1099-INT form alert for tax year 2004
Published to our Web site on 4/11/2006; revised 5/10/2006:
1. Did you receive a form letter from the IRS saying that you owed extra income tax on your 1040 for Tax Year 2004?
2. Did the letter say that you owed additional tax because, in 2004, you had earned more income on your savings account with us than you actually did? Then read on.
In early April of 2006 we began to hear from members who had received scary form letters from the IRS. So far, all of the letters have contained identical mistakes. Evidently, the IRS' software has moved the decimal point two places to the right. For instance, if you earned $10 in CFFCU dividends, the 1099-INT form we sent to the IRS read $10.00. But the letter you received from the IRS read $1,000. If you earned $200 in dividends, the IRS letter you received said that you had earned $20,000 (!), and so on.
We know how frightening it can be to receive such letters. (Our individual staffers expect to receive similar letters any day now.) Below are some steps to help you get through this:
3. Please know that:
a. We've informed the IRS: On 4/11/06 we left a message for the IRS about this problem. On 5/10/06, Mrs. Salazar, Agent #8901743 in the IRS' Fresno office, returned our call. She will create a memo, have it "signed off," and, by around May 17th, it should appear under our Federal Employer ID# in the IRS' computers system-wide.
b. Mrs. Salazar said that, even though they've talked with us, you must always reply to an individual letter you receive from the IRS. You may reply in one of two ways*:
(1) Call the IRS on or after 5/17/06 (unless that date is after the deadline the IRS gave you for applying). Here's what to pass along to the IRS:
(a) That you received a notice. Give the IRS the number of the notice.
(b) Give the IRS our Federal Employer ID Number (FEIN). It should be on the notice. It is definitely on the 2004 1099-INT form we sent you.
(c) Write down the Operator's name as well as their 7-digit IRS ID #.
(d) Tell the IRS Operator that there is "bad payer" [an in-house IRS term] information associated with our FEIN.
(e) Tell them that, for all of the 1099-INT forms we reported in 2004, their system moved the decimal points two places to the right. They now need to move the decimal points two places to the left.
(f) With this information, the IRS Operator will be able to check in their system to verify that what you have informed them is true. This should permit the operator to "close" [another IRS term] your case over the phone. If the letter from the IRS contained additional discrepancies unrelated to the 1099-INT error involving our FEIN, then the IRS can send out a new letter to you with the reference to our 2004 1099-INT form deleted.
(2) Write to the IRS. Keep a copy of what you send to them. Send it by Certified Mail, Return Receipt Requested.
(a) Follow the instructions on the IRS forms.
(b) Reply to the IRS forms in time for the IRS to receive your reply by the date they specify (earlier, if possible)
(c) You may want to consult your tax preparer* for further suggestions.
(d) See if you can find in your records the 2004 1099-INT form we sent to you in January of 2005. It's the size of one third of an 8.5" x 11" piece of paper. If you saved the envelope in which we sent it to you, the outside of the envelope reads "'IMPORTANT TAX DOCUMENT ENCLOSED."
(e) If you can find your 2004 1099-INT form, make a copy of it. Include the copy with your reply to the IRS.
(f) If you cannot find your 1099-INT form for tax year 2004, we'll be happy to provide you with one. Because 1099-INT forms contain your social security number and other private information, rest assured that we shall take extra steps to safeguard your privacy. Here's how to obtain a copy of your 2004 1099-INT form from us:
--If you are still a member, you'll receive it by first class mail. You have the option of requesting Express Mail for the actual fee the post office charges us + a flat fee of $7. (The last we heard , Express Mail cost $14.40 + $7 = $21.40.) .
--If you are no longer a member, first class mail will be your only option.
*Note: the staffers of Cal Feminist are not tax preparers. This does not constitute tax or legal advice. You may want to consult with your tax preparer for additional suggestions on how to proceed.