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You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > Mistake on 2006 Tax Return - I owe the IRS
Expert: WILLIAM D MCCONNAUGHY
Date: 8/29/2008
Subject: Mistake on 2006 Tax Return - I owe the IRS
Question
I graduated college in December 2005. After searching high and low for a job, I decided to sell insurance as 1099. However, for a few months before that, I was a temporary employee in an office. Because the 1099 and student loans and things were all new to me, I decided I should go se an accountant to do my taxes. He did my taxes last year, too. I have since changed jobs, and decided I would file my own taxes from here out, like I did in the past.
Anyway, I got a letter in the mail today from the IRS. It seems as though my accountant entered $1892 as taxes withheld instead of the $182 that was actually shown on my W-2. I now apparently owe the IRS the $1710 difference plus $183 in interest.
My question is this...my reportable taxable income for 2006 was only $7206. Do I owe the IRS all this money? This is more than a quarter of my income for that year. I know people make mistakes, but I really don't like my accountant, anyway, and would like another opinion on this.
Thank you.
Answer
The answer to your question is MAYBE.
I say maybe because you state that you sold insurance as a self-employed person, and received a Form 1099 reporting your income from this source. However, you say nothing about the expenses you incurred generating this income. If these expenses were not deducted on your tax return then the return is showing an amount of tax due that is incorrect, too high.
So I would advise you to have your return amended by an experienced tax professional, such as a CPA or Enrolled Agent, to ensure that you are being given credit for every allowable deduction you are entitled to.
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