Internal Revenue Screwup
My husband and I got to spend almost 2 hours on the phone with the IRS yesterday.
But let me start at the beginning.
Back in April, you may recall, taxes for 2010 were due. Our taxes were complicated by the fact that we're legally married and in a community property state, but the Federal government doesn't recognize our marriage or our domestic partnership (which we got before California acknowledged our right to marry). In 2007, 2008, and 2009 this was relatively harmless because we each had similar income, so we just each filed a separate return for our individual income, even though that's technically not correct under California law, since actually we each got half of the other's income.
However, in 2010, my husband was the only one gainfully employed. My business had a bad year, so I suffered an overall negative income. Remember, community property state. Legally, half of my husband's income is mine, and half of my business loss is his. After an extensive phone conversation with the IRS back in April, we determined that what we needed to do was fill out an "asset allocation table" found in publication 555 from the IRS. (Note that's a table in a publication, not an actual form or schedule.) We then each needed to fill out an individual return, incorrectly labeling ourselves as "single" for the fourth year in a row, using the income and deductions from the asset allocation table. However, these numbers do not appear anywhere on our W-2s, 1099s, 1098s, etc. To avoid any confusion about how we came up with the numbers, we simply did what we've done in California for years and included a pro-forma 1040 as if we were married and filing jointly. We wrote "PRO FORMA" in big letters on the top of the pro-forma 1040 and did not sign it. We also included two letters (one from each of us) explaining the situation and outlining very carefully what we had done.
Well, two weeks later, we got our pro-forma 1040 back in the mail with a note that it requires a signature. We signed it, included a letter explaining that we had not signed it because it was a pro-forma form and we did not think a pro-forma form explaining our asset allocation required a signature, and returned it.
We got our refund towards the end of May and thought we were done with our 2010 taxes. Boy were we wrong.
Early this month, my husband got a letter stating that the IRS has recalculated his deductions and he was owed a refund. The form said that if they didn't hear from him within a certain period of time, the refund as they had calculated it would be deposited into his bank account. Needless to say, we were a little confused. And calling the phone number they provided gave us a lot of options for how to make payments and how to dispute the amount we owe the IRS, but, surprisingly, no option for how to report that the we don't think we deserve the money the IRS wants to send us.
Meanwhile, my husband got a letter from a separate IRS office confused as to why he had submitted two returns.
So, in yesterday's phone conversation we were able to determine that the IRS had, in fact, gone ahead -- despite the Defense of Marriage Act still being on the books (which it is despite having already been ruled unConstitutional) -- and processed our married filing jointly pro-forma 1040 as our tax return. However, they apparently didn't cancel the two single returns, which are now ghosting their way through the system.
Well, we've now got notes on my husband's file as to what happened, and I went off to the post office to send off two copies of a letter (to each address we had received notifications from) again explaining the situation.
Not resolved yet, but at least we know what's going on.
And, of course, I'm now waiting for the other shoe to drop, because it seems likely that the IRS is going to send the same letters to me.
Remind me again why I chose to be gay?
But let me start at the beginning.
Back in April, you may recall, taxes for 2010 were due. Our taxes were complicated by the fact that we're legally married and in a community property state, but the Federal government doesn't recognize our marriage or our domestic partnership (which we got before California acknowledged our right to marry). In 2007, 2008, and 2009 this was relatively harmless because we each had similar income, so we just each filed a separate return for our individual income, even though that's technically not correct under California law, since actually we each got half of the other's income.
However, in 2010, my husband was the only one gainfully employed. My business had a bad year, so I suffered an overall negative income. Remember, community property state. Legally, half of my husband's income is mine, and half of my business loss is his. After an extensive phone conversation with the IRS back in April, we determined that what we needed to do was fill out an "asset allocation table" found in publication 555 from the IRS. (Note that's a table in a publication, not an actual form or schedule.) We then each needed to fill out an individual return, incorrectly labeling ourselves as "single" for the fourth year in a row, using the income and deductions from the asset allocation table. However, these numbers do not appear anywhere on our W-2s, 1099s, 1098s, etc. To avoid any confusion about how we came up with the numbers, we simply did what we've done in California for years and included a pro-forma 1040 as if we were married and filing jointly. We wrote "PRO FORMA" in big letters on the top of the pro-forma 1040 and did not sign it. We also included two letters (one from each of us) explaining the situation and outlining very carefully what we had done.
Well, two weeks later, we got our pro-forma 1040 back in the mail with a note that it requires a signature. We signed it, included a letter explaining that we had not signed it because it was a pro-forma form and we did not think a pro-forma form explaining our asset allocation required a signature, and returned it.
We got our refund towards the end of May and thought we were done with our 2010 taxes. Boy were we wrong.
Early this month, my husband got a letter stating that the IRS has recalculated his deductions and he was owed a refund. The form said that if they didn't hear from him within a certain period of time, the refund as they had calculated it would be deposited into his bank account. Needless to say, we were a little confused. And calling the phone number they provided gave us a lot of options for how to make payments and how to dispute the amount we owe the IRS, but, surprisingly, no option for how to report that the we don't think we deserve the money the IRS wants to send us.
Meanwhile, my husband got a letter from a separate IRS office confused as to why he had submitted two returns.
So, in yesterday's phone conversation we were able to determine that the IRS had, in fact, gone ahead -- despite the Defense of Marriage Act still being on the books (which it is despite having already been ruled unConstitutional) -- and processed our married filing jointly pro-forma 1040 as our tax return. However, they apparently didn't cancel the two single returns, which are now ghosting their way through the system.
Well, we've now got notes on my husband's file as to what happened, and I went off to the post office to send off two copies of a letter (to each address we had received notifications from) again explaining the situation.
Not resolved yet, but at least we know what's going on.
And, of course, I'm now waiting for the other shoe to drop, because it seems likely that the IRS is going to send the same letters to me.
Remind me again why I chose to be gay?