Is It The IRS Calling?!

This post is to provide some basic Internal Revenue Service information so that you don’t fall for some of the scams out there.

The IRS does make phone calls and it does send agents to businesses if you are behind in your taxes or have other unresolved tax issues.

They will not do this for any first attempts to contact you so if you ever hear from anyone by phone or email claiming to be from the IRS and you are fairly certain that you do not have IRS issues, don’t fall for it.

The recent scams sound official and from what I understand, they give people the same type of information that the IRS does.  They give a name, badge number and a case number.  The IRS gives this information out as well as a phone number for the taxpayer to call back if they are not comfortable speaking with this “stranger” on the phone.  It’s perfectly natural not to trust someone calling saying they’re from the IRS and the IRS does not know who they are speaking to until they request that you give them your personal information including your full social security number so that they may verify this with their information on file.  I urge all taxpayers not to give the person calling any information, especially a social security number, but instead take the number you are given by them and call the official number of the IRS, 800-829-1040, to verify it is legitimate before calling back!  If you are not given a phone number to call back or they are requesting payment information, hang up because you know its a scam.

It’s important to remember that the Internal Revenue Service’s first attempts to contact is by mail for most problems and it is very important to respond to that first notice so that your issue does not blow out of proportion and you accrue additional penalties and interest.

Though some IRS agents and field representatives will take payments, never give any payments or payment information to anyone collecting for the IRS.  The collection representatives will give you the information needed to send your payments depending on your state and how you wish to make them.  If you aren’t able to fully pay your liabilities, they will be able to establish some type of payment arrangement for you.  Please don’t establish one if you really are in dire straights financially and will only end up defaulting right away.

If you believe that you are in some kind of a hardship situation, let the IRS customer service rep know this so they can take the appropriate action.  They will need to collect some financial information from you so they can determine if you are currently uncollectible and all collection will be placed on temporary hold.

More information can be found on this and other IRS Collection issues in my book soon to be on Amazon.com.

DntMsWIRS5

 

 

Daily Prompt: Failure to File and Possible Consequenses

April 15th is fast approaching and failure to file can be a serious issue.  If you are liable to file, you will need to do this sooner or later so no sense ever putting it off just because you are unable to pay your tax.  The main reasons why some fail to file is they think they are not liable or they are unable to pay the tax so they think the IRS will not notice them if they don’t send it in.

(I am trying to keep my tax posts shorter so they will be easier to understand, more to come!)

There has been online free filing available for the average middle or lower income brackets for many years now if you are a W-2 employee and under a specified dollar amount each year.  For the self employed or small business owner, you will need to find a trustworthy tax preparer if you are not able to file the return yourself.  There are some areas that will help you file if you are a senior or low income as well.

Those that don’t have the money to pay their tax and think they can go undetected need to know that the IRS receives the same 1099 and W-2 information that you receive from your employers each year.  Thanks to computers the IRS has a real good idea of who is liable to file so not having the taxes to pay because of insufficient withholding or non-payment of your self-employment or estimated tax during the year is no excuse.  Others just don’t want to pay and have some delusion that they can get away with it.  Some may think they are not liable, but actually are or the IRS thinks they are.

For the wage earner, W-2 employee, you can quickly figure out if you are liable by comparing your gross income less your deductions, exemptions and any other credits you are entitled to.  If the income is more than the total of your deductions, exemptions and credits, you may not be liable.  In other words you either would not be owing tax or you may actually be entitled to a refund.  The IRS will not file for you in the case of a missing return due a refund.  You would just risk never getting the refund for that year if you waited longer than the refund statute of limitations of three years.

Example, you failed to file for three or more years even though you were owed a refund each year.  If you finally decide to file one of the returns for the refund, the IRS will insist you become compliant, or up to date with all of them from the last 6 years before they will give you the refund for that one year just in case you end up owing for any of the other delinquent years.  Keep in mind that the IRS has no idea what your credits or deductions are, even exemptions because they can’t be sure how many people you are claiming and why for each year as well as what you are writing off.  Important!  Sometimes the IRS thinks you are liable to file and owe money when in fact if you filed with all your correct information, you would be due a refund.  Once you file all the returns, you will only be sent the last three years refunds even if you qualified for the last five missing years they finally received due to that statute of limitations on refunds.  Never let them keep your money because of laziness or lack of knowledge.

Important reason to know why you need to file timely even if you cannot pay your tax is that the IRS will penalize you for both non-filing and non-paying separately.  Failure to file as well as your failure to pay the tax timely.  If you file timely but don’t pay, you will be spared the failure to file penalty, but you will be paying the failure to pay penalty unless you can arrange something with them by perhaps making installment payments if you have no other way of securing the funds.  This is another reason not to fudge your W-4 at work.  You want to be sure they are withholding the correct amount so you do not end up with a tax deficiency by year end.

The IRS can and does file a substitute return, ASFR, for taxpayers that do not file and are liable to file and have taxes due.  Sometimes they don’t get around to doing this for years so don’t think you’re forgotten if they don’t send you anything for quite a while.  Once they do file for you, depending on how late it is, you will receive additional fines and penalties accordingly.

For help with Affordable Care Act questions when filing.

Is The IRS Messing With You?

Tax time is coming fast but most of you have hopefully already filed if you are liable to file.  I know those expecting refunds are usually the first to file every year.  I know I was.  The years I owed I waited until April 14th because I did not want to be one of those cramming the mailboxes with my return.  You want to keep your money as long as you can naturally.

