IRS Notice of Levy?
September 18, 2017 10:26 PM Subscribe
My partner received an IRS Notice of Levy from their employer... what does this mean?
My partner received an IRS Notice of Levy from their employer today, indicating wage garnishment to repay many thousands of dollars in taxes due from 2010.
The address on the document is not an address my partner has ever lived at or been associated with. My partner did not file a tax return for the year indicated on this document.
My partner has paid taxes via payroll deductions every year, but has not officially filed a tax return in several years because... reasons. (And this is why we're financially independent!) Their payroll deductions should be sufficient to cover any tax liability, and the dumbass has been losing out on refund dollars every year by failing to file.
I have not been able to find any useful details on the address noted on the levy form, just that the property was sold in 2014 with approximately $65,000 in post-due property taxes (sold in 2014; previous sale before 2009).
How should they proceed? To me, this seems like some sort of identity theft, considering that the address used to file the tax return is not related in any way to my partner. It seems very suspicious that the property address on the (seemingly fraudulent) 2010 tax return owed more than a year of my partner's salary in past-due property taxes.
So... what should they do? Given that my partner has not filed taxes in 8-10 years, are there any things that they need to be aware of before they contact the IRS and report potential fraud?
My partner received an IRS Notice of Levy from their employer today, indicating wage garnishment to repay many thousands of dollars in taxes due from 2010.
The address on the document is not an address my partner has ever lived at or been associated with. My partner did not file a tax return for the year indicated on this document.
My partner has paid taxes via payroll deductions every year, but has not officially filed a tax return in several years because... reasons. (And this is why we're financially independent!) Their payroll deductions should be sufficient to cover any tax liability, and the dumbass has been losing out on refund dollars every year by failing to file.
I have not been able to find any useful details on the address noted on the levy form, just that the property was sold in 2014 with approximately $65,000 in post-due property taxes (sold in 2014; previous sale before 2009).
How should they proceed? To me, this seems like some sort of identity theft, considering that the address used to file the tax return is not related in any way to my partner. It seems very suspicious that the property address on the (seemingly fraudulent) 2010 tax return owed more than a year of my partner's salary in past-due property taxes.
So... what should they do? Given that my partner has not filed taxes in 8-10 years, are there any things that they need to be aware of before they contact the IRS and report potential fraud?
Response by poster: Pazazygeek.... thank you! Only part of my question is about my partner's dumbassery -- they have an ostrich head-in-the-sand approach to any complicated issues (i.e. If I ignore it, it will go away) so I tend to be bitter about things that seem obvious to me. (like, filing your taxes! Every year! Before some fraudster can claim your SSN and income! Why didn't you do that!) But yes, I have advised my partner to a. Call the IRS phone number on the form to find out more info on the levy and b. Fill out the forms to request copies of potentially fraudulent tax filings so they can start to file the appropriate documents.
posted by ortoLANparty at 10:56 PM on September 18, 2017
posted by ortoLANparty at 10:56 PM on September 18, 2017
Pazzygeek has it. I also did not file taxes for a number of years way back when. It was DEAD easy for my CPA to negotiate down the amount owed.
Pazzygeek is also correct the first stop is to file a police report + I will add consulting an attorney because identity theft is tricky tricky waters and your partner does not want to fuck up how they approach this.
posted by jbenben at 11:18 PM on September 18, 2017 [2 favorites]
Pazzygeek is also correct the first stop is to file a police report + I will add consulting an attorney because identity theft is tricky tricky waters and your partner does not want to fuck up how they approach this.
posted by jbenben at 11:18 PM on September 18, 2017 [2 favorites]
Also, he can pay back in installments. IRS is not as scary as people think. At least, not 10 years ago when I dealt with this. No fear, but check with a CPA and an attorney because this is a little more complicated than just not paying.
