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Old 02-06-2012, 03:28 PM
robert_columbia robert_columbia is offline
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Where do IRS nightmares come from?

If TV commercials here in the US have taught me anything, it's that there are lots of people out there in TV land that are destitute but owe big bucks to the Internal Revenue Service (Federal tax agency), ripe pickings for tax settlement companies that are more than willing to step in and help you negotiate your back taxes for pennies on the dollar. Where do these nightmares generally come from?

Considering my personal experiences, it seems difficult to understand how Joe Timeclock, subject as he is to mandatory withholding of a major portion of his paycheck before he even gets his hands on it, is going to be able to reasonably get himself that much in the hole such that by filing time, his tax owed is greatly above the amount that was withheld.

Where do these nightmares come from? Are these from 80 year olds who sell their house of 50 years (capital gains $$$$$) and then blow all the money in Vegas only to realize in horror that they can't deduct all their gambling losses and they accidentally spent the money they needed to pay tax?
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Old 02-06-2012, 03:35 PM
just_some_guy5 just_some_guy5 is offline
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I believe independent contractors are a pretty common IRS target - since they're often paid on a pre-tax basis and the onus is on them to report everything to the IRS.

I suspect there's also a good deal of small-business owners who run into similar issues.
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Old 02-06-2012, 03:53 PM
dracoi dracoi is offline
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Business owners and independent contractors are MUCH more likely to be the ones with problems. If you take a person making $30,000 salary, it's likely that $10,000 was withheld for income and payroll taxes. A self-employed person who makes $30,000 net income has to pay that $10,000 himself - and most don't.

Then you have the problem that they can (and do) put off filing for years. So take that 10,000. Add 25% (late filing penalties). Add 12% (estimated interest and late paying penalties). Multiply by 3 years of doing this. Now this schmuck owes $40,000.

Of course, it isn't just the self-employed. Let's say you take $100,000 out of your 401k and have NO taxes withheld. 10% penalty. 25% income tax. You owe $35,000 more in taxes than you're used to. And when you figure that out, you freak out and decide to bury your head in the sand. Fine with the IRS - they have 3 years to audit you, and they'll wait 2.5 years before sending a letter asking you why you never filed. So 25% penalties. 12% interest. Now you owe $48,000 in back taxes.

These are the two most common scenarios in my practice.

By the way, those commercials are highly misleading. Some of the "pennies-on-the-dollar" settlements simply result from correctly filing a return that the taxpayer hasn't ever filed (and therefore, finally claiming expenses and deductions that the IRS didn't know about until the filing happened).
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Old 02-06-2012, 04:08 PM
Rigamarole Rigamarole is offline
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Originally Posted by dracoi View Post
Business owners and independent contractors are MUCH more likely to be the ones with problems. If you take a person making $30,000 salary, it's likely that $10,000 was withheld for income and payroll taxes. A self-employed person who makes $30,000 net income has to pay that $10,000 himself - and most don't.
I realize that was meant to be a rounded estimate and is sort of inconsequential, but your figures are way, way off. Assuming most basic possible case (person is single, no kids, and taking the standard deduction + personal exemption) a salary of $30k (regular worker, not IC) would equate to a federal income tax burden of $2,661. Their employer will withhold a little more, so maybe $3k or so.

Last edited by Rigamarole; 02-06-2012 at 04:09 PM.
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Old 02-06-2012, 04:20 PM
drachillix drachillix is offline
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Originally Posted by dracoi View Post
Business owners and independent contractors are MUCH more likely to be the ones with problems.
My business grossed around $120K last year. Problem is, the vast majority of that did not go into my pocket, (more like $20K) but if I fail to file for some reason or screw it up royally, there could easily be $20K-$30K in taxes due between state and federal + penalties + interest.
  #6  
Old 02-06-2012, 04:27 PM
Ludovic Ludovic is online now
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Originally Posted by Rigamarole View Post
Assuming most basic possible case (person is single, no kids, and taking the standard deduction + personal exemption) a salary of $30k (regular worker, not IC) would equate to a federal income tax burden of $2,661. Their employer will withhold a little more, so maybe $3k or so.
But when you do assume an IC, they have to withhold even more for the employer portion of the payroll tax, so it would be around $5K, which granted is still not very close to $10K.
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Old 02-06-2012, 04:34 PM
Dallas Jones Dallas Jones is offline
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Originally Posted by robert_columbia View Post
Considering my personal experiences, it seems difficult to understand how Joe Timeclock, subject as he is to mandatory withholding of a major portion of his paycheck before he even gets his hands on it, is going to be able to reasonably get himself that much in the hole such that by filing time, his tax owed is greatly above the amount that was withheld.
The W-4 form that an employee fills out to determine how much tax should be withheld from Joe's paycheck is not sent to the IRS, and even the employer does not control what the employee enters for deductions. This is just a tool to help the worker determine if enough tax is being withheld to cover the end of year tax filing.

