Need IRS advice

[jgradyc]

My mother-in-law (in Florida) has been getting letters from the IRS saying she owed $12,000 in back taxes and penalties for not declaring income. It was allegedly a disbursement from her late husband's Illinois teacher's pension. She's 88 and living off social security, so paying $12,000 in back taxes is out of the question. In fact, she hasn't had enough income to need to file a tax return for 3-4 years.

This was just brought to my attention today. Her son has been talking to the IRS about it for months apparently, but he's really worthless when it comes to finances. 

Here's what I remember. Her husband did retire as an Illinois teacher. He died in 2007 and my mother in law did get a disbursement from some Illinois pension plan in 2008-2009. I can't recall the amount... maybe $20,000 to $60,000... I remember only thinking that it was a pretty small amount when it finally came in. 

I'm asking my mother in law to send me the correspondence with the IRS so I can see what's going on.

I guess my question here is... what is a good tax advocate service to help her with this? She is in Florida. I'm in Tennessee.

Edited August 2, 2016 by jgradyc

[Omega]

That's a tough issue, maybe one of those tax relief places I see on tv?  When my MIL passed, my wife and her brother received a disbursement from the State (CO) and I had them tax my wife's half before disbursement.  They took Federal and CO tax, but later returned the CO part when we filed there.  Most that issue disbursements will ask if you want them to withhold tax, but if she was too distraught maybe it went right by her.  You may want to get ahold of the people that disbursed the pension, maybe they withheld but didn't file the paperwork right, I know there is a point where they will withhold whether you want them to or not. 

[Pete123]

A former IRS guy does my taxes.  My book keeper, who is very sharp and someone I trust completely, very much believes in him.  Send a PM if you would like to get connected with him.

[greenego]

Don't know where your mother-in-law is in FL. need to find an Enrolled Agent in her area. My be able to get this put in noncollectable status if her only income is social Security.

http://taxexperts.naea.org/

[bvarnell]

 

You may want to contact her congressman's local office. They like to help with things like that, makes for good PR come election time.

[btq96r]

Get a professional.  Dealing directly with the IRS is no task for the average citizen.  When I was audited by the IRS, my CPA took care of it, the key part being he was the one in direct communication with the IRS examiner the whole time.  I would have never wanted to deal with that end of it.

[Dustbuster]

nashville tax pros dot com


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[jgradyc]

I think I'll gather the paperwork, look it over myself, and then contact what's called an Enrolled Agent (EA). I didn't know such a designation existed, but they represent clients in front of the IRS. I've found 5 in/near Winter Haven, FL. Once I get a better feel of what's going on, I'll interview a couple by phone, see what their fee structure is and how they would propose to proceed with this case. I'd be willing to pay a couple of grand to make this go away before it kills my mother-in-law. She's 88 and doesn't need the stress. It shouldn't take that many hours, especially if it's not really her the IRS is looking for or if we can quickly settle this for a grand or so.

I'm still not convinced that she didn't pay taxes on the disbursement. I think she did, but I wasn't filing her taxes so I don't really know.

[Pain103]

 Do you know it's a legit IRS deal? Many people especially older ones getting conned by those similar scams. I would want to see the actual forms and verify the numbers to go to a federal building. But if I made it to 88 I would probably tell them to pound sand I might only have a year or so left and doubt they would prosecute me. That's me and I plan on being a ornery old fart.

[Parrothead]

I would carefully verify the validity of the debt. The IRS agent can fax you a copy of his credential if you have any doubts. You can also get his/her phone number and extension. Tell them you will call them back immediately. You should hear the prompts of the IRS. If it ring directly to a individual, be very suspicious. Also--she can walk into the local IRS field office and they will verify the debt is valid. 

But, do take care of this. They can (and will) offset the debt out of her Social Security check. Normally, they will work with you prior to offsetting other federal benefits but it does happen,

[Hershmeister]

How was another party talking to the IRS and not your MIL? My fishy radar is pinging

And if it's real - for petes sake - she's 88. Good luck to them in collecting it!


