I got another letter from the IRS while I was away. This one is particularly baffling.
To catch you up on the story so far: In I decided to stop paying the self-employment tax (I was already resisting the federal income tax by staying below the tax line). So when I filed my return, I didn’t include a check for the remainder of my self-employment tax. I also didn’t pay any self-employment tax , and won’t be paying any when I file my return . The IRS has sent me a number of letters complaining about this, and recently started seizing money from any bank accounts of mine they’ve been able to locate. In they managed to find more than $4,000 which they sucked into their maw.
But get a load of their latest letter to me. Does this make any sense at all?
Overpaid Tax Applied to Other Taxes You Owe
We applied $3,286.79 of the overpaid tax on your tax return to the unpaid balance of other federal taxes which our records show you owe.
You may still be due a refund if we applied only part of your overpayment to other taxes. You also may be due a refund if you recently made a payment against the other taxes that we had not credited when we applied your overpayment. In either case, you will receive a check for any refund due you as long as the amount is greater than one dollar. You must request a refund of less than one dollar. If you have any questions, please call us at the number listed above.
The figures below show our calculation
How We Applied Your Overpayment
Amount of Overpaid Tax on Your Return $3,286.79 Amount of Interest You Earned on Overpayment $.00 Total Amount Due You $3,286.79 Total Amount Applied $3,286.79 Amount You Will Receive as a Refund
(any interest due you will be added)
Where We Applied Your Overpayment
Form(s) Tax Period(s) Amount(s) Applied 1040 $3286.79
The following information may pertain to you if you are currently married or were previously married… [omitted]
My best guess as to what this means goes something like this: I owed unpaid taxes for tax years . When they seized that $4,000+ in , they took more than I owed for , but less than I owed for combined. They applied what they seized to my debt for — their software apparently isn’t sophisticated enough to split the amount between the two tax years, so the best they could do is to overpay the amount, issue me a refund for that overpaid amount, then immediately seize that refund and apply it to the amount. Then their unsophisticated software issued me an automatic letter awkwardly telling me some misleading version of this story.
(For completeness’s sake, I’ll note that the IRS also sent me a copy of Notice 1212 concerning their automated telephone service and a copy of Publication 1 — “Your Rights as a Taxpayer” — with the letter.)