHONE! (This myth has been repeated near and far, from Merlin to Mordor, to blog.taxaudit.com.) But then again, I may get stuck being forced to respond via certified mail with a Schedule D and the dreaded Form 8949, filled out with documentation. (Shudder!)
Alas, my options dwindled to: A.) Admitting wrongdoing and going with the payment plan – along with a potentially unrequited love from the IRS. And, B.) Calling the IRS cubicle farm call center in Phili – a prerequisite before getting help from the TAS, should I want it, and also potentially putting your driver under the microscope after speaking with a HUMAN – as opposed to responding with a check to my computer generated “proposal.” No, it seemed there was no other choice for your champion, but to forge down into the cave…
Okay, I promised you “cost basis.”
Wednesday, November 29, 2017
My day off – 2:45PM:
“Press ‘1’ to speak with a robot. Press ‘2’ to speak to a robot. Press ‘3’ for tax returns filed in years 1905 through 1906. Press ‘4’ to hear these options, again.”
1, 1, 1, 3, 2, and…
Girl from Ipanema! GIRL FROM IPANEMA! BOSSA NOVA!
Sixty-five minutes (and an episode of Gunsmoke) later…
“Hello, this is Ms. Spell, ID#: 100-727-176, how may I assist you today?”
Social Security #: 555-55-5555, “Hi! Oh, my God! A HUMAN! How ARE you, today! Wait. I’m taking notes. Could you please repeat your ID#. And did you say your name was Ms. SPELL??”
ID #: 100-727-176, “ID number 100-727-176. And that’s right, sir. Ms. Spell. S-P-E-L-L.”
Social Security #: 555-55-5555, “THAT is the GREATEST name I have EVER heard! Oh! I HOPE your day is going well, and you’ll be off soon. I sure bet it’s no fun dealing with people have tax problems all day long! You are a saint, Ms. Spell. A real SAINT!”
ID #: 100-727-176, “Thank you, sir. What is the nature of your call, today?”
Social Security #: 555-55-5555, “Well, I got a CP2000 for tax year 2015. I have to be honest, I’m just a poor, single dad, cab driver. And that was the year I inherited a little bit of stock from my father, who passed at Thanksgiving. I may not have handled my return right that year, as it was all a pretty unusual year for me, financially. Could you have a look and let me know what I did wrong, Ms. Spell?”
ID #: 100-727-176, “I’d be happy to help, sir. May I have your social security number, please. And I’ll need you to verify some information, first.”
Five minutes later…
Ms. Spell, “Well, Mr. Sack. It looks like you have a cost basis of $0 on about a hundred sales of stock, mostly with E*Trade. That would be incorrect, if you inherited these stocks. You need to contact E*Trade and get the correct cost basis for these trades. Actually, it looks like most of these trades are not high dollar amounts. Hmm. If you just take care of these six larger ones, you may owe nothing at all. E*Trade reporting a $0 cost basis on those six pushed you into a different bracket and reversed your $1000 Additional Child Tax Credit and your $900 Earned Income Credit.”
Mr. Sack, “Wow! REALLY??? You ARE the BEST, Ms. Spell! Uh, but, I’m just a cab driver, a single dad, and poor. I’m a little confused about cost basis.”
The CPA forums say it’s the capital gains or losses on a stock trade between dad’s date of death, and when I sold the stock. Being that it was only like a three month period, how significant could it be? Smaug is going DOWN!
Ms. Spell, “Well, Mr. Sack. Cost basis is the difference of when you received, or bought, the stock, and the gains or losses when you sold it. And it looks like you sold most of these just a couple months after taking ownership. E*Trade reporting your cost basis as $0 to the IRS on these trades makes it look like it is ALL capital gains. I’ll give you the dollar amount on those six larger ones, and you just call back and tell us the corrected cost basis for each over the phone. We should be able to close your case at that point, and bring your $2864 proposal back down to zero, if everything goes as I suspect. Your Additional Child Tax Credit and your Earned Income Credit will automatically reinstate in the system, once you call back with those numbers.”
Aside: Uh, I’m quite POSITIVE, after hours reading Forbes archives, and breathing CPA forums, that the reference point is dad’s date of death, NOT the date I took ownership. But, who am I to argue with the IRS?
Mr. Sack, “OH MY GOD! I LOVE YOU, Ms. Spell! That is SUCH a load off of my mind! MERRY CHRISTMAS!!!
And oh, if it’s not a problem, do you think I could get a thirty-day extension? It being the holidays and all, I just want to make sure I have enough time to do this right.”
Ms. Spell, “Well, I’m just glad to help. I’ll adjust the response date to your CP2000 out thirty days, to January 12, 2018. And you have a very Merry Christmas, too, Mr. Sack.”
I navigate to E*Trade’s website, to see what I can glean about the cost basis on the six trades Ms. Spell annotated.
In the FAQ’s at their website, E*Trade notes that they have an “uncommon” method for reporting cost basis to the IRS.
Wednesday, December 13, 2017
My day off – 11:20AM:
1! 1! 1! 3! 2! And…
Girl from Ipanema! GIRL FROM IPANEMA!