posted by jbenben at 11:20 PM on September 18, 2017 [2 favorites]
posted by jbenben at 11:20 PM on September 18, 2017 [2 favorites]
my partner has not filed taxes in 8-10 years
This might be identity theft, but if the IRS got some wires crossed at some point and got the wrong address in the system for your partner and your partner hasn't engaged with them in a decade to have been able to correct this, it would make sense that the notices have been sent to another address. It totally might be identity theft, but you guysshould probably be planning like there's at least a real possibility that substantial back taxes might be owed if these returns haven't been filed and your partner isn't really good at keeping records of the deductions and such that they should have been eligible for. Once you've hit something of this level of complexity, with this many years involved, I think you really need a CPA, not just to work out this levy but also to get the back taxes filed.
posted by Sequence at 5:59 AM on September 19, 2017 [2 favorites]
This might be identity theft, but if the IRS got some wires crossed at some point and got the wrong address in the system for your partner and your partner hasn't engaged with them in a decade to have been able to correct this, it would make sense that the notices have been sent to another address. It totally might be identity theft, but you guysshould probably be planning like there's at least a real possibility that substantial back taxes might be owed if these returns haven't been filed and your partner isn't really good at keeping records of the deductions and such that they should have been eligible for. Once you've hit something of this level of complexity, with this many years involved, I think you really need a CPA, not just to work out this levy but also to get the back taxes filed.
posted by Sequence at 5:59 AM on September 19, 2017 [2 favorites]
I have no idea if this is identity theft, but I don't think so. Regardless, the IRS does not get all of its information about you from your filings. There are other sides to almost every filing. Did your partner have any interest income? The bank filed the 1099-int with the IRS. His employer filed all the w-2 income, etc.
What the IRS WILL do is based on the information they have, will estimate the amount he owes and then the taxpayer (or the person who did not pay or file) has to prove that that information is incomplete or inaccurate.
Have your partner get a tax accountant and prepare the missing returns. See what it is might be owed. Then, negotiate it down. The IRS would rather have a lump sum payment than spend years garnishing a person's paycheck.
posted by AugustWest at 6:31 AM on September 19, 2017 [1 favorite]
What the IRS WILL do is based on the information they have, will estimate the amount he owes and then the taxpayer (or the person who did not pay or file) has to prove that that information is incomplete or inaccurate.
Have your partner get a tax accountant and prepare the missing returns. See what it is might be owed. Then, negotiate it down. The IRS would rather have a lump sum payment than spend years garnishing a person's paycheck.
posted by AugustWest at 6:31 AM on September 19, 2017 [1 favorite]
I have not been able to find any useful details on the address noted on the levy form, just that the property was sold in 2014 with approximately $65,000 in post-due property taxes (sold in 2014; previous sale before 2009).
If this is from property taxes, then it's not from the IRS. Property taxes are administered by your state or local government. If it's from income tax on gain from the sale of a property interest, then it may be from the IRS. This will make a difference in how you proceed.
Is there a form number on the letter you received? Which specific agency is the letter from? Does it specify a tax type or "kind of tax"? Is this the first letter they've received? (generally a notice of levy on wages is not the first notice of tax liability)
If he hasn't filed a federal income tax return for 2010 yet, he may want to do so. The statute of limitations on assessing tax is, in most cases, three years from the date the return was filed -- if no return is filed, the statute of limitations never runs. (Once the tax is assessed, the statute of limitations for collections is much longer.)
posted by melissasaurus at 6:32 AM on September 19, 2017
If this is from property taxes, then it's not from the IRS. Property taxes are administered by your state or local government. If it's from income tax on gain from the sale of a property interest, then it may be from the IRS. This will make a difference in how you proceed.
Is there a form number on the letter you received? Which specific agency is the letter from? Does it specify a tax type or "kind of tax"? Is this the first letter they've received? (generally a notice of levy on wages is not the first notice of tax liability)
If he hasn't filed a federal income tax return for 2010 yet, he may want to do so. The statute of limitations on assessing tax is, in most cases, three years from the date the return was filed -- if no return is filed, the statute of limitations never runs. (Once the tax is assessed, the statute of limitations for collections is much longer.)
posted by melissasaurus at 6:32 AM on September 19, 2017
Ok - realizing now that I've posted that I misinterpreted your statement about the property tax issue.
