Monday, I paid a couple of hundred dollars to the Internal Revenue Service for a penalty on a penalty that in turn by law I should never have been assessed.
I employ myself, one full-time secretary, and one part-time paralegal (part-time because my health insurance company requires that I give every employee with over 20 hours of work per week insurance because they want a big pool for Obamacare). I pay payroll taxes, two different levels of unemployment taxes, business license fees, I could go on, and I always pay on time; but paying these things takes away my stock in trade, my time.
In December, I received a notice from the IRS saying I was off some amount in the taxes I paid for the third quarter of 2013. I looked at my records and said, No I’m not. I called and I was told that yes I was, because although I’d used the electronic payment system to make my payment (I’m required to do this by law) and had made sure it would fund to the IRS by the correct date (the “settle date”), the system had malfunctioned, and the IRS didn’t get my payment on time. I protested that this wasn’t my fault and by law the settle date is supposed to count as the date of payment, and I got some garbage about the amount not being settled by that date.
Whatever. I then asked why I had a thousand dollars in penalties for a payment that was a handful of days late. (Again, it wasn’t late.) I was told it wasn’t because of the days before the error was caught, it was because of those days PLUS the time it took for them to catch it and send me the notice, and penalties and interest run blah blah blah.
My mind and my time are my merchandise. The total time to resolve this mess that legally wasn’t my fault was over an hour.
The last thing I want to do is deal with a headache from the IRS, so I paid that amount by the new deadline date and thought I was done.
Last week, I got a notice of intent to levy for a little over $200. I called the IRS and asked, in more polite words, WTF.
Well you see, even though they gave me a deadline and I met that deadline, and even though I paid on-time, and paid electronically, and it was settled and received on-time, penalties and interest on the penalty and interest from before ran while I was trying to get through to ask about the original amount. And you see, the IRS tries to estimate the penalties you owe correctly, but it can’t always do that, and really, the burden is on me to find out whether the amount they told me to pay was the right amount.
If only I’d called and asked for a ten-day payoff amount, this lady says, they could have given me the correct payoff amount, which is yes, more than was listed, but really, what ARE you going to do? I should have known to call and ask for a payoff amount other than the amount they told me to pay.
Total time to resolve this new mess: Forty minutes. That’s hundreds of dollars in time I could be using to pay my employees or make a profit or both that I instead had to spend to deal with a problem that legally I should never have had, in addition to the thousand-plus dollars in tax liability I had because the IRS is never at fault.
I got to enjoy all of that for the privilege of employing someone.
Don’t dare tell me there are no barriers to hiring for small businesses. I’m living in one now.
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