Lost Money Trading but Now I Owe $2Million in Tax
- Thread starter bbpp
- Start date
Amazing how someone, full of shit, shows up with a story and most fall for it.
I didn't make more than minimum to let me live. As most of time my bank account only had a few hundred. I am not a native(from my English you can see)so I thought if I didn't make income, I don't need to file a return.
As I said above, I asked an attorney with specialty in tax, who offered to solve my case for $6000.
I want to know if this price is too high, and if there is any other solution. That's why I came here to ask help.
In my first year of trading (it was more like only 4 months though)...I racked up $415K in total volume from my trading...from my tiny account.
I was So shocked it was that high, and like you...I also received a notice from the IRS about not filing.
I thought I didn't have to file because I had losses/no income
Issue fixed after I filed though, to report the losses. -- prices paid, and the lower prices sold for.
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What is my motive to come here to make a false story? Did I gain something or did I hurt anyone by make a false story?
Following is a letter from IRS.
Could I fabricate such a letter?
Case Closed-- Currently Not Collectible
We have temporarily closed your collection case for the tax types and periods listed below. We have determined that you do not have the ability to pay the money you owe at this time.
Although We have temporarily closed your case, you still owe the money to IRS. We may re-open your case in the future if your financial situation improves.Also, since you still owe money, we will continue to add penalties and interest to your account and it will be subject to other adjustments and offsets such as applying future tax refunds to the amount you owe.
You don't need to take any action at this time. However, it is very important that you file all future tax returns and pay any amounts you owe on time.Also,it is to your advantage to make voluntary payments towards the amount you owe,if possible, to minimize additional penalties and interest.
If you have any question, please call us at 1-800-8291040(individuals)or 1-800-8294933(businesses). For non-case-related questions, you can also check on our website at www.irs.gov
"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. Then the law changed, so the IRS now receives BOTH the sales price AND the purchase price.
If you had brokerage accounts and day traded for 3 years with LOTS of sales transactions 15 years ago, then the cost basis was NOT reported, only the SALES transactions. So, the IRS received the 1099 from your various brokers who reported the total sales, and thus the IRS will assume your cost basis was ZERO if you did not file the return and list your PURCHASES for those sales. This is most likely why they think you owe $2 million in taxes.
You will have to go back to the brokerage firm, or somehow find a way to obtain your old statements, and calculate the cost basis (i.e., the PURCHASE price) for all stocks you bought. However, if you did not send the IRS a notice that you were electing "Mark To Market" for the brokerage firms you were day trading in, then the IRS will disallow any "wash sales" from your cost basis.
As others have posted, you'll most likely need the help of a competent tax attorney who specializes in stock trades.
IRS and my lovely state have been on the war path lately... you`re going be hearing a lot more of these stories as they are reaching for every swinging nickel that they are NOT entitled to... I won`t include my personal story but they are in the extortion business.
I wasn`t too surprised to find out that majority of our IRS departments are outsourced to India... par for the course as they obfuscate any & all correspondence.. Just wait until they start their "negotiations" with you for monies you don`t owe... That`s coming up next.
keep us posted.
I wasn`t too surprised to find out that majority of our IRS departments are outsourced to India... par for the course as they obfuscate any & all correspondence.. Just wait until they start their "negotiations" with you for monies you don`t owe... That`s coming up next.
keep us posted.
I spend a lot of money on attorneys in business. $6k seems like a great deal. My guess is it's just a retainer and could go less or more likely more. Either way, you want someone that is reputable and aggressive.
$6k to solve a $2m IRS problem is well worth it.