IRS Agents Don’t Accept Payment Over The Phone


In recent years, many clients, friends & total strangers have reached out about getting calls ‘From The IRS’, demanding payment or a lawsuit will be filed, IRS (or police) are on their way to arrest you, or something similar unless you give them a credit card to pay the tax bill right now.  I always calm them down, explain how these calls aren’t from the IRS and are from scammers.  I’ve written posts about these scams in the past & how you can report the calls to the IRS – you can find that post here.

Recently IIMG_1277 heard something that should also ease your fears – while holding for an IRS agent and suffering through the hold music, there was an announcement I’d not heard before:  “Please be advised that IRS employees may not accept payments over the phone, only via mail, online through www.irs.gov, or in person”.  Seems the IRS has gotten the hint and are letting people know what methods may be be used for payments are made to the IRS.   Although not everyone will be on hold with the IRS to hear this announcement, kudos to them for finding a way to let the public know,

Seems almost everywhere we turn, there’s some new scam going on – it’s always good to be careful and keep up to date when new scams come to light.  Please feel free to share this post with your friends!

Please let me know if you’ve got any questions – lots of people get nervous (understandably!) when receiving a call from the IRS.  Please write your comments or questions below.

Cheers!

Thomas C. Hodge
President

Hodge Group LLC
3943 N. Austin Avenue
Chicago, IL 60634

773.237.6369

www.thehodgegroup.com

www.taxbillappeals.com – Property Tax Bill Appeals for Cook County IL

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Has the IRS contacted you to update your financial information? This may be why.

The IRS is starting to require updated annual financial information for payment plans.


Recently I called the Internal Revenue Service (IRS) in response to a letter asking a client for updated financial information while they (IRS) review her payment plan.  A very helpful agent took the time to explain why this is happening to a few of my clients.

As the IRS Agent explained, the IRS will no longer keep financial information on file for more than 1 year (instead of 2 or 3 years as had been done) and anyone (individual or business) who submitted financial information to process a payment plan will received a letter requiring updated financial information about 2 months prior to the anniversary date of a payment plan being established.

Once the IRS receives the updated financial information, an analysis will be made to determine if your payment amount should be adjusted (higher or lower).  Please realize you may be asked for backup information, including but not limited to: count_money

  • Pay Stubs
  • Bank Statements
  • Utility Bills
  • Mortgage or Car Note Statements
  • Insurance Policies (especially Whole Life Policies)
  • Statements from Investment and/or Retirement Funds
  • Backup for large expenses

Please realize if you are paying on an accepted Offer In Compromise (IRS Form 656), sending in new financial information does not apply.  The Offer In Compromise is set up specifically for payments of a certain amount over a specified period of time and (aside from prepayments) is rarely modified.

Also not affected are payment plans created without sending in financial data – normally for amounts owed under $50,000.  Normally the IRS does not ask for financial information if it was not needed for the original payment plan.

One reason this is done is to see if the amount owed can be paid off quicker.  Administering payment plans takes time and manpower and the IRS has been cutting back staff in recent years due to budget cuts.  So, if they can speed up collections, then less time/manpower needs to be allocated to payment plans and IRS personnel can work on other matters.

So, if you’ve applied for a payment plan that included your financial information with the IRS and it has been accepted, and the plan lasts for more than a year, you will more than likely get a letter requesting financial information by filling out an IRS form and return it to the IRS, or call them with the figures by a certain due date.  Normally you’ve got less than 30 days to prepare the IRS form and even if you call the IRS phone number, you may not get an extension as to when the financial information must be sent in (I was told the date was ‘fixed and could not be changed’).  Be prepared to send in the original signed form even if you call in the numbers.

You will receive one of the following 3 forms, depending on how much is currently owed on your payment plan:

  • IRS Form 433-D – used when the payment plan is for less than $50,000
  • IRS Form 433-A – Financial information for Individuals who owe more than $50,000
  • IRS Form 433-B – Financial information for Businesses that owe more than $50,000

Be aware this change impacts all types of payment plans – income tax, sales tax, payroll tax, civil penalties, etc.

If your payment plan is set up for several years (the limit is six years) and you had to send in your financial information to set up the plan, then you’ll get a demand for updated financial information annually until the dollar amount is paid off.

Please let me know if you’ve got any questions – lots of people get nervous (understandably!) when receiving a letter from the IRS.  I’m happy to work with you on completing the IRS forms.  Please write your comments or questions below.

Cheers!

Thomas C. Hodge
President

Hodge Group LLC
3943 N. Austin Avenue
Chicago, IL 60618

773.237.6369

www.thehodgegroup.com

www.taxbillappeals.com – Property Tax Bill Appeals for Cook County IL

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Got an IRS notice? Here’s what you should do.


The IRS recently released advice on what you should do if you get a notice from them.  Some good advice 7K0A0079there and recommend reading it, as well as my client handout on the same topic (feel free to download & share!)

If you do get an IRS notice (or one from your state or other taxing body) feel free to contact me through the form below.

