Tax Law (Questions About Taxes)/Tax lien.



I will be 74 in February. I have been drawing $1073 a month SS plus $644 for a 22 month old child. I accidentally got stranded in the Philippines in 2005 and here I reside with my Filipino wife and our son.

I have not worked since 2005 in the states. This November my check was minus $162. SS told me that a levy had been implemented on my SS. I contacted the IRS and proceeded to answer the various questions from the representative. However, when the question came as to what was the name of my bank I hung up. I gave my address and telephone number here in the Philippines. I was not contacted by the IRS before the levy was implemented, but it occurred to me that they had no idea where I have been residing since Honolulu in 1995 when I filed taxes for 1994.

My concerns are numerous. 1.I do not know what reason the levy is in force. 2.I have not filed taxes for years in 1995-2005. 3-4 of those years I was self employed. Also, I have not filed taxes since arriving in the Philippines, but my income has been solely SS. 3.I wonder what kind of a fishing expedition the levy and my call might have instigated. 4.How much more of my income can they extract from my SS. Can they take all of my monthly income. Without my income we die here in this country, there are no life sustaining social networks available. None.

I have no assets, no car, home, savings, stock, nothing but my SS for income. From my $1717 monthly income $260 is deducted by my ex wife as per divorce decree for support of our son who is in college. Living in the Philippines is somewhat more reasonable then in the states, but with very frugal measures in tact we barely get by. I have managed to save a few hundred dollars in hopes of being able to return state side for medical treatment with the aid of my Medicare. I was told in 2005 I would need a knee replacement in time. The time is now here as I can barely walk because of the pain and other circulatory problems that have affected my leg. Also, I need secondary cataract surgery as I can barely see from one eye and the other one is failing as well.

My question is what in the world can I do with my IRS problems. Your advice will be much appreciated.



ANSWER: Dennis,

I will answer your questions in the order you asked them:

1. The IRS likely filed a Substitute for Return or SFR based on income information they have for years that you did not file -or- you owed taxes on years that you did file.

2. During 1995-2005, it is likely that while self employed, one or more of your customers sent the IRS a Form 1099-MISC indicating how much income they paid you. That would be the information they use to create the "SFR".

3. The IRS always asks what bank you use for a "levy source". They want to know where else they can attach any assets you have.

4. They can take only 15% of your social security benefits but they will do so until the tax interest and penalties are paid.

You sound like a good candidate for an Offer in Compromise. But you would have to file the actual returns first.

Take care,

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


Thank you kindly for answering my questions. If I may I would like to question you further.

What is my best approach in filing my back taxes and requesting an Offer in Compromise. Is contacting the IRS on my own advisable or should I get professional help. Is this a matter that the IRS Tax Advocate would help me with in my circumstances and are they as concerned over my welfare as an outside professional would be.

Also, I am wondering that since I gave the IRS my mailing address in the Philippines, will they mail me any pertinent information regarding my situation.

Once again I thank you for your help. Your kindness is very much appreciated.




I do not know if the IRS will mail information to you in the Philippines or not. If you were self employed, the best way for you to file your tax returns is to reconstruct your income and expenses from your bank statements and mail the returns to the IRS. They will generally not consider an OIC under the returns are filed. It is OK to mark the figures on the returns as estimated as long as you include a statement stating how the income and expenses were reconstructed.

The Taxpayer advocate will generally not help you until you have exhausted all other IRS channels.

You should call the IRS and ask them which years the levies are for. Also ask which years they are not showing returns being filed for. They can send you the payer information for the past 6 years however being overseas makes it difficult - like I said I do not know if they will mail overseas or not. You need to ask them.

I would think a professional is advisable in this case, especially with you being overseas.

Take care,  

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Bruce W. Tyler, EA


I can answer questions with regard to the following: Preparation/Tax Law regarding Individual Income Tax (IRS and California), Audit Representation/IRS Procedures of personal and corporate income tax including appeals, IRS Collection procedures for individuals, partnerships and corporations, Offers-in-Compromise, Installment Payment Plans, Penalty Abatement,Income from Cancellation of Debt. Heavy experience with Public Safety (i.e. Firefighters, Police Officers, Correctional Officers, etc) as well as medical industry.


21 years in tax preparation and representation

National Association of Enrolled Agents

4 years of accounting at Woodbury University/UCLA Extension

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