The IRS

[DainBramaged]

Earlier this year I was notified by Sony that my identification credentials may have been compromised because their on-line game system was hacked. Being that I hadn't been involved with them since playing a trial of Conan a lot of years ago I didn't sweat it. But the notifications kept coming from them to take precautions,blah blah blah. So I did.

I posted a credit hold on all three of my credit reports and oh by the way, got a free copy of my credit report for doing so. And on the last page I saw it, an IRS tax levy for multiple tens of thousands of dollars. I nearly had a panic attack because I had no clue as to what was going on. So in May I took a vacation day, and went down to the IRS office (since you can't speak to anyone on the phone unless you get the super secret phone number because YOU owe them money.) to find out what's going on.


Turns out, my 2004 (TWO THOUSAND AND FOUR) tax return never made it to the IRS. And what was amazing was instead of sending notices to the last address from my 2003 tax return, which would have been forwarded to my new address in 2005, they sent the notices of being late and where is your return, and we're going to get you to a post office box I never owned or was associated with. Now, you can only claim refunds going back three years, but the IRS can get you for back taxes for seven years. In November of 2010 the IRS filed the tax levy (meaning they think I owe them but they hadn't garnished any assets yet) still sending notices to the PO box I never owned, and even though they kept getting 'not at this address' from the post office, they never gave up.

Leaving the office I was completely panicked. I didn't know if I had any of my files left from 2004, and the accountant who did my taxes that year was long ago out of business, so I was between a rock and a fireplace. I received a certified notice on September 8th that on October 8th they were going to file to attach any property I own and any salary I made and oh by the way I could go to the hearing in Rochester NY. (By this time you have to imagine how I felt). Here I am 60, one of the working poor, I have to decide each week between food and medicine, and they want $30+ thousand dollars or I'm basically dead. I live in an apartment, I am paying for my car, my IRA is long gone, and our new health-care (?) plan at work now costs $126 a week for ME and my medicine co-pays went up 50% and anything we do now has a 20% co-pay (ownership is not very pleasant).

I got them to give me another month, actually till tomorrow to find someone to recreate my 2004 return. I had found my copy of the 2004 return showing I lost money and owned no taxes, but I no longer had the documentation attached. I went through dozens of boxes of files and finally found some of the 2004 receipts and journals. It was something, but now I had another problem. No one wanted to help. 20 accounts, no one had software to do 2004. I'm screwed royally now. Two weeks ago I'm in an absolute panic when I talked to a friend to turned me on to his accountant. I met with them last Thursday.They would help as best they could, but his 'help' wasn't going to come cheap. $800 to recreate my 2004 tax return. And I have $134 in the bank.

He let me pick the return up yesterday. I gave him $100, had to pledge to give him $200 a moth for the next three months plus a final payment of $100 at 22% interest annual or he would sue me if I didn't pay him. What a great guy. And to top it off, I wound up owing over $8000 still. We couldn't find the last quarter of 2004 and a few credit card statements I needed for expenses. Jesus it's SEVEN YEARS AGO and the IRS wants mu blood from a stone.

I called the IRS last night, and talking to the agent I finally broke down, the nightmare isn't over. Once they get the returns, they'll cancel the levy and re-calculate the fines and penalties for being late and I'll have to work out a payment plan for the rest of my life. And that's on a net of about $50 a week after all of my expenses. And trust me, I have no more luxuries in my life, even Netflix is gone. My life officially sucks. I can't even give my beautiful daughter a Christmas present this year. And they won't give me a raise at work. A measly $100 a week, yet they hire 'managers' at the drop of a hat. I mailed the return this morning.


We're not GE. They will do it to any of us. God only knows why my return got lost in the first place. the IRS made a number of mistakes, and why they decided to come after me for this on the last day before the 7 years expired is beyond my understanding. Maybe the one agent I talked to last month said it all. "We have to get it from somewhere", and when you can't afford a lawyer or tax expert, or GE, they get it from us.


Thanks for reading.

[democrat_patriot]

1. Jesus Christ. What a horrible story.

So you still owe 8K?

[DainBramaged]

10. And if I had "Charlie Sheen busted for tax evasion" in the thread, it would be on the greatest page

in spades.

So be it.

Yes, over $8000 plus fines and interest when they are done calculating them for SEVEN years.


Can't change banks, can't get credit, can't do anything while the IRS has a hold on your life because YOU are a risk.

[ejpoeta]

2. I am sorry to hear about your troubles. I think it's crap if they sent it to a PO box

you never even owned. The only reason you found out was you saw it on your credit report!! that is bs.

[OhioChick]

3. Wow....I'm sorry to hear this.

:hug:

[sarcasmo]

4. he whole tax system needs to be simplified and when we pay more than corporations it is set up for u

Keep documents of the payment plan for eternity and names of the agents you speak with just to cover your ass in the future.

[Pacifist Patriot]

5. Beyond dreadful!

[DocMac]

6. Tardytax goes back that far and cost $60/yr. filed.

I know because I had that problem last year. They ended up paying me.

[DainBramaged]

11. (sigh) this was from when I operated my own IT service 7 years ago

Withing two years of starting my business I was undercut so much by the H1B visa insourcing firms I had to fold up shop, and my market was Auto dealers. At one point because of my familiarity with their business models and software, I was getting $95 dollars an hour and on call 7 days a week, but when you have to compete with a fucking scab offering to do what you do for $15 and hour within four hours of being called, I was out of business by 2006. And people wonder why I hate our jobs lost to the out/insourcing H1B visa workers. A couple of those dealers still call trying to get me to work on the side because they learned their lesson, but I have a non-compete where I work so I can't enhance my meager salary........


