I received a non-filer complaint in early November concerning my 2015 taxes. I usually file by mail and did that year as well. Unfortunately, when I checked back through my 2016 statements, it does look like OTR never cashed the check I sent them. After many weeks of back and forth, OTR said they are willing to remove the penalty, a modest amount of about $130. The interest, which compounds daily at an APY of 10% and is much more (more than half of my original tax amount), they refuse to waive. My total bill is less than $1000, so no attorneys or CPAs will work with me.
Since OTR took their time letting me know there was a problem, I no longer have the checkbook where I would have a carbon copy of the check. I’m not even sure it would matter. I’ve spoken to them on the phone probably a dozen times now, I’ve had a councilmember’s office work on it, I’ve even gone in person to OTR to try and work this out. How could I have avoided such extreme interest charges if I wasn’t informed until years later that there was an issue? The only thing I have to show that I made arrangements to pay DC is a transfer to my checking account just before I filed my taxes to cover the cost of federal and DC tax. That is not good enough. OTR representatives told me the only way they will waive interest is if I provide a copy of the canceled check. This is an amazing catch 22, because if I had a canceled check, it would mean they already received payment. This just seems super exploitative — wait as long as humanly possibly to inform someone you never received their taxes, charge them extremely high interest, and give them no recourse to dispute it. I mean, what’s the incentive to even cash people’s checks on time? Throw them out, wait a few years, and send them a collection notice with years of interest tacked on. I hate to deal in conspiracy theories, but this system seems to be set up for abuse.
Why didn’t I check my bank account and when I didn’t see a charge from DC, call them? Well, first, I never know how long it will take DC to get through my tax forms. When I didn’t see a charge the first month, I assumed it would come the next and then forgot about it. My bad, but I am only human.
Has anyone been able to get OTR waive the interest on their taxes under these circumstances? Should I just give up and pay what they’re asking? There is a nagging part of me that worries that in a couple years they will try to do this again (although I asked them to check at OTR and they assured me they have all my other returns, I just don’t believe them).”