Lost Money Trading but Now I Owe $2Million in Tax

vanzandt · Jun 26, 2016

Its all a BS nightmare. I was in a similar position about 10 years ago. I wrote em a letter sayin I was goin through a bunch of crap, blah blah blah.... and I would file in my own good time. It worked. I, unlike you, had the paperwork and I filed. The accountant that did it for me said quote "I appreciate your business, but I'll never do this again".

The good news is, I ain't heard from em in awhile. I'm sure that'll change. Fuck em if they can't take a joke. Ya know, if they get the buy and sell info, shouldn't they be able to figure it out for ya? Give ya a number and then let you add deductions. I guess that would tax the vacuum tubes in their Cray's.

bbpp · Jun 26, 2016

Thanks for all .
Will look for a tax attorney and will post back when the case solved.

Turveyd · Jun 26, 2016

Just ignore it, they will file it away and lose it, if you file a large tax year ofcourse they'll want more, so use wifes account / mates and keep your tax returns small.

Chill!

RossLL · Jun 26, 2016

This is a common problem back in the day when brokers reported only sales not cost basis on the 1099B. If you don't file a 1040, the IRS assumes $0 cost basis. The moral of the story is, you always have to file whenever you receive a 1099

$6000 seems like a lot of money to solve a pretty simple problem of you not filing taxes 15 years ago. I wouldn't pay 6000 for that.

vanzandt · Jun 26, 2016

RossLL said:
This is a common problem back in the day when brokers reported only sales not cost basis on the 1099B. If you don't file a 1040, the IRS assumes $0 cost basis. The moral of the story is, you always have to file whenever you receive a 1099

$6000 seems like a lot of money to solve a pretty simple problem of you not filing taxes 15 years ago. I wouldn't pay 6000 for that.

I wouldn't either. I know this sounds crazy, but maybe if you wrote a letter, heartfelt about yourself , your finances, your family, etc.... and you sent it off to your rep in Congress, you might get some action. Believe it or not, these guys really do read their mail even in this day and age of massive electronic communications. In fact, I would suspect that an old school letter to a Congressman, well written that would evoke a pathos on your behalf, might just get the job done. They can make a phone call and your case could be round-filed in a blink of the eye.

I'm a firm believer that if you are in the right and you don't give up.... eventually, you will win. The IRS is feared by many. They have spent decades instilling that fear through their memes. Not me. I enjoy a good fight. I think its fun going down there and chatting. They hate cocky, and you would think that would work against you, and it probably will. But keep fighting. Let them no you are not going to quit. Just keep kicking the can down the road.

Don't let the (self-imposed stress) of this mess up your life day to day. Laugh, love, give back and it'll all work out. We only have the here and now. Enjoy life. Like I said, kick the can down the road and laugh at it all. Don't give them or an attorney one red cent. F-em. :finger:

Good luck. You'll win.

-vz

athlonmank8 · Jun 26, 2016

ScalperJoe said:
"How can I make IRS believe I didn't make money on stocks, and didn't owe them money?"

Prior to 2012, the IRS only received the sales prices and proceeds from the SALES of stocks. .

Exactly. It was a messed up situation back then and I'm surprised this hasn't happened to more people. You have to figure out your cost basis for this to go away OR prove the accounts didn't have funds in it when it was closed (they have the account numbers). The latter isn't a sure bet though.

Turveyd said:
Just ignore it, they will file it away and lose it, if you file a large tax year ofcourse they'll want more, so use wifes account / mates and keep your tax returns small.

Chill!

Bingo

I'm curious, are you originally not from this country? My assumption would be they might think you have offshore accounts in a different region that they're not seeing.

I'm still confused how they can think someone is able to provide records from 15 years back. Just proves the level of stupidity you're dealing with.

Here's a funny story from another thread.

Crazy story, I was using Turbo Tax and sold about 10k in stock but Turbo Tax listed it all as a loss. got a letter from irs to pay 4k in fines and back taxes, gave it to an accountant who submitted a proposal to pay 2k, irs sent counter proposal to refund me 4k and of course I accepted. Accountant said just take the money with the thought that one day you may have to pay it back. Needless to say, I have this accountant do my taxes now...

sprstpd · Jun 26, 2016

athlonmank8 said:
I'm still confused how they can think someone is able to provide records from 15 years back. Just proves the level of stupidity you're dealing with.

I think the real problem in this particular case is that the IRS sent him a bill of 2 million in 2013 and the OP just let the IRS close the case as "not collectible" instead of fighting the initial ruling. Now when he has made some money, the IRS is going after it even though their original calculations were erroneous (but the OP never bothered to correct them). With 2 million on the line, you figure the OP would have dealt with this in 2013.

bbpp · Jun 27, 2016

sprstpd said:
I think the real problem in this particular case is that the IRS sent him a bill of 2 million in 2013 and the OP just let the IRS close the case as "not collectible" instead of fighting the initial ruling. Now when he has made some money, the IRS is going after it even though their original calculations were erroneous (but the OP never bothered to correct them). With 2 million on the line, you figure the OP would have dealt with this in 2013.

Back in 2013, I had no money to fight.

sprstpd · Jun 27, 2016

bbpp said:
Back in 2013, I had no money to fight.

That really isn't the issue. In 2013, you needed to alert the IRS that their calculations were wrong (and prove it). Waiting 3 years makes it seem like you were hoping that this problem would go away on its own. It does not take money to research your own financial history.

As it stands, you have a black cloud hanging over your head - whenever you make money, the IRS will come knocking.

bbpp · Jun 27, 2016

sprstpd said:
That really isn't the issue. In 2013, you needed to alert the IRS that their calculations were wrong (and prove it). Waiting 3 years makes it seem like you were hoping that this problem would go away on its own. It does not take money to research your own financial history.

As it stands, you have a black cloud hanging over your head - whenever you make money, the IRS will come knocking.

As I said before, I called to talked to them, and sent them letters to explain the whole thing,but I could not change their mind.
Besides,as I have said, most of my previous brokers went broke, so I could not retrieve my trading data, and I had no proof to support my claim.
Only thing can support me was I never had that amount of money in my bank accounts,but that is an argument, not a proof, therefore need an attorney. But I could not afford that money to hire an attorney at that time.