I is for Infernal or Infuriating or what?
The letters IRS strike fear into the heart of even the mightiest of men and women. I am sure that even Superman himself would tremble while opening an envelope containing a certified letter from the IRS, as I did this past Monday morning.
Now I knew that I owed them money, back taxes from 1997 and 1998. It had been a much larger amount, but my 2002 and 2003 returns had been filed earlier this year, both of which contained substantial refunds that would greatly reduce the balance I owed to the IRS, or the "service" as it is referred to by those in the know. I even had a plan. I would be getting an even larger refund from my 2004 return, which I would file in early February of 2005 (I've been preparing the 2004 return now, while I am out of work) and that refund would more than satisfy the rest of what I owed the IRS, bringing my balance to zero and ending my fear of receiving certified mail from them.
Instead I stood there in the post office, reading that worst of bad possibile pieces of mail from the IRS, notice of a lien. What that means is that the IRS is placing a "hold" on any and all property, including bank accounts that a person owns, and they have the absolute right to seize any and all of that property in order to satisfy the debt owed to them.
But I wasn't worried. I have 12 years of experience preparing tax returns, I've dealt with the IRS before, I'll call them and work it all out. I will set up an arrangement, they will wait until the 2004 return is prepared and processed and everything will be fine.
Unfortunately it didn't happen that way. I got on the phone, and waited on hold for an hour without getting through to anyone. So I hung up and dialed the number again, in spite of the warning that you shouldn't do that, it will prolong your wait. But nineteen minutes later, I was on the line with a revenue agent (known as an assistor, although considering how little assistance she provided, using that label is ridiculous) who told me she'd be happy to help me set up an arrangement, but that the lien couldn't be lifted until the balance was paid in full and that the service might seize my bank accounts at any time, even though I had worked out an arrangement with her. I shook my head and asked how I could go ahead and pay the balance in full, and she told me that I should call the Official Payments Corporation where I could pay my balance by credit card.
One little problem. The nimrod I spoke with either didn't know, or completely forgot that the Official Payments Corporation's contract with the IRS limits them to accepting payments for only the 2003 and 2002 tax years and the balance I owed was from a year before 2002. So I couldn't pay by credit card. Thusly I had to call the Infuriating Revenue Service yet again, spend another 23 minutes on hold before I reached yet another revenue agent who told me to go get a cashier's check from the bank and take it to the nearest IRS office, a 35 minute drive from my apartment in traffic.
The cashier's check cost me nothing, thanks to a sympathetic teller. Parking at the Federal Building where the IRS office I had to go cost me six bucks. But the big cost will come in the near future. I had to use money from my retirement plan rollover to pay this balance. Because of that fact, unless I find some way to replace that money before the rollover period expires in December, I will pay an extra $4,000 in income taxes and penalties in 2004. They were and are holding a large refund that I will get in 2005 and I had to use my retirement plan rollover to pay them now, instead of in February? You bet I'm infuriated.
Who will benefit from this? My clients this coming tax season. Because I will be taking a little extra satisfaction this year in saving them money on income taxes.
Now I knew that I owed them money, back taxes from 1997 and 1998. It had been a much larger amount, but my 2002 and 2003 returns had been filed earlier this year, both of which contained substantial refunds that would greatly reduce the balance I owed to the IRS, or the "service" as it is referred to by those in the know. I even had a plan. I would be getting an even larger refund from my 2004 return, which I would file in early February of 2005 (I've been preparing the 2004 return now, while I am out of work) and that refund would more than satisfy the rest of what I owed the IRS, bringing my balance to zero and ending my fear of receiving certified mail from them.
Instead I stood there in the post office, reading that worst of bad possibile pieces of mail from the IRS, notice of a lien. What that means is that the IRS is placing a "hold" on any and all property, including bank accounts that a person owns, and they have the absolute right to seize any and all of that property in order to satisfy the debt owed to them.
But I wasn't worried. I have 12 years of experience preparing tax returns, I've dealt with the IRS before, I'll call them and work it all out. I will set up an arrangement, they will wait until the 2004 return is prepared and processed and everything will be fine.
Unfortunately it didn't happen that way. I got on the phone, and waited on hold for an hour without getting through to anyone. So I hung up and dialed the number again, in spite of the warning that you shouldn't do that, it will prolong your wait. But nineteen minutes later, I was on the line with a revenue agent (known as an assistor, although considering how little assistance she provided, using that label is ridiculous) who told me she'd be happy to help me set up an arrangement, but that the lien couldn't be lifted until the balance was paid in full and that the service might seize my bank accounts at any time, even though I had worked out an arrangement with her. I shook my head and asked how I could go ahead and pay the balance in full, and she told me that I should call the Official Payments Corporation where I could pay my balance by credit card.
One little problem. The nimrod I spoke with either didn't know, or completely forgot that the Official Payments Corporation's contract with the IRS limits them to accepting payments for only the 2003 and 2002 tax years and the balance I owed was from a year before 2002. So I couldn't pay by credit card. Thusly I had to call the Infuriating Revenue Service yet again, spend another 23 minutes on hold before I reached yet another revenue agent who told me to go get a cashier's check from the bank and take it to the nearest IRS office, a 35 minute drive from my apartment in traffic.
The cashier's check cost me nothing, thanks to a sympathetic teller. Parking at the Federal Building where the IRS office I had to go cost me six bucks. But the big cost will come in the near future. I had to use money from my retirement plan rollover to pay this balance. Because of that fact, unless I find some way to replace that money before the rollover period expires in December, I will pay an extra $4,000 in income taxes and penalties in 2004. They were and are holding a large refund that I will get in 2005 and I had to use my retirement plan rollover to pay them now, instead of in February? You bet I'm infuriated.
Who will benefit from this? My clients this coming tax season. Because I will be taking a little extra satisfaction this year in saving them money on income taxes.
posted by me at 9:52 PM
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