Sixty-five minutes (and an episode of Bonanza) later…
“Hello, this is Ms. Kilroy, ID#: 100-727-665, how may I assist you today?”
Social Security #: 555-55-5555, “Hi! Oh, my God! A HUMAN! How ARE you, today! Wait. I’m taking notes. Could you please repeat your ID#. And did you say your name was Ms. Kilroy?”
ID #: 100-727-665, “ID number 100-727-665. And that’s right, sir. Ms. Kilroy. How may I assist you, today?”
Social Security #: 555-55-5555, “Well, I called a couple weeks ago and spoke to a WONDERFUL woman about my CP2000. Ms. Spell. You’re in Philadelphia, right? Do you know Ms. Spell?”
ID #: 100-727-665, “I do not, sir. I am at the call center in Philadelphia. But there are hundreds of workers operating out of this center. May I have your social security number, please. And I will need to verify some information, first.”
Five minutes later…
Ms. Kilroy, “Well, Mr. Sack. I see the trades you were referred to. Now, you will just need to fill out a Schedule D, and a Form 8949, and mail it along with supporting documentation to the local IRS office address listed at the upper left of page one of your CP2000.”
Mr. Sack, “Uh, um… I am very sorry, Ms. Kilroy. Please do not mistake me as being argumentative, but Ms. Spell assured me that I could just call back with the cost basis amounts I got from E*Trade and just give them to you over the phone.”
Ms. Kilroy, “I don’t think we are able to do that, Mr. Sack. But let me check with my supervisor. You’ve been so nice. Can you hold.”
Mr. Sack, “Of course! Oh, thank you! Thank you for asking!”
Smaug just got a good claw swipe in, an inch from MY HEART!
Eight minutes later…
An excited Ms. Kilroy comes back, “Well, Mr. Sack. Thank you for holding! I spoke with my supervisor and he said that you are correct, and we CAN take that cost basis information over the phone.
What are the numbers? Let’s see what we can do here!”
Mr. Sack, “Oh, thank you! Thank you, Ms. Kilroy! You are the BEST!!”
Over the next couple minutes, Kilroy plugs in the cost basis on the six trades in question, and I can literally hear Smaug’s gold cha-ching’ing! into my sack, like a slot machine pushing bad mixed metaphors.
Ms. Kilroy, “Well, Mr. Sack! That information brought your liability down to zero! Why don’t we try some more things here and see if we can maybe even get you some money BACK!”
Mr. Sack, “ZERO?? GREAT!! Oh, no, Ms. Kilroy! Zero is just FINE by me! Let’s just leave well enough alone! Thank you SO much! This is SUCH a load off my mind! You are the BEST!
Oh, and I guess the IRS sends out some kind of confirmation letter, yes? When should I look for that, Ms. Kilroy?”
Ms. Kilroy, “Oh, why, yes you should be getting a letter. I think you should probably give it a few weeks, maybe call back if you haven’t seen one by the end of January.”
Mr. Sack, “Sounds good, Ms. Kilroy. And thank you, again. There is surely a place in heaven waiting for you!”
Ms. Kilroy, “Alright, Mr. Sack. You have a GREAT rest of your day, TOO!”
Post-script: Okay, that’s not really the end. My moth, er… editor says the subject matter of this week’s report is too boring to be this long, and that our study in Kafka should end with Kilroy. (And she’s usually right.) So, if you’re done there on the toilet, you can move on with your life now. Otherwise…
Thursday, February 8, 2018
NOT my day off – Noon:
Citizen’s Cab #1015 is in the driveway here at a three flat Victorian on Post Street, which me and the boys call home, occupying the attic flat. After plugging in some preliminary numbers into TurboTax last night, I just realized the party is over with respect to the $1000 Child Tax Credit that I’ve looked forward to for the last seventeen years for my older kid, Leo, whom I declare. Apparently, a parent loses out on the CTC starting in whatever tax year the kid turns seventeen! I just assumed all this time that I had until the boy turned EIGHTEEN!! I mean, what the hell!?
Well, I will still get some money back for the Earned Income Tax Credit. But now I’m waiting on the new owners of the Cabulous app to send me a 1099, for the first time in seven years! They were scrambling putting out messages through the app, only two weeks ago, to call India and hand over my SS# and address so they can send me their 1099. Thing is, NO company sends out 1099’s for income under $20K! Raj said it would come showing that I made $4K via the app for the entire year, the first half of the year before the new guys took ownership included! And I happen to know that I made more like $8K through the app for the whole year!! So, not only is this 1099 not necessary. But, it’s likely wrong. And regardless, it was legally due in my mailbox on January 31st! It is not only likely unnecessary, and wrong, but LATE!! Raj said it was sure to hit my mailbox on Friday. LAST Friday! And I can’t file for my return until I know if I’m actually GETTING a 1099 from Cabulous, which word at the lot has as dubious. And, at word 3,218 in this report, we ALL know TOO WELL what a discrepancy in a reported 1099 means! CP2000!!!
Anyway, like I said, #1015 is in the driveway, I was near, and I need to piss…
Hey! There’s a USPS tag on my door. I missed a package. DOH!