Tardytax, great, thanks for the tip, but as usual on DU, it's always a day late.........

[DocMac]

12. I understand it's too late.

I also understand the h1-b visa problems in this country. My brother is an IT consultant...he has stories about that.

The IRS hit me with my E-Trade stock transactions and tried to say I owed 65k. They took $4,000 from my checking and I freaked out. I didn't put those transactions in because I lost thousands. But if you look at what they think, it seems like the IRS doesn't understand math or think i'm stupid. E-Trade posts the previous year online...so I had to call them to unlock three years of trades and send those in.

Sorry to see your post and how they are treating you. You might consider a trial from reading your original story. I'm sure you can get a jury that will believe that, in your case, was wronged.

I certainly hope you keep all receipts from now on. I see you are a victim, but you have to come back at them with all the weapons needed to put them back into their cubes.

But tardy tax did me right and at $60/yr....not to bad. And the software was good.

Fight back and find all the deductions that you can from this point on. Read,read, and read some more, and don't let them do it again.

[starroute]

7. Your best hope may be to go public

Find somebody at a local newspaper or tv news show to tell your story to. Do some googling to see if any of them have done raped-by-the-IRS stories before -- and if not, just start calling around and see who you can get interested.

I can't swear that this will get results, but I know I've read in the past about situations where massive public embarrassment was enough to get the IRS to beat a hasty retreat.

It also might not hurt to talk to your local congresscritter's office.

[Tesha]

8. I realize I'm telling you this after "the horse has left the barn", but...

*NEVER* throw away your old tax returns or any of
the critical supporting paperwork. Certainly never
throw them away before seven (or even ten!) years
has elapsed. This is especially true if your return
is more complex than a 1040-EZ or 1040-A.

Using a tool like TurboTax makes this easier; when
you're done, burn *EVERYTHING* (including the program
itself and all of its supporting files) to a CD-R and then
keep the CD-R with your paper copy(ies) of your tax
returns. Then, the only problem becomes "will you still
have a computer old enough to run that copy of TurboTax,
but if you don't, someone will probably give you one for
free!

It's also useful to keep other related documentation like
credit card and bank statements. With just a few bread-
crumbs, you can reconstruct pretty plausable documentation
from those. (In TurboTax, we keep "itemizations" that tell us
what form of payment was used for each business expense,
e.g., "Business check #xxx" or "Mr. Tesha's Visa".

Tesha

[riderinthestorm]

16. Just a kick for your post alone for the pm crowd. We were first audited 21 years ago.

I still have every record from that day until today. Getting audited scares the SHIT out of you and its a life lesson. NEVER throw business records away. You just never know when they will suddenly descend upon you and yours. After out first experience we learned and the next two times were much smoother (of course we've paid out the ass for a tax attorney to do our taxes ever since and he backs up his work by representing us with the IRS when we do get audited).

Still these are wise words Tesha.

[Tesha]

17. Thank you. (NT)

[riderinthestorm]

9. I firmly believe they go after the "little guys"

small corps and low wage private individuals because they know you don't have the legal and financial resources to fight them.

We're a small horse business and we've been audited 3 times.

I feel your pain, I really do but I believe it's a purposeful action by the IRS to target people like us because they KNOW we don't have the financial wherewithal to drag the fight on. They know we must cave because we don't have enough resources to keep a tax attorney going that long. We fear owing the $8000 AND the tax attorney's fees. They know we don't have the cash or resources.

We're easy prey. It's hard to target the big companies that probably really ARE defrauding the IRS.

Hang in there. I am so, so sorry and I truly know how horrible this feels.

[DocMac]

15. The IRS is funded by taxpayers.

I've seen supid criminal trials where a community spends millions and loses.

The IRS could very well drag bigger fish to trial and probably win. You just have to ask yourself why they don't.

[joeglow3]

13. Attach a letter explaining all of this and ask for an abatement of penalties and interest

I can honestly say in all the times I tried this for clients, it was never once turned down.

I hope that this works out the best for you and you will be in my family's prayers. By posting this, I hope you can help others from making the same mistake. In most cases, you will either owe money are have a refund coming. Make sure with 100% certainty that your check is cashed in you owe money. It is REAL easy to find yourself on the receiving end of an IRS raping.

[Tesha]

18. It's almost inconceivable that your withholdings and estimated payments would exactly match...

...your tax liabilities so yes, you should definitely
either watch for the IRS to cash your check or you
should quickly receive your refund check. (Nowadays,
with free E-filing, your refund check should arrive
quite quickly!)

And if my tax liability ever *DID* exactly match
what I'd already paid-in, I'd probably deliberately
omit a charitable donation or some such just to force
the situation "slightly off zero". Not only would I
want that permanent confirmation that the IRS got my
return (in the form of my cashed check), but somehow,
I'd always be suspicious that having the numbers work
out "just right" would be an audit trigger.

Tesha

[Zanzoobar]

14. My advice: "Thank you, Sir. May I have another?"

Last year I paid penalties on reports which the IRS sent to an address I had not lived at for over five years.

The lawyers will cost more than the penalties, and they know it.

It's the gummit.