An unmarried person who has no other deductions should claim one dependant on his W-4. He can claim zero deductions and have tax over-withheld, he can claim nine deductions (I think that is the max) and have no taxes withheld.

Some employers make it very easy to change your W-4. Many of the Joe Timeclocks at my wife's job routinely change to 9 deductions for pay periods where they have worked a lot of overtime to keep from losing a big chunk in taxes, then they change back to their regular deductions.

This is foolish, but is often done. In spite of the statement in the OP, there really isn't any mandatory withholding of a major part of the pacheck.

http://en.wikipedia.org/wiki/Tax_for...ted_States#W-4

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The Form W-4 is used by employers to determine the correct amount of tax withholding to deduct from employees' wages. The form is not mailed to the IRS, but rather retained by the employer. Tax withholdings depend on employee's personal situation and ideally should be equal to the annual tax due on the Form 1040. When filling out a Form W-4, an employee calculates the number of Form W-4 allowances he or she will claim, based on his or her expected tax filing situation for the year. For each Form W-4 allowance taken, the amount of money withheld as federal income tax is reduced.
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Old 02-06-2012, 05:47 PM
dracoi dracoi is offline
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Originally Posted by Rigamarole View Post
I realize that was meant to be a rounded estimate and is sort of inconsequential, but your figures are way, way off. Assuming most basic possible case (person is single, no kids, and taking the standard deduction + personal exemption) a salary of $30k (regular worker, not IC) would equate to a federal income tax burden of $2,661. Their employer will withhold a little more, so maybe $3k or so.
Yeah, it was meant to be rounded. But you are missing the FICA tax component.

In the employee scenario, 7.65% would be withheld from pay, and 7.65% would be paid by the employer, for $4590 in additional taxes. In the independent contractor scenario, they pay both amounts.

So total tax due on the 1040 is more like $7,200 for this independent contractor, which is certainly closer to the $10,000.
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Old 02-06-2012, 06:03 PM
TriPolar TriPolar is online now
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I don't want to recount my own IRS disaster story right now, but sometimes IRS employees steal tax money paid, and many other IRS employees will cooperate in a cover-up of the theft. I came out of it OK, losing only $10,000, which seemed to be the minimum cost of engaging a tax lawyer to fight it. Only after paying them off was I able to find out the circumstances in which the money was stolen, and to my knowledge there have never been any prosecutions.
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Old 02-06-2012, 07:13 PM
OldGuy OldGuy is offline
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Originally Posted by TriPolar View Post
I don't want to recount my own IRS disaster story right now, but sometimes IRS employees steal tax money paid, and many other IRS employees will cooperate in a cover-up of the theft. I came out of it OK, losing only $10,000, which seemed to be the minimum cost of engaging a tax lawyer to fight it. Only after paying them off was I able to find out the circumstances in which the money was stolen, and to my knowledge there have never been any prosecutions.
Did you pay your taxes with cash? Otherwise I'd think you had a canceled check or credit card proof you paid.
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Old 02-06-2012, 07:25 PM
drachillix drachillix is offline
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This is foolish, but is often done. In spite of the statement in the OP, there really isn't any mandatory withholding of a major part of the pacheck
I was trying to "beat the system" cut back on my witholding, sock it into savings and pay the taxes from the savings accounts. It takes discipline I didnt have at the time.
  #12  
Old 02-06-2012, 07:35 PM
TriPolar TriPolar is online now
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Did you pay your taxes with cash? Otherwise I'd think you had a canceled check or credit card proof you paid.
I had checks, and letters from the IRS saying I had paid. But the funds were stolen and never recorded on the tax rolls. These were FICA taxes from a business I owned, and those can't be discharged by the IRS. They had to make up the money somehow, and I was a vulnerable target. I'm sure many others were ripped off as well. As I said, there was a major coverup of the illegal activity, and it was not an isolated case.

