Apparently the IRS now gives a damn who gets your tax refund (you, or a fraudster). They've decided to put all their big brother information databases to good use by detecting tax refunds filed in your name/SSN that don't add up to what they know about you.

I got a letter yesterday in the mail from the "IRS" saying that they received my 2014 tax return and there were some suspicious discrepancies on it, and that I needed to log into an "idverify" website or call a 1800 number and provide a bunch of personal information before my refund could be paid out to me. Hmmm.... that's suspicious considering I haven't filed my 2014 taxes yet! (got all the paperwork done, just waiting on a 1099 from a customer).

Of course this reeked of a scam, but the letter seemed very legit. There were no misspelling or grammatical errors typical of these idiotic scammers. I almost tossed the letter, but decided to do some research instead. Turns out the letter is legit! The IRS really is detecting tax fraud, verifying identities through another website, and someone really did attempt to file a tax return under my name and SSN.

I wish the scammer would have succeeded. Much to their chagrin, the refund of MY money into THEIR account would have been in the amount of NEGATIVE $11,000! Too bad, so sad. I guess I'll have to pay my taxes after all - no luck scamming the scammers into paying my debt to society. AND to rub a pinch of salt into the wound, I have now lost the option to file electronically. I must print it out and mail it in... so much inconvenience... woe is me.

Thank you, IRS.

 

At least our Government found a good use for tracking all innocent citizens every day.

 

At least our Government found a good use for tracking all innocent citizens every day.

It's little gestures like this minor act of IRS benevolence that make me all too eager to trade more and more freedoms and privacy for more and more security.

[/sarcasm]

 

Well until you get healed by them.

Had an audit; they thought that going from 4 to 5k a month to 2k was suspicious. My business woes I won't go into wherewithal. I was forced to accept the fact that it was over. But; not until the audit. He said (the auditor) in the end; well kv You know 6 years back a Tax attorney; no longer practicing took an deduction on your house. At the time that was not a legal deduction; we will fine you $500 dollars for it.
Earlier a good friend; who also owned a business said; kv I know your legit; but they will find something anything that they can and will poor over more and more years of your history to find it and when they do it will be a $500 fine.

Sure enough he was right. 3 year then 4 then 5 then 6 years finally finding something to fine me with. The problem is they still have to pay the auditor; so it's dig until you find it or make something up.

kv

Edit: Go to court just to justify yourself and be crucified.

You'll be better off paying the fine.

 

Well until you get healed by them.

Had an audit; they thought that going from 4 to 5k a month to 2k was suspicious. My business woes I won't go into wherewithal. I was forced to accept the fact that it was over. But; not until the audit. He said (the auditor) in the end; well kv You know 6 years back a Tax attorney; no longer practicing took an deduction on your house. At the time that was not a legal deduction; we will fine you $500 dollars for it.
Earlier a good friend; who also owned a business said; kv I know your legit; but they will find something anything that they can and will poor over more and more years of your history to find it and when they do it will be a $500 fine.

Sure enough he was right. 3 year then 4 then 5 then 6 years finally finding something to fine me with. The problem is they still have to pay the auditor; so it's dig until you find it or make something up.

kv

Edit: Go to court just to justify yourself and be crucified.

You'll be better off paying the fine.

Hmmm. Strange. My understanding is that the IRS can only go back three years and can only go back up to a maximum of six if and only if a "substantial error" was found in the first three.

 

At least our Government found a good use for tracking all innocent citizens every day.

The IRS like the NSA really is looking and listening. A government that actually listens to it's citizens is something we all should hope for.

 

I've been doing my taxes online for years with Turbotax and have never had any real problems.

This year my wife insisted we have our done professionally so we can get more back.

The old way would have cost me less than $100 filing fees doing ours separate plus she would have gotten her ~$650 refund and I would have been out ~$1700 for my taxes.

What it came down to was paying $191 for 20 minutes at H & R Block so neither of us gets a refund and infact what should have been her refund now goes to pay my extra taxes being she wanted us to file together instead of separate. Thanks wife your way cost us your $650 refund and only reduced my taxes from owing ~$1700 to now owing ~$1500 while costing us near double in processing fees.

 

Bad wife; no cookie!

