+1 862 207 3288 Your task is to email Hilda Black explaining why you are unwilling to pay the penalties and
interest charges requested by the IRS.
A Taxing Matter
It’s June now, but during the mid-April rush at tax time, Hilda Black phoned to ask whether
she could roll over funds from one special tax-deferred retirement account into another
without paying taxes on any gain. You answered then that such a rollover was not considered
a tax event as long as the transaction was completed in sixty days. You also informed her that
when she eventually draws out the funds to supplement her retirement income, she will then
have to pay taxes on the portion that represents interest earned on the account.
Today you received a rather emotional and disorganized email from Ms. Black with scanned
attachments of account statements and a letter from the IRS. Her letter explains that the IRS
is billing her for $3,309.72 in penalties and back interest because she failed to declare interest
income earned when she cashed in “those bonds that I told you about last April.” But she
didn’t ask you about cashing in bonds; she asked you about rolling over funds from one taxdeferred
account into another.
You checked the archives for the recorded April conversation you had with Ms. Black and it
confirmed that your recollection of the call was correct. When you checked the statements
she attached, you learned that she cashed in a large standard, i.e., non tax-deferred, bond
mutual fund account, but never declared taxes on the gains. It could be that she thought of
this bond account as funds she was putting aside for her retirement and thought they were in
a tax-deferred account even though they were not. In her mind those bonds she thought she
told you about last April were tax-deferred. But it doesn’t matter what she thought; the
income earned on those bonds is taxable just as any other investment income is.
Ms. Black is an older woman, and you have prepared her taxes for the five years since her
husband died, but this year she decided to prepare her taxes herself. When she called, you
were happy to answer her question, but you never saw any of her documents, and she paid
you no fee. She asked an abstract question and you answered it. Ms. Black is a very nice lady,
but she is very anxious about her finances, and sometimes gets confused and overwrought
when something goes wrong.
Ms. Black demands that you pay the penalties or she will sue. Her position is that you misled
her, so you should pay the penalties and interest charges, which of course, are getting larger
every day. She is willing to pay the actual tax on the transaction.
Your task is to email Hilda Black explaining why you are unwilling to pay the penalties and
interest charges requested by the IRS.
Hilda
Black
Grading
Rubric
Cheeseburger
strategy:
are
all
the
parts
there?
Is
development
effective
and
clear?
• Does
buffer
theme
make
sense?
• Do
the
reasons
get
Hilda
to
see
it
from
writer’s
POV?
• Is
bad
news
clear,
but
gracious
in
tone?
• Is
there
a
gesture
in
the
close
that
moves
relationship
forward?
Are
sentences
effective?
• Are
they
too
stiff
and
formal?
• Are
they
too
weak
and
passive?
• Are
they
too
long,
wordy,
and
convoluted?
Are
usage
and
mechanics
ok?
• Typos,
misspellings,
agreement
issues,
danglers,
punctuation
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