Last edited by TriPolar; 02-06-2012 at 07:35 PM.
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Old 02-06-2012, 07:45 PM
Joey P Joey P is offline
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The W-4 form that an employee fills out to determine how much tax should be withheld from Joe's paycheck is not sent to the IRS, and even the employer does not control what the employee enters for deductions. This is just a tool to help the worker determine if enough tax is being withheld to cover the end of year tax filing.

An unmarried person who has no other deductions should claim one dependant on his W-4. He can claim zero deductions and have tax over-withheld, he can claim nine deductions (I think that is the max) and have no taxes withheld.

Some employers make it very easy to change your W-4. Many of the Joe Timeclocks at my wife's job routinely change to 9 deductions for pay periods where they have worked a lot of overtime to keep from losing a big chunk in taxes, then they change back to their regular deductions.
This is a good example for the OP.
A real world example is the bone headed mistake I made this year. I'm not claiming my daughter and forgot to change my deductions from 2 to 1 (or whatever I had it set to to whatever I had it set to minus 1). Luckily it's not a big deal since I A)socked away a ton of money into savings and B)have a mortgage so all the deductible interest keeps my refund pretty high in spite of what I might owe the government (IOW, I always get a refund). Either way, I was pretty surprised to see that I owed (for the first time ever) this year until I put my 1098 from my mortgage in. It took me a while of starting at my tax forms to realize that I never changed my deductions.

Also, not that it matters, but I'm one of those employers that make it easy to change your deductions. You can change it 30 times a year if you want to, all I have to do is go into QuickBooks and change one number. I usually ask you to fill out and sign a new Form W-4 and WT-4 (Wisconsin's version of the W-4). But only because I've had people (or rather, people's accountants) call me up and ask why I changed their deduction or put in odd numbers. It's nice to be able to pull out that form and 'remind' them that I didn't randomly change it, I did it at their request...the fallout from that is their problem, not mine.

Also, to get back to the OP, another way you can find yourself in the hole is doing 1099 work. Especially if you don't realize you're doing it. That can happen in a few ways...
A)You did a few odd jobs for a business owner for what you thought was cash under the table then at the end of the year he sends you a 1099.
B)You did a few odd jobs for a business owner, got paid by check and just assumed he was paying you like a regular employee and was taking taxes out...but he wasn't (which can sometimes just be a miscommunication, but that's not the point)

Also, sometimes it's just plain irresponsibility. You're really bad with money, you take a 2nd or 3rd job and because you need the money so bad you ask if you can be a 1099er...the employer decided to do it (right or wrong, not the point). Since you need the money, you spend it all right away and at the end of the year, of the 10K you made, you suddenly have to cough up 3K which you don't have. What you should have done was put 30% of each check away, but if you could have done that, you might as well have just been a regular employee.
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Old 02-06-2012, 08:29 PM
mhendo mhendo is offline
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I had checks, and letters from the IRS saying I had paid. But the funds were stolen and never recorded on the tax rolls. These were FICA taxes from a business I owned, and those can't be discharged by the IRS. They had to make up the money somehow, and I was a vulnerable target. I'm sure many others were ripped off as well. As I said, there was a major coverup of the illegal activity, and it was not an isolated case.
To be honest, i have a lot of trouble believing this.

Any evidence you can point to regarding such illegal activity, and subsequent coverup?
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Old 02-06-2012, 08:40 PM
TriPolar TriPolar is online now
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To be honest, i have a lot of trouble believing this.

Any evidence you can point to regarding such illegal activity, and subsequent coverup?
Look it up yourself. I don't feel like reliving this experience. You'll find there were congressional investigations into this kind of activity.
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Old 02-06-2012, 08:52 PM
TriPolar TriPolar is online now
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To be honest, i have a lot of trouble believing this.

