Closing In 2 Weeks Tax Bill Popped Up

[jdj7544]

We are supposed to close in 2 weeks.  Obviously we have submitted all of our documentation including tax returns.  Today I received a tax bill from the IRS for 2014 saying that they corrected my return and we owe $12,000.  I have 3 weeks or so to respond or pay the bill.  Is this going to somehow pop up at the last minute?

[Anonymous]

Jd is worried about the IRS and asked-

"Is this going to somehow pop up at the last minute?"

Yeah.

[Anonymous]

I would expect this to be discovered. Is there ANY way you can pay it off before closing?

[jdj7544]

After doing some more research it is not a "bill".  It is a notice of proposed changes that could result in a tax bill.

[Anonymous]

Your lender may end up wanting to see a payment arrangement for that. Best of luck to you.

[compassion101]

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@jdj7544 wrote:

After doing some more research it is not a "bill".  It is a notice of proposed changes that could result in a tax bill.

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 I have experience with these as I've gotten two of these type letters from the IRS. Both were errors by their automated system. I explained where I was correct in my tax calculations and 2-3 months later I got another letter from them saying there will be not additional tax due.

I don't have experience with this as regards to a mortgage, but my guess is that this info will not be accessed on any type of documents or reports other than internal IRS system until they determine that you indeed owe the money. I'd be surprised if your lender finds out about this but that is merely my opinion.

[compassion101]

In follow up, make sure to answer their inquiry within the timeframe stated and send it registered mail.Do you think you actually owe this extra 12k?

[ezdriver]

I have had "corrected" tax returns in the past. IRS got what it wanted each time. Twice the problem was that I failed to include income from 1099 sourced that had not sent me the 1099s. Be prepared to pay it or challenge it. The IRS could have made a mistake ... but that would be rare.

[Anonymous]

I got one of these letters when I was in college a few years back & claimed a tax credit that wasn't compatible with some other tax stuff we had going on or something like that. The IRS was right & we had an additional $2,000 to pay.Their record keeping is excruciatingly exact when it comes to documenting what we owe them, so I imagine something like this would show up on transcripts, even before you accept it & it becomes a bill. I would love to be wrong on this one, for your sake. Best of luck to you.