Cheers!

Thomas C. Hodge, CPA
President

The Hodge Group
4118 N. Western Avenue
Chicago, IL 60618

773.237.6369

www.thehodgegroup.com

Best Tax Preparers Website

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Gotten a suspicious call or email from the IRS?


If you follow me on Facebook, you’d know I recently got a voice mail from an “Agent Smith from the IRS” stating to IMMEDIATELY call his number as several IRS agents were en-route to arrest me for not paying my taxes. Since I’m up to date on my tax payments, I certainly wasn’t worried about agents coming by for a visit (and thankfully none did!)

Couple of my clients had received similar calls earlier this year, as have other people I know so don’t be surprised if you get a call like this.  If you do, get as much info as you can, including the person’s name (or whatever they’re willing to tell you), an Employee ID (all IRS employees have an ID number and are required to disclose it).  Also, be sure to record the day and time of the call, and the caller ID if you can.

You can then call 800.366.4484 to see if the call was legitimate.  If it wasn’t you should report the incident to TIGTA (Treasury Inspector General for Tax Administration) – here’s that link.

Other people have said they’d gotten emails from the IRS asking the person to send copies of their W2 or other personal info (bank info usually) so a return could be processed.  Unfortunately, these types of messages (email in particular) are usually scams or phishing schemes.  These emails should be forwarded to phishing@irs.gov and then delete it from your system.

I went to the IRS website and found a page describing what to do in the event you get a ‘suspicious IRS-related communication’ – here’s the link.  There’s a bunch of good info there, including how to respond to schemes and where to report it, plus tips on preventing identity theft (an issue I discuss with all my clients and have a free handout on – click here for your copy).   I especially like the YouTube videos on identity theft that are linked from the IRS page.  The page also has additional info on dealing with suspect faxes (never had to deal with that), websites and texts (something I’ve not even heard of until now).  This is a good resource and recommend reviewing it and forwarding it to people that may need the info.

In my case, I did report the call to the IRS (sent an email to phishing@irs.gov – subject of “IRS Phone Scam”).  Also, I went to the TIGTA page  and filled in information. Recommend you do the same so the IRS can get more info on the scams and (hopefully) take some action to stop them.

Have you dealt with these scammers?  Would love to hear your stories and how you handled the calls, emails, faxes, etc.  Please contact me through the form below.

Cheers!

Thomas C. Hodge, CPA
President

The Hodge Group
4118 N. Western Avenue
Chicago, IL 60618

773.237.6369

www.thehodgegroup.com

Best Tax Preparers Website

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Think Setting Up A New Company Will Eliminate A Tax Debt? Think Again!


I’m dealing with something I’ve not seen in a long time – a potential “Successor of Interest” case.  This is where a company that owes taxes is ‘closed’ and a new one opened in the same field, using the same equipment (or assets) and by the same people or related parties.  A potential client who was recently referred to me tried to do this.

What can happen in this instance is the IRS (or another taxing agency if it’s not Federal Tax) can file a Successor of Interest lawsuit stating the first company was closed simply to avoid paying taxes and go after the new company (“Successor Company”).  The IRS’ success rate in these cases is about 90% as it is fairly easy to follow the trail of assets (especially when there is no bill of sale of said assets from the original company to the Successor Company).  I’ve heard of a case like this where the IRS simply went to the Successor Company and seized the assets (essentially putting them out of business) to pay for the old tax debt.

You may ask, “What if the assets are sold for $1?”.  Then the IRS (and/or the Tax Court) would determine if that is considered an arms-length transaction (fair-market value).  If it is determined the sale price is below the market value then the sale could be invalidated or the ‘deemed amount’ increased to what the IRS/Tax Court decides.  A sale not at fair-market value would not stop the lawsuit.

As you can imagine, the costs of this type of lawsuit can be staggering, both in terms of money and time.  Plus the IRS can (and probably would) put liens or levies on assets, including bank accounts making the situation that much harder.

The best way to resolve a case like this (aside from not closing the first company & setting up the Successor Company!) is to set up a payment plan for the old debt, pay that down over time and keep current with the tax debt on the Successor Company.  Since the original company is ‘closed’, then you can’t offer to pay a lessor amount under these circumstances so the full amount of taxes owed would need to be paid, plus interest & penalties as those accrue.  If the original company is still in operation, then you can possibly negotiate your debt down through an Offer in Compromise – another reason not to close the original company!

You simply can’t close a company & assume the tax debt is forgiven – the IRS and other taxing agencies have ways to get to funds/assets that should have been used to pay the debt.  Highly recommend anyone thinking of trying this potential tactic talk to their accountant and/or attorney before going this route.

Do you have questions on this (or another tax relief issue)?  Please contact me through the form below.

Cheers!

Thomas C. Hodge, CPA
President

The Hodge Group
3040 N. Menard Avenue
Chicago, IL 60634

773.237.6369

www.thehodgegroup.com

Best Tax Preparers Website

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