Any evidence you can point to regarding such illegal activity, and subsequent coverup?
Sorry, I was rude in responding. This is a sensitive subject for me. I don't want to go through it all, but here's one website that documents recent cases. Mine started in 1984. They refence the US Treasury site where you can find more details.
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Old 02-06-2012, 09:38 PM
Jamicat Jamicat is offline
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I haven't filed for 4 years and I claim 0 on W2...

I pay 10k per year Tax...

Will they give me my overage or just "Fine's" it all away, back to them?
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Old 02-06-2012, 10:01 PM
DrDeth DrDeth is offline
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I haven't filed for 4 years and I claim 0 on W2...

I pay 10k per year Tax...

Will they give me my overage or just "Fine's" it all away, back to them?
By "I claim 0 on W2" do you mean no with holding exemptions or you have nothing withheld?

In any case go hire a competent Tax Pro now. CPA or Enrolled Agent.

The IRS is likely the cleanest agency in the government. Mind you, of course it has (like any other civil service) a bunch of dudes putting in minimum work, waiting for retirement, but actually likely less than most agencies.

Although I could certainly believe some IRS agent accidentally losing a payment, stealing it would be nearly unheard of. They don't call those guys "the Untouchables" for nothing. Uncaring bureaucrats? Sure. Crooks, no.

But as has been said here, most dues that end up owning the iRS big bux are either self-employed, or a business that is stealing the withholding (aka Payroll taxes) from their employees. The IRS really doesn't like this.
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Old 02-06-2012, 10:08 PM
TriPolar TriPolar is online now
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The IRS is likely the cleanest agency in the government. Mind you, of course it has (like any other civil service) a bunch of dudes putting in minimum work, waiting for retirement, but actually likely less than most agencies.
Are you joking?! Here's another cite.

Last edited by TriPolar; 02-06-2012 at 10:09 PM.
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Old 02-06-2012, 10:17 PM
DrDeth DrDeth is offline
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Are you joking?! Here's another cite.
1991? That's the best you can come up with? The IRS has 60000 employees, far more than any other similar agency.

Look, any agency has a few bad apples, but compared to others, the IRS is known to be squeaky clean. A few articles about a few arrests mean nothing, no one there's never been a crooked agent, it's just that compared to other agencies the IRS is pretty damn clean.
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Old 02-06-2012, 10:27 PM
TriPolar TriPolar is online now
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Here's another one. You can look at my previous cite for a list of incidents in the past 10 years. You will not find credible evidence that the IRS is a clean organization. Look at the TIGTA site. Why do you think congress had to establish this agency?

Last edited by TriPolar; 02-06-2012 at 10:28 PM.
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Old 02-06-2012, 10:41 PM
DrDeth DrDeth is offline
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Here's another one. You can look at my previous cite for a list of incidents in the past 10 years. You will not find credible evidence that the IRS is a clean organization. Look at the TIGTA site. Why do you think congress had to establish this agency?
TIGTA is just the old IRS Inspection service, aka Internal affairs. Every cop shop has one. The FBI, Secret Service, your local PD, etc.

Congress renamed it and made a big deal out of it to make people believe Congress is 'doing something". I'd trust a IRS agent long before I'd trust a Congressman.
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Old 02-06-2012, 10:43 PM
TriPolar TriPolar is online now
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Here's just an introduction to someone who blew the whistle on their illegal activities. The 1997 congressional investigation uncovered numerous abuses and criminal activities within the IRS. I'm biased because I was the target of their corruption, but the current list of complaints against the IRS does not convince me these kind of activities have stopped.
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Old 02-06-2012, 10:45 PM
TriPolar TriPolar is online now
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TIGTA is just the old IRS Inspection service, aka Internal affairs. Every cop shop has one. The FBI, Secret Service, your local PD, etc.

Congress renamed it and made a big deal out of it to make people believe Congress is 'doing something". I'd trust a IRS agent long before I'd trust a Congressman.
Show me any cite that the IRS is considered a clean agency. That IRS agents are considered "Untouchable".
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Old 02-07-2012, 12:52 AM
dracoi dracoi is offline
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1991? That's the best you can come up with? The IRS has 60000 employees, far more than any other similar agency.

