I Received An Email Claiming To Be From IRS

This is called phishing and it didn't come from IRS. I have received one of these myself at my office in Texarkana, Texas and ignored it. I have never received one at my home email located in Texarkana, Arkansas. All my dealings with IRS agents is by phone, fax, or face to face meetings. In IRS Tax Tip 2013-19 the IRS offers the following advice if you receive an email claiming to be from IRS. Do not reply to the message. Do not open any attachments. Do not click on any links in a suspicious email and do not enter confidential  information. The IRS wants all taxpayers including those in Texarkana, Arkansas, Texarkana, Texas, Miller County, Arkansas and Bowie County, Texas to know the following information about phishing scams. The IRS doesn't initiate contact with taxpayers by email or social media channels to request personal or financial information. The IRS never asks for detailed personal and financial information like PIN numbers, passwords, or similar secret access information for credit card, bank or other financial accounts by email. The address of the official website is www.irs.gov. Don't be mislead by sites claiming to be the IRS but ending in .com, .net, .org or anything other than .gov. 

If you receive a phone call, fax, or letter claiming to be from IRS but suspect they aren't you can call the IRS at 1-800-829-1040, forward the suspicious email to phishing@irs.gov, or visit the IRS website and click on "Reporting Phishing" at the bottom of the page.


Selph & Friday CPA
Phone: 903-792-0281
www.selphandfridaycpa.com
Email: rselphcpa@cableone.net

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I Didn't File Taxes This Year. What Will Happen?

Most likely nothing right away. At some point, the IRS may send you a soft letter asking for your tax return for the year you didn't file. You usually receive this in the year after the return is due (2013 notice for 2012 returns). If you ignore them, at some point they could file a tax return for you based upon the income information available to them. This return won't likely be filed in the most favorable manner for you and you will owe them money. What is more troublesome is how this ends. While you may get this taken care of,  I rarely file one year's deliquent income tax return but rather 3, 4, 5, 6 or more years. When you skip that one year and you don't hear from IRS for a while then one year can become multiple years. A smaller issue can become much larger if you don't bring your filings current. Don't let this happen to you.


Selph & Friday CPA
Phone: 903-792-0281
www.selphandfridaycpa.com
Email: rselphcpa@cableone.net

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Deliquent Filer NO IRS Contact

You haven't filed in a few years, maybe quite a few years, but you hear nothing from the IRS. How can this be? Well there could be a number of reasons. You may have just fallen through the cracks (no kidding it happens). Maybe you don't have any reportable income like W-2s, 1099s etc., or maybe something you haven't considered, the IRS owes you money. If you don't file, you don't get a tax refund. If the IRS thinks you owe them money, they will file for you and assess the tax. This return is called a SFR (Substitute for Return). These returns use the income information available to IRS and they will either file you as single or married filing separate, assess the tax if you don't respond, and begin collection actions.  If IRS doesn't file for you then they may have determined you don't owe them money. They may owe you money! I have filed many deliquent returns that had refunds coming plus interest. Sometimes it is substantial amounts. Only problem is if your refund is over 3 years old the IRS keeps the money. You don't get it. If you are behind in your tax filings you need to get current. You might even have some money coming!

Selph & Friday CPA
Phone: 903-792-0281
www.selphandfridaycpa.com
Email: rselphcpa@cableone.net

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Is the IRS Hard to Deal With?

Unfortunately, in this environment the answer is yes. As I write this blog, I am on hold for 30 to 40 minutes to reach the IRS on a dedicated line for people like me who represent taxpayers. If the long wait wasn't enough, that is just the beginning. 

I am trying to get some transcripts for a taxpayer who hasn't filed in several years. My first call for this taxpayer was on hold for 56 minutes only to be told by the IRS representative that the transcript delivery system is down and no transcripts are available. You must call back, which I did. This wait time was 65 minutes. Got a nice agent who gave me the information I needed and agreed to send me the transcripts, which he did. 

The only issue was that I needed 7 documents but the transcript delivery system only sent me two documents and part of another one. So, I was back to square one. Current call is answered in 33 minutes this time with another nice agent. She is faxing me the documents I requested again so we shall see. 

One thing I can guarantee you is that I am determined to see this to the end and will not give up. 

Wish me luck maybe I will receive the documents this time and we can proceed.

