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I got a friendly letter from the IRS today. Seems there was a slight snafu/misscommunication on brokerage witholding for a bunch of stock options I exercised in 2005. I owe Uncle Sam something between a restored MGB and a TR6.

I'd gladly take your car issues in trade :smile:
 
Scott,
Maybe Marge Szulborski will help you out since she still has that Lower Macungie money, and she did not beat out Coke for the Iron Pigs stadium naming rights... /bcforum/images/%%GRAEMLIN_URL%%/lol.gif

Okay, if you don't live in the Lehigh Valley, that won't make any sense, but then it really doesn't if you live here.

Sorry to hear about this communication problem. Just make sure the IRS has it correct too. They tried to get my father in law for not paying enough, and by the time we were done they even paid interest on the overdue refund...
 
Scott_Hower said:
I got a friendly letter from the IRS today. Seems there was a slight snafu/misscommunication on brokerage witholding for a bunch of stock options I exercised in 2005. I owe Uncle Sam something between a restored MGB and a TR6.

I'd gladly take your car issues in trade :smile:
Click to expand...

Scott..that EXACT scenario happened to me two years ago for FY2003. I contacted the IRS immediately...they worked with me...and I got it resolved within a month....with no penalty.....But it certainly made my heart skip a beat when I opened that notice the first day.
 
<div class="ubbcode-block"><div class="ubbcode-header">Quote:]I got a friendly letter from the IRS today. Seems there was a slight snafu/misscommunication on brokerage witholding for a bunch of stock options I exercised in 2005. I owe Uncle Sam something between a restored MGB and a TR6.[/QUOTE]

Scott - I was in the same position a few years ago & was banging my head against IRS beaurocrats without getting anywhere.....finally, while talking to one on the phone one day, I muttered, "heck, I might as well just kill myself and get it over with because you people have no idea what you're doing to people like me and it appears you don't really care." Immediately I had a supervisor & counselor on the line & they reopened everything & went through it with me & actually found I didn't owe them anything!
 
Thanks guys; I called Merrill Lynch, the stock option program admin.

They confirmed that they sent me a letter (1099B looking doc) for the transaction indicating the amount of federal tax withheld, but they did not do the actual witholding - even though the trade confirmation suggests they did. Apparently my employer witheld the taxes and reported it on my W2.

When I did my return, I added the ML tax witholding amt to the fed tax paid (over and above my W2) essentially double counting it. Since the IRS did not receive any tax witholding from ML, they claim I owe the tax amt on the transaction, plus interest, plus penalty of course.

This seems stange to me... why would ML do the transaction, but my employer withhold tax - it was not treated as W2/wages. I have no recourse to prove otherwise, as ML did not send any tax to the IRS.

What's worse ... I did the exact same thing for FY06, so I can expact to receive another letter soon.

Grrr...
 
Get ML involved...send them a copy of the IRS communication & tell them to solve it "post haste"! & you might want to hire a good tax lawyer.
 
If they claimed a withholding on the 1099 you recieved they are responsible for making sure it got to the IRS from their accounts. Do what Tony said and advise them (don't threaten) they may be responsible for the "due" tax, interest and penalties. Use to do taxes and the favorite trick of the IRS was to send a refund that was not due and then ask for it back with interest, etc. after 6 months or so. /bcforum/images/%%GRAEMLIN_URL%%/iagree.gif
 
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