Look, any agency has a few bad apples, but compared to others, the IRS is known to be squeaky clean. A few articles about a few arrests mean nothing, no one there's never been a crooked agent, it's just that compared to other agencies the IRS is pretty damn clean.
In 1991, the IRS had closer to twice that many employees. Cite That makes a few bad apples even less significant.

And I would agree that the IRS is about the cleanest any government agency is going to get. Now if they could only get their employees to read the publications...
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Old 02-07-2012, 12:54 AM
drachillix drachillix is offline
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November 23, 2004
IRS employee was arrested for possession of child pornography on IRS computers.


The timing sounds right, if so, this guy was in my moms unit in the Fresno Service center. He was also cited for a slough of other little things in that he paid for his postage mail ordering the porn via IRS postal meters and copied order forms on copiers that tag every photocopy for tracking purposes.

Just a sidenote to Tripolar.

In the grand scheme of things, they are pretty damn clean. Take a long hard look at anyplace with this size of workforce and you get tons of games being played. Passive security like copiers and printers that watermark everything are everywhere. Restrictions on electronics in some areas and the simple fact that anything you do wrong is going to be a federal crime that will land you in prison several states away.

My sister also works for the IRS in IT, systems are constantly audited and things like people firing up their own little wireless networks to share unfiltered internet are found and shut down quickly. It often takes some serious creativity to defeat the system.


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Old 02-07-2012, 03:29 AM
Senegoid Senegoid is online now
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Originally Posted by DrDeth View Post
1991? That's the best you can come up with? The IRS has 60000 employees, far more than any other similar agency.

Look, any agency has a few bad apples, but compared to others, the IRS is known to be squeaky clean. A few articles about a few arrests mean nothing, no one there's never been a crooked agent, it's just that compared to other agencies the IRS is pretty damn clean.
Okay, any business, big or small, public or private, and make blunders or have some bad apples.

The real evilness of bureaucracies, which seems proportional to the size of the bureaucracy, is their unwillingness or inability to correct the blunders that do happen. Look, I had a little dispute with the phone company last year -- these things happen -- but it took me two dozen phone calls to get it cleared up. Now look at all the horror stories about health insurance companies and big banks and foreclosures. Setting aside the allegations of deliberate evil they do, even the evils that seem to be just mistakes tend to be monstrously difficult to get fixed.

Now scale that up to the size of the IRS, which tends to work on the basis that the taxpayer is guilty until he proves himself innocent mostly. They have their rules rigged that way. TriPolar's biggest complaint here is not that one crooked agent stole his money -- the big phuck-up here is that he got stuck with the loss, and had to fight it at his own expense, and even all the cancelled checks and bank statements in the world don't seem to count for shit when it's the IRS at the other end of the line.

That lady in the L. A. Times article was prosecuted for stealing from the U. S. Government, but it looks like it was the taxpayers whose checks were stolen who lost. The article says the culprit may have to make restitution to those taxpayers. Did that ever happen? The IRS ought to make restutition to the taxpayers and the thief should make restitution (if she can) to the IRS.

It's things like that, that make the IRS look like such a big crooked organization.
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Old 02-07-2012, 07:50 AM
Hermitian Hermitian is offline
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I'd trust a IRS agent long before I'd trust a Congressman.
*Snort*

When Congress is used as a yardstick for trustworthiness, you know things are not looking good.
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Old 02-07-2012, 10:08 AM
drachillix drachillix is offline
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That IRS agents are considered "Untouchable".
Directly suing one is pretty much impossible, but they get fired for doing stupid shit all the time. Just in one service center its not unusual to see dozens of people a year getting fired doing things like simply accessing/viewing records that they are not assigned (taking a peek at their favorite movie stars tax return and such). They go to great lengths to "police their own" as well as having FBI and or Secret service folks assigned to the service center as part of their own internal investigations groups who do not answer to the IRS chain of command.

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Originally Posted by DrDeth
I'd trust a IRS agent long before I'd trust a Congressman.
Amusingly enough one of the best ways to light a fire under the IRS is to contact your congressman. If you can get your congressman to take interest the IRS has 72 hours to respond to his/her questions.
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Old 02-07-2012, 10:30 AM
TriPolar TriPolar is online now
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First off, I've admitted my bias here, and made clear the reason. My original message was simply that all tax disasters are not created by delinquent taxpayers.

