“Anyone Else Get a ‘Notice of Correction’ for DC Income Taxes”?

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Photo by PoPville flickr user hellomarkers!

“Dear PoPville,

So we got a “Notice of Correction” on our DC Income Taxes that eliminated all of our legitimate exemptions (me, spouse, and kids); as a result, DC OTR is now saying we owe almost double than we were supposed to get back.

We called our accountant who said that DC OTR had an error — which apparently hit quite a few people — and OTR +++should+++ be issuing correction (to their initial (erroneous) “correction”) notices soon, but still it is troubling to have a tax bill hanging out there even if it is wrong.

Anyone else get an erroneous notice like this? It seems wild that they could sent a letter like that without any real explanation (you have to do the numbers yourself to see where the “correction” is), and only give you a phone number and an address, but no real instructions on how to correct.

Any other ideas on how to address? Calls to the number listed on the OTR site were not helpful.”

38 Comment

  • HaileUnlikely

    No special wisdom here, but this is definitely not the first time that OTR made some sort of error that resulted in some taxpayers receiving wildly inappropriate tax bills. They had some sort of “software glitch” in 2010 that resulted in an estimated 3000 taxpayers being credited for only one-tenth of taxes that they paid in 2009, and thus receiving large bills, complete with penalties and interest, the following year instead of the refunds that they were owed. I wonder how that ever got resolved (more on that here: http://www.washingtonpost.com/wp-dyn/content/article/2010/06/11/AR2010061105910.html)

  • Yes, we received a frightening correction notice last month. Something went haywire with their system and (in our case) flipped our filing status from married filing separately on the same return to married filing jointy. Took several attempts to call to get through to talk to someone, but after half an hour on hold, they managed to make the correction and issue the corrected refund.

  • The routine ineptitude of DC government agencies is really, really tiresome.

  • Yes, we have a similar but different issue. Using H&R Block’s software, we were expecting a refund of multiple hundreds of dollars. We received a correction notice this week from DC. They increased our taxable income by 53 dollars which resulted in a 1500 dollar difference in the amount of taxes owed compared to H&R Block’s calculation (not in favor of us, obviously). Needless to say, we are investigating but are worried about getting stonewalled. If we actually owe the money, we have no problem paying (despite the pain), but we are not optimistic that DC has calculated correctly. Any advice is welcome.

    • HaileUnlikely

      Did you say that they changed your taxable income by $53 and it changed your taxes owned by $1500?

      • Maybe that phased out some credit/deduction?

        • That’s what we thought at first, but they gave us a line-by-line, and everything else matched. The only two things we can think of is (1) a glitch in the DC system or (2) H&R Block had the wrong tax rate for DC. In either case, we don’t really want to pay.

          • Yeah, as stated in a comment above, above this really sounds like a married filing jointly and a married filing separately on the same return issue. The difference amount is around the amount that is usually saved by filing separately on the same return.

      • Yep. Unreal, right?

    • If you’re filing married, mare sure the corrected calculations are doing the married filing separately on the same return correctly. The general advice: Do the taxes manually and reconcile the differences between OTR and H&R Block.

    • We had a similar issue. In reality, your refund is only reduced by 53 dollars. The “correction” assumes you’ve received your refund already, in which case you’d be expected to pay back the difference. The problem is these refunds haven’t been issued, so there isn’t a balance to be paid back.

    • You could hire a CPA to look into it for you – I had to do this this year for an unrelated issue. Expensive but worth the peace of mind, for me at least.

    • I had the exactly same situation. I haven’t had a chance to talk to them yet, but as other here have mentioned, when I ran the numbers as if I filled jointly with my wife then they are exactly right. But, in fact I filled separately on the same return – making my original numbers correct. They also increased my taxable income by 107 dollars. No idea where that came from

      • I just got off the phone and the problem is solved. After being on hold for 25 minutes I explained to they guy that is seemed like they calculated my tax bill as if I filed jointly when in fact I did not. It was unclear if he knew what I was talking about, but he said he would look into and put me on hold another 10-15 minutes. There was a brief update in the middle that they agreed with me and then he came back and said it was fixed. I didn’t bother to find out what the 107 was about as it only amounted to 5 dollars in extra tax. Just shy of 45 minutes on the phone but only a minute of actual talking to someone so I got some stuff done in the mean time.

    • Props and thanks to OP for bringing the issue up and to Popville commenters for sharing their knowledge and experiences.

    • All, I was able to get through to OTR at 5:15 on a Friday. Already a miracle. Moreover, a supervisor and I walked through the calculation J worksheet, and we had a difference in one line of $1.00 (assuming different rounding rules were applied between OTR and H&R Block). Because those didn’t match exactly, the system defaulted to married filing jointly, which substantially increased our taxes. It is resolved, and I hope this explanation helps others. Thanks again to everyone who pointed out the married filing jointly/married filing separately issue to begin with. Happy Friday!

  • This is likely related to the OTR issue we had here a couple of weeks ago. Seems like OTR is having all sorts of issues with items related to their (wholly unnecessary) Schedule S.

  • Has any one actually managed to get through on the phone to OTR? We got one of these and I’ve tried to call a few times, but every time I just get a “All of our lines are busy, please try your call again later” message. No option to hold or anything.

