The IRS Audit Blog

Posts Tagged ‘collection’

Question: I got a letter from the IRS! HELP!!!?

My ex husband and I had to file our taxes together for the 2005 year, I didn’t turn in my W2’s and now the IRS sent me a letter with both our names addressed on it. We filed taxes last year using only his W2. Who are they going after for the money? I don’t have the money now to even make payments to them and I want to know can I just not respond and just wait this out till this years taxes and let them seize my check? Help my deadline date is Nov. 21.

Answer: They will try to “go after” both of you if you filed a joint return. Not responding is not the best course of action.

They should have sent you information in the notice that discussed payment plans. You can set up a payment plan for the amount due; it can be either an amount you send each month, or they can withhold it from your paycheck.

If you’re expecting a refund for this year’s taxes, you can tell them that. Again, the best course is to talk to them or write them explaining the situation.

See the link below for information on requesting an installment agreement

IRS Eases Tax Debt Policies

But the IRS Taxpayer Advocate says new tax-lien leniency doesn’t go far enough.

3rd Party Access to My Tax Account

Question: can mortgage lenders tell if you owe irs and state taxes when you are applying?

i am and have been on a payment plan with an irs for the past 2 years. I just received a collections letter regarding state taxes from four years ago. if i were to go and apply for a mortgage would that pop up in some way?
none of that information regarding taxs is on my credit report

Answer: It will be there and you can’t finance with an instant lien.

Senate Fails to Repeal 1099 Rule

The U.S. Senate failed today to adopt language that would have repealed a rule, created by the health-care overhaul law, requiring businesses to report annual expenses to individual vendors in excess of $600.

IRS Collection Statute Expiration Date (CSED)

Question: Any attorneys out there? Tax lien situation whereby IRS has garnished wages to the point of poverty; remedies?

This info is for a freind whom has consulted w/ an atty. and stated that the only option is a settlement. This party does not have the money for a settlement nor enough assets to sell off to erase the tax liability. All wages garnished and personal asset(s) i.e. car has lien attached. Bankruptcy won’t work due to this is non-dischargeable debt. This person understands the need to pay and has a good job-salary, but the IRS has left her/him with $333 to live on ea. month. Bascially poverty-stricken. No doubt the gov’t has legal basis to due this, but, but, I believe it’s unfair/ unjust to propel a person into dire straits with collection efforts. If the garnishment was not at the present level e.g. leaving this person with say $1000 to live on monthly, it would be affordable. I don’t think the IRS… tax system, was setup to render a preson homeless or otherwise. Thank you for any assistance.

Answer: Obviously, I don’t know all the details, but the IRS will usually levy wages only after they have been ignored for a long time. Your friend needs to come up with a payment plan, either a proposed installment payment plan (form 433D, I think) or a partial pay offer in compromise (form 656), along with a financial statement on form 433A. The forms are on the IRS web site http://www.irs.gov. Good luck.

Erlanger provides biggest share of free care

Chattanooga’s two nonprofit hospitals each claim about 40 percent of the local market, yet one of them — Erlanger Health System — shouldered nearly 80 percent of the free hospital care provided to poor patients who aren’t expected to pay their bills last year, according to the most recent data reported to the state.

KJ Law Firm Introduction video

Question: The Specter Of An IRS Audit?

If a woman inadvertently mischaracterized a 401k withdrawal on her 2004 return as a rollover (rather than its actual use — home purchase), and the amount ($20k) was more than 25% of her income:

1. What are the chances the error will be detected if it has not been detected thus far?

2. Is the statute of limitations 6 years from the date the 2004 return was filed?

3. At this point, is there a legal duty to correct the innocent mistake?

Merci.

Answer: 1. The IRS has a habit of waiting until the last minute–just before the limitations period for assessment expires–before opening an audit. But in your case, the initial statute of limitations has passed (see below). So I don’t think it’s likely you would get a letter now.

2. The statute of limitations is three years from the date the return is filed or April 15, whichever is later. HOWEVER, there is a 6-year statute of limitations on assessment of amounts at least 20% of the taxable income on the return. The amount–25% of the income–may not be more than 20% of the TAX she had to report. So it’s impossible to tell without having more detail whether the 3-year period or the 6-year period would apply.

There is NO statute of limitations on fraud. But if she (you) didn’t know of the error at the time you filed the return, then there was no fraud.

3. There is no legal duty to correct an innocent mistake. But the question is, Is it worth the risk of not correcting the mistake, considering all the penalties and interest that come along with it? At this point–after the 3 years is up, but before the 6 years is up–you alreaday would have accrued a lot of interest and penalties, so not too much of a risk.

Retain important records and cut the clutter

As you gather the papers necessary for this year’s tax return preparation, you may be wondering what records you need…

Offer in Compromise | IRS Tax Debt Relief

Keep important records and cut the clutter

As you gather the papers necessary for this year’s tax return preparation, you may be wondering what records you need to keep and how long you need to keep them.

IRS Collection Statute Expiration Date (CSED)