The IRS Goes After Grandma
Essex & Associates:: www.essexinc.biz March 21, 2011
So much for a "kinder, gentler IRS." That went out years ago.
The Internal Revenue Service continues to ramp up the number of tax liens and levies it files against taxpayers, including senior citizens.
The government agency filed liens against 1.1 million taxpayers last year, up from 168,000 in 1999. In the past seven years, it has filed more than 5 million tax liens.
By filing a lien against a taxpayer with no money and no assets, the IRS often collects nothing, yet it inflicts long-term harm on the taxpayer.
The IRS can garnish up to 15 percent of Social Security payments.
But the prospects of taking 15 percent of fixed income is overdoing it in most cases. For people on fixed incomes where every penny is spent on rent, food and utilities, this is a major problem.
And taxpayers often can't get the matter resolved by themselves.
The IRS has become more automated and, when documents don't match, accounts are flagged and notices are mailed to taxpayers about discrepancies.
Backup documentation may be needed to support a claim. But in half the cases, the error is with the IRS. The tax law is so complex that the agency's automated system doesn't always read returns correctly.
When grandma call the IRS, they typically speak with a customer service representative who is trained to respond to general questions. They are not tax experts.
The IRS receives "a staggering" 110 million calls a year and was unable to answer more than 25 percent of those calls.
The IRS cannot process on a timely basis more than 11 million pieces of taxpayer correspondence it receives each year. The situation leads to erroneous tax assessments and improper collection actions.
To file a lien or claim against property, an individual or company must file a lawsuit against the person owing money and go to court. The IRS can file a lien, against grandma, without filing suit or going before a judge.
"It's easier to push the lien or levy buttons than it is to work with someone to set up a payment plan," said Elizabeth Atkinson, who was a revenue officer for the IRS in the 1980s and 1990s.
If grandma has a tax issue, call a professional, before they stress her into an early grave.
Wishing you many happy returns,
Wayne T. Essex Ph.D.
Essex & Associates
Tax, Accounting, HR, Payroll
7501 Paragon Road
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