Looking for any helpful opinions here. I started redeeming lawful money in May 2011. I am a contractor and had a 1099 to resolve at tax time in April 2012. I filled out the paperwork
1040 per John Henry Doe, and didn't owe any tax. July 2012, I got a notice for an amended return and a pamphlet on why we have to pay taxes. Against my better judgement, I sent them another return and actually some tax ($2300.00), with the idea that I perhaps owed tax on the income up until redeeming lawful money. September 2012 I got a notice saying thank you, your taxes are paid in full, but we are hitting you with a $5000.00 penalty. (I should note the request for amended return gave a due by date or there would be a 5K penalty. I had sent the amended return First Class Mail in the time required.) So I sent a form 843 Request For Abatement with the reasons being I had complied in time frame and the whole lawful money bit. Got a letter back in October saying it needed to be researched and we'd get back to you in 45 days. Didn't hear anything else until February 4, 2013 when mailman caught me on a Saturday with a certified notice Intent To Levy State Tax Refund. I thought that was odd, since I haven't had any state tax refunds for years. Anyway, that Monday I R4C the notice and went to create a Miscellaneous jacket. Found out I had to do that in main branch next county over, so I was really pushed for time as I had only taken a couple hours off from work. The gals at court house were clueless, and told me that I could only do a miscellaneous filing if there was an existing court case, which there is not. So I ended up returning the R4C and a notarized Notice And Demand document for my bank account I created in September 2012. I returned them and wrote on the documents date and certified mail #. Today, I get home and there is a card from mailman saying I need to pick up a certified letter at post office. (The only people who would be sending me certified letters at this time is IRS.) Do you folks think I should go ahead and get a LoR prepared before receiving the letter? Should I even waste anymore time on this?(I was forced into bankruptcy several years ago and lost house, business, life savings, etc. Only thing in my name is a 1999 car and I have other transportation. Only ever put more than $1000.00 in my one bank account when I write rent check.) Just putting it out there to see if I should even waste anymore time on this. And yes, I will be doing my April 1040 with 100% lawful money noted, so I don't plan on paying any taxes again.