If the notice of levy is from the IRS for a 1040, 1040A, or 1040EZ for the tax year 2010, AND he did not file a return for 2010, then he should:
1. Plan to file that year's return (and all past-due years!) ASAP - if he had only income that was reported on W-2s, 1099-INT, etc (rather than self-employment or something) then it should be pretty easy to do. He can get wage and income transcripts from the IRS listing all of his reported income for that year.
and
2. Call the IRS at 1-800-829-1040. There may be a number on the notice, but since you're concerned about identity theft, it's best to not trust the number on the notice and call the main number. He can find out whether a return was filed fraudulently or whether the IRS calculated his tax based on the info it had available to it. The IRS is actually really helpful and a really easy agency to deal with, so do not hesitate to call them. If it's identity theft, they have procedures for that. He should file his returns annually and as soon as possible every year to help guard against someone filing a return in his name. If he in fact does owe the tax, he can set up an installment plan to pay it off monthly and put a hold on collection efforts.
posted by melissasaurus at 6:44 AM on September 19, 2017 [2 favorites]
If the notice of levy is from the IRS for a 1040, 1040A, or 1040EZ for the tax year 2010, AND he did not file a return for 2010, then he should:
1. Plan to file that year's return (and all past-due years!) ASAP - if he had only income that was reported on W-2s, 1099-INT, etc (rather than self-employment or something) then it should be pretty easy to do. He can get wage and income transcripts from the IRS listing all of his reported income for that year.
and
2. Call the IRS at 1-800-829-1040. There may be a number on the notice, but since you're concerned about identity theft, it's best to not trust the number on the notice and call the main number. He can find out whether a return was filed fraudulently or whether the IRS calculated his tax based on the info it had available to it. The IRS is actually really helpful and a really easy agency to deal with, so do not hesitate to call them. If it's identity theft, they have procedures for that. He should file his returns annually and as soon as possible every year to help guard against someone filing a return in his name. If he in fact does owe the tax, he can set up an installment plan to pay it off monthly and put a hold on collection efforts.
posted by melissasaurus at 6:44 AM on September 19, 2017 [2 favorites]
The folks at the IRS helpline have been incredibly kind and helpful every time I have called them with my own dumbassery (or freaky mail, or payment plan arrangement issues, etc).
posted by Lyn Never at 7:55 AM on September 19, 2017
posted by Lyn Never at 7:55 AM on September 19, 2017
Nthing calling the IRS to talk. Even if you are willing to make the call for him and have all his info, you may need to have him physically be there with you to give consent over the phone.
posted by joyceanmachine at 8:51 AM on September 19, 2017
posted by joyceanmachine at 8:51 AM on September 19, 2017
Response by poster: Thanks, everyone. He's talking to a CPA friend and going to call the IRS. I don't have the form but it mentioned 1040a and notice of levy. The name and SSN were correct but the address was not - did not reside in that state. If there were prior notices of intent to levy, I imagine they would have been sent to that address.
The back returns should be pretty straightforward - no interest income, only W2s. I've been bugging him to deal with this for years, and it looks like now he'll be forced to...
posted by ortoLANparty at 11:54 AM on September 19, 2017
The back returns should be pretty straightforward - no interest income, only W2s. I've been bugging him to deal with this for years, and it looks like now he'll be forced to...
posted by ortoLANparty at 11:54 AM on September 19, 2017
This thread is closed to new comments.
It's painstaking to go back and file, but they should for as many years as a cpa recommends.
You didn't ask about this, but it's alarming that so much of your question is about how foolish your partner is, going so far as to call them a dumbass. They appear to be a victim of a crime, and it is pretty serious. What they need is probably some compassion, irresponsible behavior aside.
posted by pazazygeek at 10:43 PM on September 18, 2017 [7 favorites]