Expert: Consuelo Herrera, International Accountant and Fraud Examiner - 9/23/2008

Question
QUESTION: Hi Consuelo, you have nicely answered my previous question concerning my ss8 filing. Thank you for that. Now I have another question.

I finally got my decision letter and it is in my favor. IRS finds that I was an employee. Now what do I need to do? Will I get my money back that I had to pay penalties for that I shouldn't of had to pay? And will I be entitled to my California refund back now? (They took it out to go toward my taxes that I owed so I never saw a dime of it) My case is very confusing because I worked for a company for 3 years that contracted out with different companies every year I worked. I got a decision notice for 2007-2008 but I am still waiting to hear for the 2005-2006. They needed for info for the investigation and I sent it off Saturday. Should I call the rep? Do I need to amend my taxes? I am so confused. There are to many instruction for different categories that I don't know which I fall under. thanks again Tina

ANSWER: Dear Tina,

Good to hear that the IRS ruled on your behalf.

I would suggest that you contact the taxpayer advocate for further direction.

Please see the information below.

Who May Use The Taxpayer Advocate Service?
The Taxpayer Advocate Service is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. You may be eligible for Taxpayer Advocate Service assistance if:
•   You are experiencing economic harm or significant cost (including fees for professional representation),
•   You have experienced a delay of more than 30 days to resolve your tax issue, or
•   You have not received a response or resolution to the problem by the date that was promised by the IRS.
The service is free, confidential, tailored to meet your needs, and is available for businesses as well as individuals.  There is at least one Local Taxpayer Advocate in each state, as well as in Puerto Rico and the District of Columbia.  Because they are part of the IRS, Advocates know the tax system and how to navigate it.  If you qualify, you will receive personalized service from a knowledgeable Advocate who will:
•   Listen to your situation,
•   Help you understand what needs to be done to resolve it, and
•   Stay with you every step of the way until your problem is resolved.
Contact the Taxpayer Advocate Service.

http://www.irs.gov/advocate/index.html

http://www.irs.gov/advocate/content/0,,id=150972,00.html
Contact a Local Taxpayer Advocate
The Taxpayer Advocate Service is an independent organization within the IRS, headed by the National Taxpayer Advocate. Each state has at least one Local Taxpayer Advocate who is independent of the local IRS office and reports directly to the National Taxpayer Advocate.
Select your “State” on the Map below, and call the Taxpayer Advocate Service office nearest you.
If you want to authorize another person to discuss the matter or to receive information about your case, download Form 2848, Power of Attorney and Declaration of Representative. You may also download Form 2848 Instructions. Or, you may use Form 8821, Tax Information Authorization if you want another person to receive information about your case but not represent you. If you are unable to download and print these documents, you can get them at most local IRS offices or by calling the IRS forms-only number, 1-800-829-3676.

I wish the best in resolving these issues once and for all.

Sincerely,


Consuelo Herrera, CAMS, CFE

---------- FOLLOW-UP ----------

QUESTION: Sorry, but I have another question. Recently I received a surprising certified letter from IRS (Intent to Levy) for 2 checks of my payments that suppossively bounced one from july 1st and one from August 1st. I knew it wasnt true, so I called my bank and they verified it not to be true that IRS successively cashed those checks. Now I have penalties and interest tacked on to my debt (I never owed in the first place). I got copies of the checks from my bank and sent them to IRS to prove to them the checks did not bounce. What happens now? I think I should be reimbursed for the check copies as well. I have called IRS for followup but nobody seems to know anything. Any suggestions? (That debt should be paid off, but now they added those penalties and interest so the debt is up to 185.00. Its so unfair because I am already going through other issues with them and this puts icing on the cake. Thanks

Answer
Dear Tina,

Hope things get better in your relationship with the IRS.

Concerning this particular situation, did you send a letter to the IRS along with the copy of your checks? If you did not, you should follow up with a letter requesting a reimbursement of the payments made along with the penalties charges. Give enough details and back up documents so that they may make an informed decision right away.

It is important that when you ccommunicate with the IRS ensure that you know the agent's name and identification so that if you follow up with a letter you have substantiation for your claims.

File your correspondence with the IRS in a chronological order. Request a return receipt on every piece of mail you send the IRS. Keep copies of all your letters.

In addition, I would call a local law and tax firm who does not charge for a first consultation. They could give you valuable advice for free.

Finally, be calm and keep contacting the IRS and explain that you have been affected by this situation and you need their help to resolve this matter ASAP. They are interested in solving and or correcting situations where unintentional errors have been made, I hope this is your case.

Hope your dealings with the IRS turn around on your behalf.

Sincerely,


Consuelo Herrera, CAMS, CFE