The IRS Audit Blog

Archive for July, 2007

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Question: when u log on the the irs website and sign on the wheres my refund it said a ref number 8002 what does that?

mean am i being aduited earlyer it says there was and delay in processing your return ref 1121 and when i called they irs they said i will be receving a letter but i havent got it yet i have been waiting on the letter i have an dependant on my taxes could that be why please give me honest and truefully answers if u dont know do not answer i think this is crazy the way the irs is holding people tax refunds

Answer: 8001 Paper return taxpayer filed more than 6 weeks ago, failed authentication Conduct account analysis.

1121 means they figured out the problem, but froze the refund until they contact you.

IRS offers its top 10 tax time tips

While the tax filing deadline is more than three months away, it always seems to be here before you know it. Here are the Internal Revenue Service’s top 10 tips that will help your tax filing process run smoother than ever this year.

Tax Refund Identity Theft IRS www.IDTheftSecurity.com

Tax-form slip-up a scare, but not an identity hazard, Colorado says

Nearly 2,000 Coloradans who were mailed tax forms bearing other people’s names should soon receive corrected copies in the mail, say state labor department officials who caught the glitch thanks to calls from concerned recipients.

Kevin Costner at Colorado College

Question: Can anyone tell me the correct Title and Section of the US Code?

Here is an excerpt from an article from Apple.com on the statute of limitations for the IRS’ collection of back taxes:

The IRS has 10 years to collect outstanding tax liabilities. This is measured from the day a tax liability has been finalized. A tax liability can be finalized in a number of ways. It could be a balance due on a tax return, an assessment from an audit, or a proposed assessment that has become final. From that day, the IRS has ten years to collect the full amount, plus any penalties and interest. If the IRS doesn’t collect the full amount in the 10-year period, then the remaining balance on the account disappears forever. The statute of limitations on collecting the tax has expired.

What is the statute number?

Answer: 26 USC 6501(a) gives three years from the date a return was filed for the IRS to collect a balance due. However, once the IRS actually makes an assessment of taxes (generally about 6 to 8 months after the return is filed), 26 USC 6502(a) gives ten years from the date of the assessment for the IRS to collect the taxes.

For more specific information on your tax problem, contact a tax attorney in your state. For a referral, contact your local or state bar association.

Meet The New, Scarier Breed Of Debt Collector

The last decade or so has given rise to a new version of an old phenomenon: the bottom feeding debt buyer.

Tampa tax attorney explains IRS does not have forever to collect

Question: my husband turned 70 1/2 this year, he has an IRA cd he has been taking the interest from and it covers the?

RMD for IRS rules ( this year he gets a government break ) for 2010 and the future BUT the cd matures next year, how does he handle the princable in the IRA, can it be taken all out and placed wherever he wants etc ?? does it have to stay in the same bank it is in now etc ?? does the government still have “control” over what he does with it now that he is ” of age” THANKS in advance.

Answer: First, look at the amount of money he’s got. If he took it all at once, what would the tax bill look like? If he took it over the next 5 years, what would the tax bill look like? (Remember, this is income that can make his SSA benefits taxable.) What if he took out over the RMD estimated life expectancy?

If he can take the money slowly and not pay any tax, I’d go for that. If he will always be paying tax and is in the 10% tax bracket, I’d probably consider taking as much as it takes to max out the 10% bracket each year (and then not spend it all).

As for the account, the IRA is the account holder. The IRA can be held as cash, in a CD, in stocks, in bonds, etc.

You are correct that a CD may or may not be the best choice at this point. Depending on the amount of money involved, you can buy multiple CDs, each with different maturities–but realize that you have to take out the RMD each year (the 50% penalty is nasty!).

If the bank that has the CD isn’t willing to do let him keep the money they way he wants, call around to, say, Fidelity, Schwab, Morgan Stanley, etc. All of those will let him open an IRA, will do the trustee to trustee rollover, etc. (But watch the fees!)

Wealthier Investors Get Do-Over With Roth IRA Rules (Correct)

(Corrects IRA charitable donation expiration in 16th paragraph.) Jan. 28 (Bloomberg) — U.S. investors who convert a traditional Individual Retirement Account into two or more Roth accounts to make a bet on the market rising can save on taxes if it doesn’t.

Investment Advice : IRA Rules for Investing

Question: Should I file taxes jointly when my Wife didn’t file her income taxes for years?

I am recently married and my wife filed her taxes for the first time last year (we were not married then) and she was suppose to get a refund but the IRS took 90% of her return back.

If I file jointly with her this year, will the IRS take my money as well? How do I know that the 90% they took is all she owed the IRS?

How can I get my maximum refund but not be in jeopardy of losing it? I reside in New York City by the way.

Answer: you could always file seperately, even while married. Maybe that will help

East Coast Digs Out From Record Snow

The beleaguered mid-Atlantic will now resume digging out after logging 3 feet of snow in a week. The second major storm within days roared through the region Wednesday, leaving a fresh blanket from Washington to New York.

News Minute 11.05