Usually if you have your withholding or form W-4 filled out correctly with your employer, you will not owe at the end of the year and should get a small refund back depending on any credits and the amount of your deductions for the year.  Few are exempt from withholding.  You should never be getting a huge refund back or owe a lot unless there were extenuating circumstances for that tax year.  If the IRS finds that you are using them as a bank during the year by low-balling your exemptions thereby more money is being withheld during the year that will only need to be returned back to you next year.  The IRS does not like refunding for any reason unless they have to but you shouldn’t have any problems if it’s one or two exemptions lower or you file zero and you are single.  If you claim zero but have 5 people in your family and expect many thousands of dollars in a refund you may get a form letter in the mail asking you to make the proper adjustment to your W-4 at work.

If you are on the other end of the scale, and input a false number for your exemptions so you can take home most if not all of your withholding during the year and you end up owing, you better be able to pay it off entirely by April 15th or you could end up the many that the IRS will send a memo to your employer requesting maximum withholding for a specified period of time as your “punishment.”

Tax fraud is at an all time high and you must be vigilant to protect yourself.  There are phishing and downright scams going on all the time with people trying to prey on others.  Please click on HELP if you wish to get more information on these subjects and how to respond appropriately.

There are also those that file false returns under other people’s identity.  Click on HELP for information on how to resolve any type of tax identity fraud.

As long as you follow the basic rules of what the IRS expects from you, you shouldn’t have problems with them.  If you have a hard time following instructions or the law or are deliberately trying to pull something, then expect to hear from them and depending on what the issue is, they can come down on people very hard with penalties and interest that accrue like crazy!  If you ever find yourself with collection issues, please contact the IRS right away BUT….This is very important….NEVER CONTACT SOMEONE IF YOU THINK IT IS FRAUD!!  Just refer to the above help links with the IRS for procedures or you could risk a virus to your computer or worse.  If you are expecting to hear from the IRS about back tax or something else, then just verify the address and phone number with their website if you want to play it safe, and then call them.  They almost never send emails!

Don’t Mess With The IRS An Unauthorized Customer Service Guide to Resolving Your ACS Collection Issues” will be available on Amazon.com by April 15th!

Don’t Mess With The IRS

Shortly after leaving the Internal Revenue Service I sat down and wrote a book to help all taxpayers based on what I experienced in their collection area.  After actually being in the belly of the beast, the very heart of what the IRS exists for, I saw that they were really not as bad as people tried to make out.

In the past I had a couple of issues with them myself because I did not claim some early retirement withdrawal in which tax was withheld before I received it and I genuinely thought I didn’t have to declare it because they had to have already known about it.  Oh how innocent I was!  Another time I didn’t realize there was something called EIC that I qualified for because of a drop in my income.  I’m sure many people don’t know any better when they are about to file.  In fact most IRS issues are genuine failure to follow through because you think you are not liable to do something from filing to reporting things.  The IRS will give you the benefit of the doubt if this is your first time making the mistake.  One time I owed tax the other instance, they gave me a refund because of a credit I didn’t know I had coming.

Most of the time I handled the incoming calls from those that had levies and liens issued against them.  That is the area that also issues these collection actions.  The taxpayers are sent several notices before their cases are transferred to the Automated Collection System for further collection action.  They will try to call you and send you additional notices depending how many were previously sent.  If you don’t call within the time frame given, they will issue liens on any property you may have and levy bank accounts or your wages.  You have to respond even if you cannot pay or don’t plan to file.  It will go much better for you and the representatives will go over many options to resolve any issues you have that you probably are not even aware of.  They will actually be able to stop or prevent collection against you regardless of what you owe if you are currently in a hardship status.

My book was to let people know the easiest and best ways to resolve their individual tax problems without the added expense of a third-party.  It is very easy to deal with the IRS.  There are not ways they will trick you or any other such nonsense.  Make no mistake they will want you to “full pay today” as they are required to ask you, but as long as you tell them what you are able to do, they will work with you.  Many so-called tax resolution experts are not who they say they are and most are either fraudulent, deceiving or incompetent at best.  In the years I was there, we literally talked to thousands of people that were defrauded by just such people by thousands of dollars they could have used to pay towards their tax liabilities or used towards an Offer-in-Compromise if qualified.  Many POA’s simply never bothered to even contact the IRS on behalf of the client that they just filled out the 2848 form with.  This form states for the taxpayer not to call themselves and for this fact, they know you won’t know that they haven’t called yet until you end up with collection action on you.  Then good luck finding some of them that actually disconnect their phones and skip town.

Notice how the tax resolution commercials all seem to say to contact them if you owe over $10,000.  That’s ridiculous!  Any legitimate expert will take your case regardless if you owe anything and work out a reasonable fee with you.  These companies hope that the more you owe, the more you won’t mind paying the $2,000 or more in fees in the hopes they will be able to offer pennies on the dollar, which almost never happens.  Yes there may be legitimate tax accountants and attorneys, there has to be, but don’t just go with anyone.  Make sure who you are dealing with before you make any business deals or sign anything.  Be sure they are referred by someone you trust and respect.  There were many that were taken advantage of by relatives or relatives of friends of theirs so just because you know them does not guarantee anything.

DntMsWIRS5

For the time being, I can only offer “Don’t Mess With The IRS An Unauthorized Customer Service Guide to Resolving Your ACS Collection Issues” by sending a postal money order or cashiers check to:

I promise to post more information regarding tax information and resolution in short increments in the future.

See duplicate post under pogirlshines.me Tax Problems?