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Originally Posted by Senegoid View Post
Now scale that up to the size of the IRS, which tends to work on the basis that the taxpayer is guilty until he proves himself innocent mostly. They have their rules rigged that way. TriPolar's biggest complaint here is not that one crooked agent stole his money -- the big phuck-up here is that he got stuck with the loss, and had to fight it at his own expense, and even all the cancelled checks and bank statements in the world don't seem to count for shit when it's the IRS at the other end of the line.

That lady in the L. A. Times article was prosecuted for stealing from the U. S. Government, but it looks like it was the taxpayers whose checks were stolen who lost. The article says the culprit may have to make restitution to those taxpayers. Did that ever happen? The IRS ought to make restutition to the taxpayers and the thief should make restitution (if she can) to the IRS.

It's things like that, that make the IRS look like such a big crooked organization.
That pretty much covers it.

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Originally Posted by drachillix View Post
Directly suing one is pretty much impossible, but they get fired for doing stupid shit all the time. Just in one service center its not unusual to see dozens of people a year getting fired doing things like simply accessing/viewing records that they are not assigned (taking a peek at their favorite movie stars tax return and such). They go to great lengths to "police their own" as well as having FBI and or Secret service folks assigned to the service center as part of their own internal investigations groups who do not answer to the IRS chain of command.
I'm not condemning everyone who works at the IRS (even though I want to). But the IT group is not the problem. It's easy to keep an eye on them. The problem are the agents out in the field who collect the money directly. Don't ever write IRS on a check, agents have started businesses named things like FIRST WIDGET COMPANY, and the payee gets magically transformed. If you give them cash, you can kiss it all goodbye if the agent is dishonest.

My case was horrendous because it involved FICA taxes. It takes an act of congress to discharge those. Otherwise, the money must come from somewhere, and if it isn't collected from taxpayers, it will come from IRS employees, along with some rolling heads. And those heads are unlikely to be at the top. This makes otherwise honest employees cooperate in the coverup and the theft.

BTW: I was saved from an even worse situation by an IRS agent. A top level guy came up from Manhattan to help finalize the deal so I could put an end to it. I suppose he was safe in his position, and maybe near retirement, and not worried about repercussions. Had this been an ordinary business situation I would have sent a letter to his boss commending him. In this case I was afraid he might suffer if I did so.
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Old 02-07-2012, 10:42 AM
purplehorseshoe purplehorseshoe is offline
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Who the fuck pays taxes in cash? I don't even know how one would go about that ... stuffing a wad of twenties into an envelope? Really? Not to mention ... WHY would you do that?
  #32  
Old 02-07-2012, 10:58 AM
TriPolar TriPolar is online now
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Who the fuck pays taxes in cash? I don't even know how one would go about that ... stuffing a wad of twenties into an envelope? Really? Not to mention ... WHY would you do that?
Poor people have tax problems too. It's often what makes them poor. And they are common targets since they can't afford to fight back. Imagine an IRS agent showing up on your doorstep every Friday evening to try and take the meager pay you collected for the week. They tried this nonsense on me, but I laughed at them. I had a subchapter S set up by that point, only paid myself through it. Your average minimum wager won't have the means to go that route.

Last edited by TriPolar; 02-07-2012 at 11:00 AM.
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Old 02-07-2012, 12:47 PM
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Quote:
Originally Posted by Jamicat View Post
I haven't filed for 4 years and I claim 0 on W2...

I pay 10k per year Tax...

Will they give me my overage or just "Fine's" it all away, back to them?
Sooner or later they're going to compare their records, notice that you never filed, but had earned income.

This could go two ways: They'll make assumptions about other income and say you were shortchanging them and make you cough up the money, or they'll do the number crunching, decide you may have actually been due some money back, but too bad so sad, you won't get it without asking for it.