    • Took me 58 tries…

    • It took me calling like I was trying to win concert tickets on the radio (dial, hang up, redial, hang up, redial, hang up, etc.) to finally get through. Then I sat on hold for at least 40 minutes. It was pretty awesome.

    • I have on several occasions, but I typically call when they first open. Walking in may ultimately work out better for if you can do it, but again, when they first open is the first time. I’ve gotten my problem resolved in 10-15 mins this way.

      • HaileUnlikely

        Thanks for the tip. Massively discouraging that you’ve had to go there to get problems fixed on several occasions, though.

    • I tried to call repeatedly about my property tax bill for 3 weeks and had the same issue. I even emailed my Councilmember and told him about this. Eventually someone called me back I think because I filled out a “Contact Us” form on the website. It is completely inexcusable in my opinion that you can’t even get through to them on the phone.

  • The below is published opinion from D.C. Court of Appeals calling out D.C.’s Tax office. It’s awesome.
    .
    “In the 1984 film, The Terminator, a work of fiction starring Arnold Schwarzenegger, artificially intelligent machines attempted to exterminate what was then left of the human race. In the appeal now before us, a man made computer system did not go so far but, defying the will of those who programmed it, it caused significant grief and distress to those who had a right to rely on its accuracy. Unfortunately, the machine involved belonged to the branch of the District of Columbia government responsible for calculating and collecting citizens’ taxes. In this case, we are charged with resolving a controversy that had its inception in an erroneous data entry made almost a decade ago into the computer system of the District of Columbia‘s Office of Tax & Revenue (OTR)…”

  • Yes, correction sent out for us bc married status error not correctly computed by DC. I’m glad we have a tax pro doing it for us. Huge headache with DC OTR software.

  • They cut my refund by $1 with a correction. FWIW, I did the DC tax form in long hand. The online version was full of counter-intuitive skips and was taking forever; I don’t know how much of that was DC and how much was Intuit, the vendor. Regardless, doing it in longhand helped me better understand the steps. and it seems to have cost me less than what other people are reporting.

  • My husband and I had this exact issue. Our letter of correction changed our deductions by $36 which caused us to go from a $870 refund to us owing $400. I called and they acknowledged that it was an error on the part of the DC tax office and I am once again expecting a refund of now $869… lord knows why it changed by $1 but that’s way better than paying $400! The error was never actually explained to me, but we also filed as married filing separately so it must have to do with that.

  • I haven’t filed yet, but this has been discussed on my neighborhood list. My accountant did tell me, though, that long-term care insurance would no longer be deductible, so I wouldn’t be surprised if other deductions have changed as well.

  • As other commenters have said, my wife and I also received one of these notices, also due to DC misinterpreting our return (filed via Turbo Tax) from ‘Married filing separately on same return” to “Married filing jointly” (and thus increasing our tax burden by over $1,000). It took several different occasions of calling to get through (terrible phone system!), but when I finally got through, the rep was able to correct while I was on hold, about 10-15 minutes or so.

  • This is typical of the DC Office of Revenue. No explanation is provided and I have found it very difficult to get an explanation. In my experience the IRS always includes an explanation with a tax notice. You might try your city council person

  • Similar issue — DC apparently mailed correction notices to all/many married couples who file separately on the same return. Ours changed things from DC owing us $1400, to us owing DC $1000. When I FINALLY spoke to someone at OTR they informed me there is a systems problem that caused the erroneous notices and promised to put a note about it on their website (some help that will be). It doesn’t sound like they are going to send me a new notice confirming that I don’t owe DC any morey, which I find strange. DC is impossible to deal with!

    • I had very similar issues to the others above who got notices of correction and filed as married filing separately. OTR originally couldn’t help at all, and possibly introduced new, irrelevant changes when I first got through to someone in March, then on a second call in April they acknowledged the married filing separately error, but ONLY after I asked specifically if that could be the error. Then the OTR person said oh yes, don’t do anything, these are under review.

      I wrote to our ward’s constituent services, and got this response today, in part: “an error at the Office of Tax and Revenue was identified in this year’s income tax filing season. Specifically, there was an error in the filing instructions OTR provided for taxpayers who filed married, filing separately on the same form, earning between $150,000 and $275,000 which resulted in their refunds being incorrectly reduced. This error affected 185 taxpayers, who filed their returns prior to March 25, 2016. The error has been corrected and additional refund checks will be mailed within the next two weeks.”

      We’ll see.

  • I panicked after receiving a Notice of Income Tax due especially so close to the deadline on a Friday. I made sure to file my taxes in mid-February.

    From my e-file tax filing and TurboTax’s estimate of my state tax return, I was supposed to receive $475 in return, but now I owe $3687. I haven’t found out what the issue is yet.

    I am single, so had no filing separately or jointly issues. I will probably spend a good chunk of this coming Monday to sort through the issue….

    Thank you for starting this thread though. I was getting anxious that I was going to have to pay the whopping $3687 for now to avoid the late penalty.

    • Read the DC OTR note carefully; IRS and the states are seeing fraudulent tax filings, e.g if I claim to be Joe Schmoe + I file his 2015 tax returns before Joe does, I can divert the refund to me.
      Is it possible Joe received a Visa card with your $475?

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