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[jgradyc]

9 hours ago, Hershmeister said:

How was another party talking to the IRS and not your MIL? My fishy radar is pinging

Nothing fishy here... her son lives with her. He has been handling this for the past few months. I don't really know what he has done. My wife is relaying what has been done, so I'm getting information second hand. I've only known about this for the past three days. I try to stay out of in-law affairs because my brother-in-law is financially irresponsible and an extreme liberal. I'm okay with liberals if they can just keep their mouths shut around me, but he can't. 

I've asked him to text me a picture of the letters from the IRS, but he can't handle that. I said take a pic with mom's iPad and email them to me. He says the wifi is down at home. After a couple of similarly frustrating suggestions, I just said photocopy it and send it to me ASAP so I can see what is going on. That's where it stands right now. 

It sounds to me like the IRS has the wrong person, but there are too many bureaucrats involved (or my brother-in-law hasn't really tried) to get to the bottom of this. 

The initial letter (I'm told) said that (mother-in-law's name) received a disbursement from the estate of Dean ____ for the pension. My father-in-law's first name was not Dean, nor did they ever live in Oregon, as the letter stated. My brother-in-law claims to have told the IRS this, but the letters continued. Again, I'm getting all this second hand. Hopefully, I'll have the letters from the IRS by Monday and can dig into this a bit more.

[greenego]

From your last post, sounds like this could be identity theft. Someone got and used your mother-in-laws SSN. We have seen a lot of this last couple of years and it is increasing.

[Parrothead]

12 hours ago, jgradyc said:

It sounds to me like the IRS has the wrong person, but there are too many bureaucrats involved (or my brother-in-law hasn't really tried) to get to the bottom of this. 

The initial letter (I'm told) said that (mother-in-law's name) received a disbursement from the estate of Dean ____ for the pension. My father-in-law's first name was not Dean, nor did they ever live in Oregon, as the letter stated. My brother-in-law claims to have told the IRS this, but the letters continued. Again, I'm getting all this second hand. Hopefully, I'll have the letters from the IRS by Monday and can dig into this a bit more.

I'm pretty sure the lack of effort in the part of your brother in law is more of a issue than bureaucrats at that level of government. I'd be willing to bet that a civil conversation with a local IRS agent on behalf of your mother would clear this in a short period of time. ID theft is hard to stop but pretty easy to spot once the all the cards are down. These guys know what to look for and, in my experience, work diligently to correct the problem.

Do remember, it does absolutely NOTHING for the individual working for the IRS to "stick it to" your mother in law-- they aren't on commission based on how many people they starve enforcing tax law. They have no reason not to help if they have a individual who is legitimately trying to take care of debt. I'd be the first to admit there is a lot of room for improvement in government but, the "scary IRS" image was created by firms who want to "help" you settle your debt--for profit. If you step in, i bet you will see immediate results or at least clarification of the situation. Keep us posted........

[jgradyc]

I spoke my brother-in-law. The letters claim back taxes are due for retirement income of $12,000 paid to Shirley and Allen (dec) [last name] in 2012 of some city in Washington state. It also had my mother-in-law's correct SSAN. 

Of course, her husband wasn't named Allen nor would her husband have received any retirement income from Illinois in 2012 because HE DIED IN 2007. Also, there's the fact that they lived in Florida for the past 30 years and never lived in Washington.

It sounds like identity theft to me. 

Any suggestions on who to contact? Contacting the IRS by phone doesn't seem to be getting it done, since they've been going back and forth on this for nearly a year, according to my brother in law.

[Pain103]

 Does she have any fraudulent charges in any of her accounts or accounts opened in her name? May have to pull a credit report to see if there are some delinquent or open accounts she isn't responsible for. Just a thought if it has been happening for some time might be more going on.

[Dane]

Send in a letter with a certified copy of his death certificate. I have found that quite effective in a number of bill collection issues.

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