Late filed tax - huge tax due?

You have two years from paying an amount to request a refund of it. If it has been more than that, you have an extremely thin chance of getting a refund. Your only hope would be to contact the Taxpayer Advocate and claim you were misinformed by the IRS people.

My guess is that the probability of this working is about 0.001% (1 in 1,000). You may have just learned a valuable lesson. Don't handle something on your own unless you know what you are doing.

The letter the IRS sends in cases like yours states that the additional taxes are based on the full sales price. The IRS doesn't say this, but what it assumes is that the amount is a short-term capital gain, which is taxed at a higher rate than long-term capital gains. The next time you think about doing your own tax return, remember this incident.

A tax professional would have saved you. (That's why clients pay big bucks to my employers. I have saved clients hundreds of thousands in taxes and penalties.) I hope this helps.

Gary.

The Statute of Limitations is 3 Years from the due date of the return: Or 2 Years from the date of the last payment or you can open that statute by filing the return today. However, if the IRS has not inquired after all these years, leave it alone unless you are applying for a job as a police officer and need it for the psychological exam.

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