Selph & Friday CPA
Phone: 903-792-0281
www.selphandfridaycpa.com
Email: rselphcpa@cableone.net

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Your Retirement Account Is Not A Savings Account

Taking distributions from your retirement accounts before age 59 1/2 can have harsh tax consequences. If the distribution is a premature withdrawal, then you owe regular income tax and a 10% penalty. State income taxes and additional penalties can be piled on top of this. If you are in the 25% regular income tax bracket plus the 10% penalty then add 7% Arkansas income tax plus a 1% penalty. That's 43% of your retirement funds going to taxes. Quite a price to pay! You may be in a lower or higher bracket or not pay state income tax but I think you can see you need to get the facts before you request the money. There are 12 exceptions to the 10% penalty so you may qualify to avoid the penalty. What I see on a regular basis is that the money is withdrawn and we start to prepare the tax return. The taxpayer says they held the tax out so I should be ok. Well the tax withheld is normally 10% or 20%. Neither amount is sufficient to cover the tax due and you get much lower refund or owe the IRS money. If you leave a job consider rolling over the retirement account to an IRA instead of just cashing it in or if you need money at least give us a chance to determine the tax cost before you request the funds. The tax cost is often far higher than you expect and makes a premature retirement withdrawal a bad financial move.

Robby 
Selph & Friday CPA
Phone: 903-792-0281
www.selphandfridaycpa.com
Email: rselphcpa@cableone.net

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Will IRS Withdraw My Federal Tax Lien?

Yes, if you qualify. You can get your federal tax lien withdrawn after the lien has been released if your tax liability has been satisfied, your lien has been released, and you are in compliance for the past three years in filing all individual and business returns and all information returns. You must also be current on your estimated tax payments and federal tax deposits, as applicable. You can also get a lien withdrawn by entering into a direct debit installment agreement. Eligible taxpayers are individuals, businesses with income tax liability only, and out of business entities with any type of tax debt. The tax debt must be less than $25,000, you installment agreement must full pay the amount you owe the earlier of  60 months or before the collection statue expires, you must be in full compliance with other filing and payment requirements, have made 3 consecutive direct debit payments, not received a lien withdrawal for the same taxes unless the original lien was in error, and you haven't defaulted on your current, or any previous direct debit installment agreement. This is an excellent option if you qualify as it will withdraw the federal tax lien as though it was never filed. IRS form 12277, Application for Withdrawal is the form you use to apply to have a federal tax lien withdrawn.

Robby
Selph & Friday CPA
Phone: 903-792-0281
www.selphandfridaycpa.com
Email: rselphcpa@cableone.net

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IRS Tax Lien On My Credit Report!

The IRS can and does file federal tax liens for tax debts over $10,000. We all know that federal or state tax liens on your credit report are not good for your credit score. Loan rates, insurance premiums, and probably more stuff than you can imagine are based upon your credit score. Nothing raises your banker's blood pressure like a tax lien. Federal tax liens are public information. In Miller County, Arkansas you can get a copy of your tax lien from the Miller County Circuit Clerk's office. In Bowie County, Texas a copy can be obtained from the Bowie County County Clerk's office. If the collection statue has expired, the federal tax lien is no longer enforceable and the debt is forgiven. This date is in column (e) on your federal tax lien unless you have extended the collection statue. Common ways to do this are by filing bankruptcy, timely filed collection due process requests (CDP), or offer in compromise. The federal tax lien can still appear on your credit report since it is what the IRS calls a self releasing lien as explained in Important Release Information on your federal tax lien. The way to show this lien is no longer valid is to get a manual release from the IRS lien release unit and file it at the county courthouse. Then forward a copy of the release to the credit reporting agencies. This will show the federal tax lien as no longer valid and should have positive financial consequences for you.  

Robby
Selph & Friday CPA
Phone: 903-792-0281
www.selphandfridaycpa.com
Email: rselphcpa@cableone.net

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What Is A Federal Tax Lien?

