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No Topic Neal Mulligan neal karenmulligan@rcn.com DJ,
You become a TDI, taxpayer delinquency investigation. If they know of income they make up a tax return for you giving you married filing separate status and no dependents under IRC sec. 6020(b). Mfs gets you half of the standard deduction, they do this even if they are aware of your dependents. Sort of makes a lie out of their official position that there is no marriage penalty. Worse yet if you were not required to file but they thought the income was yours they can assess you this way and you might never know it. This happened to a client of mine. He was in business with his wife before they got married. He made the sales and she created the product. They got divorced and he gave up the business to her and took cash from the sale of a house. No gain just cash.
She incorporated the business but the old customers continued to send him 1099's under his SSN. He left the country and traveled for a couple of years.
When he returned to work a few years later he had a federal tax lien against him. IRS took his refund and sent him a letter stating the offset was for a prior tax bill.
Thinking they had made a mistake he sent them a letter strongly protesting their action, claiming he did not owe any money to the government. They ignored his protest and simply told him where the money had been applied and that he should promptly pay the balance or more interest and penalty would accumulate. He continued to write protesting that they were in error. They ignored him for awhile then levied his salary. By now a new tax year was upon us and they offset the new refund as well. He hired a lawyer who was refused information because he had not filed a proper power of attorney form 2848. When they finally answered him they merely explained what the taxpayer and attorney already knew. He had quit his job when the employer informed him that he had no alternative but to give over his salary less $75 to the IRS. Whereupon he came to me. By now more than 2 years had passed since he was notified that his original refund was being offset. I filed a claim for a refund by filing a tax return for the wrongfully assessed year with no tax due. They, corrected the assessment to zero but insisted on keeping all the offset money because he had not filed a timely claim for the original refund, 2 years. I was able to persuade Appeals that the original protest sent by him constituted a claim for refund and got him his money back. This whole episode cost him his job, about a thousand dollars in legal and accounting fees, and enough aggravation to last a lifetime. They're a lovely bunch.

NEAL



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