Dear Western Friend: In the time since I wrote the article about my frivolous filing penalty with the IRS, there have been some new developments. I would like to share the end of the story. I thought it had ended in August of 2012 when I agreed to pay a $500 penalty instead of the $5000 penalty. I was blue about this, but did feel that it was the best decision considering the situation. It turned out that the $500 had already been taken along with an extra $200 from our daughter's college fund. So the IRS owed me $200. I kept looking in the mailbox for it, and my partner Tim kept laughing.
I finally quit looking for that check, and then in December of 2012 I received a call from one of the people I had spoken with at the IRS, suggesting that I file a “form 843,” asking for a refund and abatement of the penalty, which I did. In January a call came from the tax advocate who was assigned to my case by our local legal services agency. She told me it was unlikely that I would get the refund, and it could take a couple of years to find out.
She next checked in with me in April and her tone had changed. She told me that my request for a refund had gone to the Chief Counsel’s office in DC, and that she was optimistic of my getting the refund. In May we come home to find there is a message on our answering machine that says; “the IRS has agreed to drop the penalty, a check will be in the mail this Friday.”
I received two checks: one for the $200 and one two weeks ago for the $500, both had added interest.
Then from the National War Tax Resisters Coordinating Committee, I heard that based on my case a memo was written by Chief Counsel of the IRS stating that if a taxpayer fills out a form correctly and adds in a letter of conscience, the frivolous filing penalty does not apply.
When I began to appeal the penalty I was reading about “joyfully loosing an argument.” Now I find I need to work on “humbly winning one.”
Sincerely, Vickie Aldrich