A  federal tax lien is the government's legal claim against your property. It applies to all property, including real estate, personal property, and financial assets. This is a public document filed at the Miller County, Arkansas circuit clerk or Bowie County, Texas county clerk's office. This lien also attaches to future assets acquired during the duration of the lien. The IRS form is 668(Y)(c) and is a public record for all to see. The lien has columns (a) through (f) on it. These columns provide information as follows:

(a) Kind of tax - Form number tells you what kind of tax. Payroll, income tax, excise tax, civil penalty etc.
(b) Tax period ending - Period tax is owed generally quarter or year end dates.
(c) Id number - Social security number for income taxes and federal id number for business taxes.
(d) Date of Assessment - Date tax owed was assessed.
(e) Last day for refiling - Collection statue date. If this date has passed you may no longer owe the money.
(f) Unpaid Balance of Assessment - Amount due to IRS at time of filing not what you owe at a later date as the penalty and interest continue.

If you have a federal tax lien, go get a copy. We use this information to order documents from IRS related to these periods as we assess solutions to your IRS issues.

Robby
Selph & Friday CPA
Phone: 903-792-0281www.selphandfridaycpa.com
Email: rselphcpa@cableone.net

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IRS Problem 911 For Taxpayers?

Normally if you call 911 you are going to get law enforcement who asks what is your emergency? If you can't resolve your issues with IRS through normal channels, you can use IRS form 911 to receive assistance from the Taxpayer Advocate Service. The title of the form is Request for Taxpayer Advocate Service Assistance Form 911. Taxpayer Assistance Service is an independent organization within the IRS that helps taxpayers resolve problems with the IRS. They are a tremendous organization that I have used many times to help with my cases when the IRS is a bit stubborn. You do have to meet their case criteria to get their assistance. Of particular interest to the TAS are cases where IRS creates hardship for taxpayers that can't pay their  basic living expenses. There are other issues the TAS can help you with and they can cut through the government red tape to get results.

Robby
Selph & Friday CPA
Phone: 903-792-0281
www.selphandfridaycpa.com
Email: rselphcpa@cableone.net

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Will My IRS Debt Last Forever?

NO! There is a collection statue expiration date for an IRS debt. Generally that date is 10 years from the date the tax is assessed.  I meet with people who say, "I have been trying to pay on this but I don't think I am ever going to get it paid off with IRS adding penalty and interest every month." We get the transcripts or call IRS to determine where are you in the collection process and how long will this debt last? It is not uncommon for IRS debts to be approaching the expiration date and the taxpayer have no idea their debt is about to be forgiven. In 27 years I have never had an IRS agent tell me when a collection status is about to expire. You have to ask. A bankruptcy filing, a timely filed collection due process request, or an offer in compromise are common ways the statue is extended beyond the 10 years. If you take these actions, the clock stops and isn't running while these actions are pending. Don't file bankruptcy a month before the statue expires to extend the collection statues unless you have too. If your debt expires, then the transcript of your account will say statue expiration debt forgiven. Your balance will be zero. We always want to know how much time is on the clock as we determine how to help you deal with an IRS debt.

Robby
Selph & Friday CPA
Phone: 903-792-0281www.selphandfridaycpa.com
Email: rselphcpa@cableone.net

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Monthly payment for my IRS debt?

The answer is generally yes but before you move ahead with a payment proposal for IRS we like to get more information. First, we would like to determine your ability to make a monthly payment to the IRS. If you don't have any ability to pay that presents some options. If you don't have assets that disqualify you why not submit an offer in compromise to settle your tax debt for less that you owe? This would be a great option. If your offer is accepted then you can just get the matter settled and put it behind you as long as you stay in compliance for the next five years. Second option is if you have no ability to pay then your account can be placed in non collect status. You have no ability to pay IRS so you don't have to make a monthly payment. This has to be submitted to the IRS on their financial statement with attachments to prove your inability to pay. The penalty and interest do continue to be added to your debt but you and your family don't have to do without just to pay on an IRS debt if you have no ability to do so. The next information I would like to know is the statue of limitations expiration date. An IRS debt doesn't last forever and we want to know when the statue expires. Yes, the time for IRS to collect can expire and your account transcript will say statue expiration debt forgiven and the balance will be zero. You have to ask when the statue will expire IRS doesn't just volunteer this information. I see people try to deal with a revenue officer and get a payment amount that is much higher than they can  pay. This leads to a defaulted agreement. Collection action will ultimately follow and you will be right back where you started. There is often more than a monthly payment involved when you look at your IRS debt and how to deal with it.

Robby