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4 This happens frequently with tax software, unfortunately. Make sure to also check if the extension was actually accepted by the IRS or just transmitted by TaxAct. There's an important difference - transmission doesn't guarantee acceptance. If TaxAct tries to tell you "we transmitted it" without confirmation of acceptance, that's not good enough. When you speak with the IRS, ask them to check if there's any record of an extension being filed for your EIN, even if it was later rejected. Sometimes extensions get rejected for technical reasons but still show up in their system. Also, act quickly! The longer you wait to address this, the harder it can be to get penalties removed.
11 Would it be better to call the IRS first before dealing with TaxAct? I feel like TaxAct might just try to cover for themselves.
4 I'd actually recommend contacting both, but start with TaxAct since they can provide documentation faster. The IRS will want to know what happened on TaxAct's end anyway, so having that information first will make your IRS conversation more productive. You make a good point about TaxAct potentially being defensive, so be direct with them - ask specifically for confirmation records showing what happened with your extension transmission. Request a formal statement from them about whether the extension was actually received and accepted by the IRS, not just whether it was transmitted from their system. Most tax software companies keep detailed logs of all transmission attempts and IRS acknowledgments.
19 Has anyone else had other issues with TaxAct this year? I've used them for years but this filing season they seemed to have way more glitches than usual. My personal return had to be resubmitted twice because of some weird transmission error.
Don't forget that while you're waiting for the reconsideration process, the IRS can still move forward with collection efforts unless you specifically request a collection hold. Make sure you include a line in your letter requesting that collections be suspended while your reconsideration is being processed.
Just want to add my experience - I submitted an audit reconsideration last year and got denied, but then I submitted a second one with better documentation and they accepted it. Don't give up if the first attempt doesn't work! Make sure you address whatever specific reasons they give for denying the first request.
One thing nobody's mentioned yet - if you think you're due refunds for some of those years, be aware that you can only claim refunds within 3 years of the original filing deadline. So for tax years 2021, 2022, and 2023, you can still get refunds if you're owed them, but for 2019 and 2020, that money's probably gone forever if you were due a refund. But you STILL need to file those returns to get in good standing with the IRS, even if you can't get the refund money anymore.
That makes me so sad to think I might have lost money I was owed. Is there any exception to that 3-year rule for refunds? Like if I had a really good reason for not filing?
Unfortunately, the 3-year rule for claiming refunds is pretty strict, with very few exceptions. Even legitimate reasons like illness, being deployed overseas, or natural disasters rarely qualify for extensions beyond what the IRS already grants for those situations when they occur. The best approach now is to focus on filing all returns to get compliant, secure the refunds you can still claim (for the more recent 3 years), and move forward with a clean slate. If your income was low enough in those older years, you might not have actually been required to file, which could be a small consolation. Either way, getting everything filed now prevents much bigger problems down the road.
As someone who works with tax issues (not a CPA, just experienced), I'd also suggest requesting your IRS transcripts FIRST before filing anything. Create an account at irs.gov/transcript and pull your wage and income transcripts for all 5 years. This will show you EXACTLY what the IRS already knows about your income, which helps prevent discrepancies that could trigger problems. Sometimes employers report things incorrectly or there might be income you forgot about. Better to know upfront!
Going back to the original question about Justice Thomas - there's also the issue of whether these were actually "gifts" in the tax sense. The IRS defines a gift as a transfer made out of "detached and disinterested generosity." If there's an expectation of something in return (even implied), it's not technically a gift and could be taxable income. For regular people, the IRS rarely challenges gift classification. But for public officials, especially judges, large transfers labeled as "gifts" from people who might have interests before the court could potentially be scrutinized differently.
That's really interesting about the "detached and disinterested generosity" definition. How would the IRS even determine if there was an expectation of something in return? Seems pretty subjective. Would they look at things like whether the gift-giver had cases before the court?
The IRS would look at the relationship between the parties, the timing of the gifts, and any pattern of behavior that might suggest the transfers weren't purely generous. They consider factors like whether the giver had business before the recipient (in this case, cases before the court) and whether the amounts seem disproportionate to their personal relationship. You're right that it's subjective and often difficult to prove. The burden would be on the IRS to demonstrate that the transfers weren't genuine gifts. For high-profile situations, they might examine communications between parties, the history of their relationship, and whether the recipient took actions that benefited the giver after receiving the gifts. But these cases are complex and rarely straightforward.
I think we're missing something important here - federal judges and Supreme Court justices have specific financial disclosure requirements separate from tax laws. They have to file annual financial disclosure forms listing gifts above certain thresholds. This is completely separate from tax compliance. So even if the gift tax rules were followed correctly (donor filing Form 709, etc.), there could still be ethics issues if the gifts weren't properly disclosed on these judicial financial disclosure forms. That's a separate potential problem from any tax compliance issues.
CosmicCowboy
Something no one's mentioned yet: if you DO decide to file jointly and include your Canadian spouse, remember she'll need an ITIN (Individual Taxpayer Identification Number) since she's not eligible for a Social Security Number. Getting an ITIN can be a pain - you'll need to submit Form W-7 with proper documentation. Also, consider this: does your spouse have any investments in Canada? RRSPs or TFSAs? These can create additional reporting headaches if you file jointly, including potential FBAR and FATCA requirements.
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Miguel Diaz
ā¢Thanks for bringing this up - I actually forgot to mention that my wife does have a TFSA (Tax-Free Savings Account) in Canada with about 20K in it. Would that really complicate things if we filed jointly? She also has a small retirement account through her employer.
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CosmicCowboy
ā¢Yes, that would definitely add complications if you file jointly. With MFJ, you'd need to report those accounts on a Foreign Bank Account Report (FBAR) if the combined value of all foreign accounts exceeds $10,000 at any point during the year. You might also need to file Form 8938 depending on the total value. The bigger issue is that the US doesn't recognize the tax-free status of Canadian TFSAs the same way Canada does. If filing jointly, the earnings in her TFSA could be considered taxable income in the US, which defeats the whole purpose of that account from a Canadian perspective. This is one of those quirks of international taxation that often makes filing separately more advantageous.
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Natasha Orlova
Has anyone had experience with the "year of arrival" elections? My understanding is that in the first year you're married to a nonresident alien, there are special rules that might let you file jointly under certain circumstances, even if your spouse doesn't have a green card or isn't a resident alien yet.
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Zainab Ahmed
ā¢Yes, there's a provision called "first-year choice" or "nonresident spouse treated as resident" election. It allows you to treat a nonresident alien spouse as a US resident for tax purposes, which enables joint filing. However, it comes with a major caveat: your spouse must agree to be taxed on worldwide income, not just US source income. This means ALL of their foreign income becomes subject to US taxation.
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