IRS Troubles

[SamC.]

Pelican Clan, looking for some advice/counsel to pass along to a family member.


The family member received a notice last week from a IRS collection agency for unpaid taxes from 2013. The $450.00 tax bill has turned into a $6,000.00 bill - $450.00 plus $5,500 in "fees". This is the first knowledge that family member has received of the unpaid tax bill.

Backstory: Family member was married and legally separated, pending divorce during the period in question. Apparently, the soon-to-be ex spouse filed a joint return. Family member had zero knowledge of this until the mailed notice arrives.

As best I can tell (from IRS website), the only recourse the FM has here is claiming no knowledge of the joint return.

So, there's the basics. Any advice/knowledge from the Pelican clan would be most appreciated.

Semper Gumby.

Sam

[legion]

I recommend removing all of the toilets from his house. That seems to work pretty well.

[Zeke]

A joint return requires both signatures. I'd start there.

[KFC911]

They need to contact the IRS directly and immediately... not some 3rd party collection agency. Pay what they owed and get the fines waived. I'm worth every penny I charge for my free advice.

They owe me a hundred bucks

[wdfifteen]

Sounds fishy.
Seven years with no notice, now $4500 in fees?
The IRS charges interest and a penalty on unpaid taxes, not "fees." The IRS notice will itemize your bill - tax + interest + penalty.
Unless they've changed their methods in the past 2 years, the IRS threatens to seize your property after giving notice you owe them money. Ive never heard of them using a collection agency.
The IRS is wayyy behind right now. You have time to investigate this. Write to them, their notices include instructions on how to dispute a bill. Dispute it, say you didn't sign a joint return and never knew about the tax. If this is real you will get a letter in a few weeks saying they need 90 days to consider your dispute (used to be 60 before Covid).
Without having seen the paperwork I suspect this is a scam.

Good luck contacting the IRS. They haven't been answering their phones for civilians for months. You can contact your senators and congressmen to light a fire under them, but that's still slow these days.

[rfuerst911sc]

Originally Posted by Zeke

A joint return requires both signatures. I'd start there.

100 % agree with this advice........... game/set/match if signature is not on the return OR if it was forged .

[jhynesrockmtn]

Get a good tax accountant involved. If truly legally separated during the whole tax year in question the former spouse should not have been able to legally file a joint return. Did your family member file their own return for that tax year? The whole collection agency language seems fishy.

[berettafan]

In 20+ years of public accounting i've learned to not take on clients who say 'i had no idea i owed this, never got any notices'.

Your guy didn't file a return that year at all? Why not?

That said there is most certainly an issue with a joint return that did not have both signatures.

Also be aware the IRS has 10 years to collect once assessed.

[stevej37]

Maybe the notices were mailed to the ex-spouse...which were conveniently misplaced.

[ErVikingo]

Originally Posted by berettafan

In 20+ years of public accounting i've learned to not take on clients who say 'i had no idea i owed this, never got any notices'.

Your guy didn't file a return that year at all? Why not?

That said there is most certainly an issue with a joint return that did not have both signatures.

Also be aware the IRS has 10 years to collect once assessed.

as a fellow CPA I concur.

Come out clean, get a tax consultant. From what I have seen, most fees/interest are negotiable. Good luck

[Bob Kontak]

Originally Posted by rfuerst911sc

100 % agree with this advice........... game/set/match if signature is not on the return OR if it was forged .

I agree if your family member filed a married/filing separately return for that year and a joint return was not signed by her/him.

[GH85Carrera]

Step one, go hire a CPA.
Step two, follow his advice.
Step three, pay the CPA for his work.

[DWBOX2000]

As a CPA, I would just call the IRS first. No need to start paying someone for something that could be a simple error or scam.

[Mike80911]

Originally Posted by DWBOX2000

As a CPA, I would just call the IRS first. No need to start paying someone for something that could be a simple error or scam.

I agree with this. I had an issue with a IRA roll over that was done incorrectly and called the IRS to try to correct the issue. The woman was actually very helpful and we got the issue resolved and I did not have to pay the penalties.

[pmax]

Collection agency extorting money from you ?

I would hire a lawyer. Do not deal with them or even contact them until you do.

[MRM]

Unless there is a lot more to the story, it is a scam. Here's a link that explains the IRS private collections process.

https://www.jacksonhewitt.com/tax-help/tax-tips-topics/back-taxes/what-happens-if-the-irs-sends-you-to-collections/

Calling the IRS directly should resolve the matter.

Also, a private contractor working legitimately for the IRS will not ask for payment to be made to the collections agency. The taxpayer will be told to make payments directly to the IRS.

https://www.consumerreports.org/consumerist/the-irs-is-now-using-private-debt-collectors-heres-what-you-need-to-know/

From the link:

In fact, taxpayers won’t even be asked to pay the private debt collectors.
Instead, these collectors will provide information about electronic payment options for taxpayers on IRS.gov/Pay.
Any payment by check should be payable to the U.S. Treasury and sent directly to IRS, not to the private collection agency, the IRS notes.

[MBAtarga]

When I read the OP and "collection agency" was mentioned - I thought SCAM.

[pmax]

I don't think it's a SCAM but they are SCUM for sure.

Do everything thru a lawyer or the extortion "fees" will keep increasing.

[wdfifteen]

Originally Posted by DWBOX2000

As a CPA, I would just call the IRS first. No need to start paying someone for something that could be a simple error or scam.

I agree, don't go straight to an "expert." After my CPA and a tax attorney told me to just send them a check, I was able to get a judgment in my favor on my own. I succeeded by sending multiple letters and dozens of pages of explanations and records, and I succeeded where the two "experts" who charged me over $1000 accomplished nothing (other than telling me to forget it and pay up). I guess they just didn't want to put in the time, or maybe it was their assumption that a mere taxpayer could not actually have a legitimate complaint (see comments by Berettafan and Erikingo above).

https://forums.pelicanparts.com/off-topic-discussions/1045597-i-fought-law.html

Unfortunately, calling the IRS was, for me, an exercise in futility. If you get to talk to them at all, call at 8:00 AM on Monday. Otherwise, forget it. I succeeded by writing to them - a lot - and be patient (it takes forever for them to respond - like 60 to 90 days).

In my multiple run-ins with the IRS they never mentioned a collection agency.

[gtc]

My girlfriend just had something very similar happen this year. The IRS withheld her 2019 refund, claiming they did not have her tax return from ~2013.

Turns out she had filed jointly with her husband at the time, and the IRS had somehow not associated this return that he filed with her current IRS account. It was never made clear why this took so long to come up - they divorced in 2015 or so.

Resolving the issue was complicated by the fact that he now lives in Romania, but eventually she was able to get someone at the IRS to link their joint return to her current account.

Before you call the IRS, make sure you have the full copies of the tax returns in question... they will quiz you on much of it for "verification." She had a copy downloaded from turbotax which didn't show the direct deposit account numbers, and this was a sticking point with the first IRS lady she talked to.