Last week’s Color of Money Question
Last week, I asked folks to share their tax horror stories. I guess people were too scared to share.
But staff members at HLNtv.com pulled together some tax nightmares. Here’s one story from Betsy R., 60, Maryland.
Betsy’s story told to HLN: “More than 20 years ago, I lost 10 years of investments, savings, and tax shelters after my financial planner turned out to be a crook. About 20 of us lost everything and got slammed with tax bills in the hundreds of thousands of dollars (tax plus interest plus penalties). I was in two class action suits against the IRS on this. We did get the penalties dropped by showing we were defrauded, but we still had to pay the taxes and interest. The guy hadn’t actually made the investments with our money, but had sent us forged deeds, etc. Note: the investors in this case were science researchers, doctors, dentists and other professionals – smart people who were too trusting.”
And what did Betsy learn?
“Verify everything and diversify. We thought we were diversified since the investments were different types, but they were all through the same guy.”
There are several other stories -- and what lessons were learned -- that you should check out.
Extension Offered to Residents in Suffolk County,Mass.
By the way, the IRS has announced a three-month tax filing and payment extension to Boston area taxpayers and others affected by Monday’s explosions. The agency said the extension applies to all individual taxpayers who live in Suffolk County, Mass., including the city of Boston. It also includes victims, their families, first responders, others affected by this tragedy who live outside Suffolk County and taxpayers whose tax preparers were adversely affected.
No filing and payment penalties will be due as long as returns are filed and payments are made by July 15. However, the IRS says that, by law, interest -- currently at the annual rate of 3 percent compounded daily -- will still apply to any taxes that were not paid by April 15.
The IRS said an automatic extension would be given to Suffolk County residents. But those who live outside Suffolk County must call (866) 562-5227 starting Tuesday, April 23.
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Tia Lewis contributed to this report.