The Department of the Treasury, IRS, has two categories. The first category, and the most dangerous, in my opinion, is the IRS Computer. The second category, is the IRS Human.
The IRS Human, is trained to be accommodating, and professional. However, the IRS Computer, has no personality, and could care less about anyone's emotions, thoughts, beliefs, feelings, opinions or circumstances.
The computer does, exactly what it is programmed to do. And one of the IRS Computer's major task, is to match third party information, with taxpayer returns.
If the IRS computer, doesn't find a tax return to match the W2, 1099, 1098, 1099-B or, any other information provided, to the IRS, it will suddenly find the non-filer, to be, a person of interest. This simply means that, the Computer will develop a relationship with you. The computer's new found love for you, will be shown through a series of Notices, that it will send to your last known address.
There is a series of Notices, explaining that the IRS did not receive a tax return from you. The Notice will also explain, which years are missing, and who to contact. Translation: Are you dead, or did you forget to file your taxes?
If no one informs the Computer, that you have died, and, you continue to ignore, the Computer, it will, create what the IRS calls a "Substitute Return" (At this point, the only God, or an IRS Human, who can save you.)
You may be laughing, however, let me assure you, this is not a laughing matter. This "Substitute Return" becomes a legal tax return, which is filed on your behalf, AND, is often used, to garnish your wages, and levy your bank accounts. (I am almost sure, an IRS Human, communicates with the Computer, before it takes all your money, out of your bank account, but I can't say for sure) There are set procedures. You can visit, irs.gov for tax codes)
I missed a step. Before the IRS levies your bank accounts, usually, you will receive a 30 day, written Notice, by certified mail, which, when translated, simply says, "We are going to take your money, if you don't contact us." (Intent to Levy Notice - CP-90)
As the client stood crying about the $7,000, taken out of his savings account, he managed to tell me, that he never received a letter from the IRS.
I cannot tell you what I said to him, but your first guess, is correct.
The bottom line is: File the taxes. It may not stop the penalties and interest from increasing, but it might save you from an extended vacation, arranged by the Department of Justice, meals included.
Cassandra Ingraham is a Tax Accountant in the San Francisco Bay Area, and provides help to IRS, taxpayers, with past due tax returns and IRS Installment Agreements. Visit http://TaxesWillTravel.com for affordable help with past due tax returns.
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