Swift Justice: Contractor contracts and IRS penalties

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Dear Jackie,

Two-and-a-half years ago, we contracted to have the exterior of our house painted, along with some carpentry work. Long story short, we put down half ($4,000), with the balance due upon completion. Well, they did a lousy job, even lying to us about having put on two coats when it was physically impossible to do so properly in half a day. We complained long and loud to the owner and never received a bill for the balance. Now, all this time later, we get a bill for more than the other half, and they're saying they neglected to send the invoice and that some of the increase is the carpentry work. My question is simple: Should I pay him the money due, and, if I do, can I reduce the amount for the lousy work? We plan to move out-of-state in less than a year. Thanks. -- Steve from Burlington, Conn.

Hi, Steve,

Connecticut has rules regarding home improvement contractors. They must be registered with the state and they must present you with a written contract containing all of the work that they will do and it must be signed and dated by you and the contractor. Any changes must be in writing and signed and dated by both of you, too. So, for you to receive an invoice that is higher than the original price, well, that seems to violate the rules. Here is a link to a document that should give you all of the information you need: http://1.usa.gov/162cIEi. Appendix A details what a contract for home repair must contain in order to be valid. I do not know what the contractor put in writing regarding your job, but it sure sounds like the extra charges weren't a part of the original agreement. Take a look at this info, and compare the requirements to your situation. You may not have to pay the extra money. Also, if your contractor was not registered with the state, by law he will be prevented from using the judicial system to collect payment for his work. Review this info, and then use it to negotiate with the contractor. The thing you want to avoid is having a lien put on your property if you don't pay.

Dear Jackie,

Apparently, IRS Notice 433, "Interest and Penalty Information," is a document that outlines the interest rate applied to overpaid or underpaid taxes. Federal law requires the IRS to determine the interest rate on a quarterly basis, and interest is compounded daily (except on late or underpaid estimated taxes). My question is: If the IRS charged me interest and penalties without doing the above, what are my options for getting an abatement for the exorbitant interest and penalties I paid? They took action through liens and levies without documenting how the interest and penalties were calculated. One IRS location processed the documents I sent and another location did the penalty and interest charges. Supposedly there is a bill of rights for taxpayers. Thank you. -- James from Allentown, Pa.

Hi, James,

Most people don't have anything nice to say about the IRS, and with what has been in the news lately, there is even more anti-IRS sentiment. Despite that, a few months ago I had a reader contact me and give me information about an IRS program called the Taxpayer Advocate Service. Here is the link: http://www.irs.gov/uac/Taxpayer-Advocate-Service-6, and the phone number is 1-800-829-4059. I suggest you contact them to explain what happened and ask them to help you. I suspect that their customer service will be better than ever these days.

(Jackie Glass is a lawyer and former district court judge from Las Vegas, Nev. Submit your legal questions to Jackie by emailing askjudgejackie@gmail.com. You can follow her on Twitter at @theJudgeGlass. This column is being provided for informational purposes only. It may not be relied upon by you as legal advice and does not create an attorney-client relationship.)

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