“Yikes! I just
received a notice from the IRS...” Few
words strike fear in the hearts of a taxpayer more than hearing from the IRS!
I have been helping people deal with the IRS for over 25
years and I can tell you that I have never seen the IRS in more disarray than
they appear to be right now.
Here is one example.
In March of 2013, we electronically filed a return for one of our
clients who was to receive a large refund.
Normally, a taxpayer would receive their refund within two to four weeks
if it was to be directly deposited.
Instead, six weeks later our client received a notice saying that the
IRS was holding their refund until they could do a “review” of their tax
return, which would be completed by June of 2013. June came and went and no word was received
from the IRS, so the client decided to call the IRS and see what was holding up
their refund. They were told that no
further information was known about their return, but that they could continue
to call and check the status every two weeks. The client called every two weeks
and also asked our firm to be included on the calls. Finally in August after we had been told that
there was nothing further required of the taxpayer, and yet, no update could be
given, we decided to contact the Taxpayer Advocates office since the refund had
been held so long.
When we called the Taxpayer Advocate’s office, we were
told that another notice requesting additional information had been sent in
June. We asked to have it resent since
the taxpayer had not received it and we were informed that they could not do that,
but that it was a standard notice and could be found on the IRS website
indicating what additional information was required. The Taxpayer Advocate also told us that they
were unable to help us further, since they were restricted on the number of people
they could help and our client was not in enough of a “dire need” to be
included. But at least, we were given
some direction on action to take. We
were further told even after this additional information was sent that it would
take six to eight weeks for the IRS to address the information and release the
refund.
Of course, just when you think it couldn’t get any worse,
the government shutdown occurred. Many
of the IRS agents were furloughed, and all refunds were being held – yet
another reason for a refund delay. I
realize that they are holding large refunds due to identity theft and trying to
make sure it is a legitimate claim.
However, it appears that they are not really even dealing with the
situation, because by now, they should have been able to check the tax payments
and released the refund.
In conclusion, my words of wisdom would be if you receive
a notice from the IRS or any other government entity, don’t ignore it and hope
it will go away. You can respond to it
yourself or if you would feel more comfortable, share it with your CPA to be
sure it is a legitimate notice and if the notice says additional taxes are due,
make sure that you really owe them. And
of course, remember “patience is a virtue” and you are probably going to need a
lot of it when dealing with the IRS.
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