You have, IIRC, something like 3 years to file or you can't get your money back.
  #34  
Old 02-07-2012, 01:31 PM
drachillix drachillix is offline
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Originally Posted by TriPolar View Post
Poor people have tax problems too. It's often what makes them poor. And they are common targets since they can't afford to fight back. Imagine an IRS agent showing up on your doorstep every Friday evening to try and take the meager pay you collected for the week. They tried this nonsense on me, but I laughed at them. I had a subchapter S set up by that point, only paid myself through it. Your average minimum wager won't have the means to go that route.
Only time I saw something where the business got doorstopped like that was I worked for a pizza franchise and the franchise owner had not been depositing payroll taxes, witholding, sales taxes, nothing, then skipped town, it took them three months to get to that point and that was for several hundred thousand dollars. (13 pizza places worth)
  #35  
Old 02-07-2012, 01:49 PM
dracoi dracoi is offline
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Quote:
Originally Posted by TriPolar View Post
Poor people have tax problems too. It's often what makes them poor. And they are common targets since they can't afford to fight back. Imagine an IRS agent showing up on your doorstep every Friday evening to try and take the meager pay you collected for the week. They tried this nonsense on me, but I laughed at them. I had a subchapter S set up by that point, only paid myself through it. Your average minimum wager won't have the means to go that route.
However, you can get a money order very cheaply. I know that the Post Office has offered them for as little as $0.50, though I don't keep up on the current rates.

And any IRS agent showing up at your doorstep means things have gone way off the tracks already. Time to get someone qualified to practice before the IRS (such as a CPA) and have that person start dealing with the agent. Or at least contact the IRS's Taxpayer Advocate Service, which is a free service available to any taxpayer with a problem.
  #36  
Old 02-07-2012, 01:50 PM
drachillix drachillix is offline
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Quote:
Originally Posted by TriPolar View Post
Poor people have tax problems too. It's often what makes them poor. And they are common targets since they can't afford to fight back. Imagine an IRS agent showing up on your doorstep every Friday evening to try and take the meager pay you collected for the week. They tried this nonsense on me, but I laughed at them. I had a subchapter S set up by that point, only paid myself through it. Your average minimum wager won't have the means to go that route.
Get a money order. One of the utter shit jobs at the IRS is working in the mail room. Entry level GS1 nobodys, under a casino worth of cameras. They hate it as they run into tons of cash and it is a huge pain and any discrepancy can cause you problems. Not to mention dealing with the people that send fake bombs, $2348.94 in pennies, and envelopes full of baking soda. IF you want someone who hates their barely over minimum wage job and occasionally has the chance to scoop up some cash that is a huge problem area.
  #37  
Old 02-07-2012, 02:20 PM
TriPolar TriPolar is online now
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Quote:
Originally Posted by dracoi View Post
However, you can get a money order very cheaply. I know that the Post Office has offered them for as little as $0.50, though I don't keep up on the current rates.

And any IRS agent showing up at your doorstep means things have gone way off the tracks already. Time to get someone qualified to practice before the IRS (such as a CPA) and have that person start dealing with the agent. Or at least contact the IRS's Taxpayer Advocate Service, which is a free service available to any taxpayer with a problem.
I know how to deal with issue, but you have to consider the poor guy who doesn't. And if he's literally poor, hiring a CPA or lawyer isn't possible. Things don't have to go way off track either. They can do this to anyone who owes anything, and if the agent is dishonest, it's a good way to feather his pockets. Or in my case, the attempt was probably to save his job. And the Taxpayer Advocate Service, well I don't know, but I haven't heard good things, but that's just hearsay.
  #38  
Old 02-07-2012, 02:24 PM
Duke Duke is offline
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Not to derail the thread, but recently I saw a commercial by one of these lawyers which bragged of their success in fixing a client's $1.4 million tax debt. $1.4 mill? Seriously? How does anyone even get that kind of money without thinking, "Geez, maybe I better hire an accountant"?
  #39  
Old 02-07-2012, 02:38 PM
leahcim leahcim is offline
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In my first year of having a brokerage account I did my reporting wrong for that and the IRS thought I made $100000 more in capital gains than I actually did. I'd reported all profits that I made, but the brokerage reported to the IRS only what I'd sold the securities for, and the IRS assumed it was all profit because I didn't report the cost basis of those trades. Once I updated my return with that info, it all went away. It was my bad for not reporting something that I was supposed to, but it was an honest mistake and the IRS treated it as such.

I could see going to a lawyer instead and having them do the same thing, and then being able to advertise, "solved leahcim's $30000 (or whatever it was) tax nightmare!!!"
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