But, hey! I saw the Asian mail lady rolling down my block, as I was pulling in. (I’m expecting a pickup for my Fender Rhodes 1974 Suitcase 88 electric piano. SWEET!) I DART down the block and catch my mail lady.
Huh? She needs ID? It’s certified mail? Return receipt?? Hey, why is this plain #10 envelope so damn THICK!!
Let me introduce you to the CP3219A – IRS Notice of Deficiency
I’m dejected. This is probably going to screw up my return. What the hell, Kilroy?? I figure I’ll wait until Wednesday, my day off, to deal. Besides, surely there’s no one manning the call center in Phili at 5pm, Pacific. In any event, it looks like Senator Rand Paul is shutting down the government, again, tonight. And I looked it up, these IRS call centers get half their staff furloughed during partial shutdowns. (Which is a fact I wouldn’t wish even my arch enemy, Smaug, to have to be privy to!) What makes that half to be considered as “essential” workers is that they are only to answer some questions, and process INCOMING checks to the federal government! Refunds are on hold until Uncle Sam reopens. Yup.
Ah, screw it. If there’s any chance to get this out of the way…
1! 1! 1! 3! 2! And…
Girl from Ipanema! GIRL FROM IPANEMA!
Ninety minutes (and episodes of both Chris Hayes AND Rachel Maddow) later…
“Hello, this is Mr. Snyder, ID#: 100-162-029,” in a quite thick lisp, “How can I help you?”
Social Security #: 555-55-5555, “Oh, my God! What are you doing working? Isn’t it late in Philadelphia? Isn’t the government shut down now? You’re not furloughed??”
ID#: 100-162-029,”Actually, I’m in Fresno. We’ve gotten no notice to leave, yet. There are special instructions set aside during filing season for some call center staff to remain on, during shit down.”
Wait… FRESNO??? That’s my LOCAL IRS OFFICE!!!
These are not the droids you’re looking for. These are NOT the droids you’re looking for!
Social Security #: 555-55-5555, “Uh, forgive me. I’m taking notes. I got Mr. Snyder. But could you repeat your ID#, please?” Extra charm, Al! “And boy, I hope you’re holding up well this tax season. You guys NEVER get the appreciation that you truly DESERVE! Thank you for your service to our country, Mr. Snyder. It’s people like you that make America GREAT!”
Mr. Snyder, “It’s ID#: 100-162-029. And how may I help you?”
Mr. Sack, “Well (heh-heh), as you can see, I’ve been documenting my calls regarding a CP2000 I received last November. A wonderful woman bay the name of Ms. Spell at the call center in Philadelphia singled out six trades that I needed to call back with to update their cost basis. She said it would bring the $2864 settlement proposal in the CP2000 down to zero. I did get that information from E*Trade, and called back at 11:20AM on December 13th and spoke with a Ms. Kilroy. Do you need her ID#?”
Mr. Snyder, “(Sigh) Let’s please start with your social security number. And then, I will need to verify some other information, first.”
Five minutes later…
Mr. Snyder, “Mr. Sack, I see that you have about a hundred trades that need their cost basis updated. We cannot do this over the phone. We can only take that information over the phone when it’s under ten trades. You will need to fill out a Schedule D and a Form 8949, and mail to us here in Fresno along with supporting documentation. ”
Mr. Sack, “Uh, Mr. Snyder. Please do not take this as argumentative, but Ms. Spell said I would just need to give the six larger trades’ updated cost basis over the phone, and that would bring me down to zero liability. And when I called back and spoke with Ms. Kilroy on December 13th with those numbers, she took that information, plugged it in, and assured me that I was clear. Ms. Kilroy said that I’d be getting a confirmation letter around January 6th. I guess I should have called when it didn’t come. I just assumed it was taking longer. Is there nothing you can do?”
Mr. Snyder, “(SIGH) Let me have a look.” Skeptical lisp, “I can’t promise you that your balance will go down to zero. Also, to inform you, the CP3219A Notice of Deficiency is still just a proposal. It can be challenged. And it would not hold up a tax refund. (Click, click, click, click.) Ah, I see those six larger trades. But there has been no update to their cost basis. Let me have your numbers. We’ll see what we get.”
Mr. Sack, “Ah! I had a feeling that Ms. Kilroy just didn’t hit ‘save’ when we were done. That MUST be it!”
I give Snyder my cost basis for the six E*Trade culprit trades. And…
Mr. Snyder, “Hey! It brought your $2864 liability down to TWO dollars! Well, we can surely close this out, Mr. Sack. I’ll put my ID # in the notes, and you should be getting a confirmation letter verifying that your case has been closed… in about three weeks. Is there anything else I can help you with?”
Mr. Sack, “WHEW! Why, NO! I guess that’s it! WOW! Thank you, thank you, Mr. Snyder! You are THE BEST!! You’ve taken SUCH a load off of my mind! I do hope you have an easy shift. And I hope you get off soon! THANK YOU!!”
Mr. Snyder, “I’m here until 1 in the morning. But, you have a pleasant evening, Mr. Sack. And again, you should see that confirmation letter in just a few weeks.”
Please SHARE if so inclined, folks!
Photo by Alex SacK