Dear Ben: I’d like your opinion on how to best handle the filing of an "Innocent Spouse" form with the Internal Revenue Service. Do I have to go into every nasty detail of my ex-husband’s disloyalty and his "living for the moment" reasons for not paying taxes and as a result–my joint liability for over $30,000 to them? Or do I keep it short, sweet and concise? (Which will be a real trick!) My personal income’s less than $30,000 a year and in our divorce decree he’s already agreed to be responsible for those taxes. But now he’s filed for bankruptcy, forcing me to do the same.
– Donna G. in Houston
Dear Donna: Just because he filed for bankruptcy doesn’t mean he’s off the hook for his IRS obligations. The fact that he’s already agreed to pay the taxes has got to help you make your case, but you’re nuts if you try to strike an Innocent Spouse deal with the IRS on your own. Now is not the time to go cheap: I urge you to hire representation, either a Certified Public Accountant (CPA), an attorney (preferably with expertise in tax matters) or an Enrolled Agent (EA). Since most taxpayers are already paranoid about dealing with the IRS, getting past the "I can’t afford representation" excuse is a frequent emotional victory for consumers that can jump-start them on the road to (tax) recovery. The obvious fear-factor about retribution from the world’s most powerful collection agency, combined with fear over the potential amount of money owed makes for a powerful disincentive combination to come clean.Affordable counsel from EAs can move taxpayers light years closer to getting right with the planet’s most powerful collection agency. Only EAs, attorneys and CPAs are authorized to represent taxpayers in IRS matters. The role of the EA dates back to 1884 when Congress acted to regulate persons representing taxpayers in their dealings with the Treasury Department. Today more than 10,000 EAs practice nationally–many are former IRS agents with a unique perspective into the inner workings of the agency. They’ve either passed an IRS-administered examination or worked in positions that required them to apply or interpret provisions of the Internal Revenue Code on behalf of the IRS.
Dose of Dover For The Week, Part I: If you’re looking for last minute tax-saving tips, keep looking. But if you’re needing a little breathing room, why not file for an extension? (It won’t even cost you a 37-cent stamp to mail!) You can get an automatic four month extension (as long as you filed a 2002 tax return) either on-line at www.irs.gov or over the phone at their special toll-free phone number: (888) 796-1074.
Don’t forget: Filing an extension doesn’t give you more time to pay any taxes owed, it just gives you more time to get your tax return act together.
Dose of Dover For The Week, Part II: If you’ve already filed your tax return and are still waiting on a refund check to show up, you can check on it through the IRS website (mentioned above).
Dose of Dover For The Week, Part III: Unfortunately, April 15th doesn’t mean much for the millions of taxpayers who have gone off IRS radar screens for one reason or another. According to the IRS’ Phil Beasley, an estimated 8.6 million "non-filers" are floating through the system, and their stories of how they became a tax "outlaws" cover the spectrum. Tax protesters have their predictable reasoning for why they don’t owe any dough–and then there’s the rest of the non-filing population–folks who’ve survived a catastrophic event, a major physical or emotional setback that initiated the non-filing spiral.
Over the years it’s become clear to me that loss is the biggest category and #1 trigger for failing to file a return: Loss of a spouse or mate.
Loss of health.
Loss of a job...any or all of them serve as the catalyst to knock taxpayers out of the system the first year and set the stage for fear-based non-filing in subsequent years.
Life’s too short to look over your shoulder–I’ve compiled some insights and options that will (hopefully) help you regain control: www.bendover.com/irs.asp.
|