 

The IRS like the NSA really is looking and listening. A government that actually listens to it's citizens is something we all should hope for.

That sounds so distorted! Did you forget the [sarcasm/off] switch or did you miss the idea that listening to every place my cell phone goes, every conversation with my sister, watching my license plate at multiple points per day, watching all emails, and watching this post is not the kind of listening and watching I want my government to do?

 

Hmmm. Strange. My understanding is that the IRS can only go back three years and can only go back up to a maximum of six if and only if a "substantial error" was found in the first three.

When did that happen? after they were caught strong arming?

All I know; I paid the fine and didn't fight it out. Last was the insult that closed my doors; was the auditor; who said Quote: Is this a business or a hobby? While I was handing him a $500 bank note.

During that time if you pushed back; you could find your bank account and assets frozen. Of course until they've deemed your no longer a criminal. For a business that would be a Death nail so people paid up.

Back then it was legal extortion; you were guilty until proven innocent and is exactly the reason why they were forced to turn over a new leaf.

It's only when Governors; Congress, and the president and Giant Corporations who support their Campaign funding are treated like second rate citizens that suddenly discovered their underhanded tactics.

God forbid they pay their fair share.

kv

 

That sounds so distorted! Did you forget the [sarcasm/off] switch or did you miss the idea that listening to every place my cell phone goes, every conversation with my sister, watching my license plate at multiple points per day, watching all emails, and watching this post is not the kind of listening and watching I want my government to do?

Sarcasm is the art of not making it obvious it is sarcasm at first.
Have a cup of coffee. http://www.zazzle.com/the_nsa_coffee_mug-168740282914940506

 

Sarcasm is the art of not making it obvious it is sarcasm at first.
Have a cup of coffee. http://www.zazzle.com/the_nsa_coffee_mug-168740282914940506

ROFL!
and my sincere apologies for acting like you are an average person.

Number Twelve

 

When did that happen? after they were caught strong arming?

All I know; I paid the fine and didn't fight it out. Last was the insult that closed my doors; was the auditor; who said Quote: Is this a business or a hobby? While I was handing him a $500 bank note.

During that time if you pushed back; you could find your bank account and assets frozen. Of course until they've deemed your no longer a criminal. For a business that would be a Death nail so people paid up.

Back then it was legal extortion; you were guilty until proven innocent and is exactly the reason why they were forced to turn over a new leaf.

It's only when Governors; Congress, and the president and Giant Corporations who support their Campaign funding are treated like second rate citizens that suddenly discovered their underhanded tactics.

God forbid they pay their fair share.

kv

I'm pretty sure the three-year statute goes WAY back -- I remember hearing about it when I was in the service 30 years ago. It was certainly the case when I started my sideline business in 1991.

Asking whether an activity is a business or a hobby is not an insult, it is critical to determining how to treat the income and expenses for tax purposes. My guess is that the reason the question was even being asked was because you were claiming expenses that exceeded revenue in three of the prior five years. Otherwise you would have been given the "presumption of profit seeking" and the issue would have been moot.

Personally, I'd love to see the personal income tax completely repealed and replaced with either a consumption tax or to adjust corporate tax structure. The former would split the burden among those that consume goods and services while rewarding those that save. More importantly, it would make the amount that people pay in taxes much more transparent and apparent to them. The latter would drastically reduce the number of taxable entities which would drastically reduce the size of the IRS and each entity could then afford to maintain a tax professional on staff (or via a cooperative pool in the case of small businesses) at a fraction of the cost it takes when a hundred or so million taxpayers have to deal with overly complicated crap every year. In either case, particularly the latter, wages would go down but buying power would go up.

 

I'm pretty sure the three-year statute goes WAY back -- I remember hearing about it when I was in the service 30 years ago. It was certainly the case when I started my sideline business in 1991.

Mine shut down in 1992.

Asking whether an activity is a business or a hobby is not an insult, it is critical to determining how to treat the income and expenses for tax purposes. My guess is that the reason the question was even being asked was because you were claiming expenses that exceeded revenue in three of the prior five years. Otherwise you would have been given the "presumption of profit seeking" and the issue would have been moot.

Yes, I understood his comment and his meaning as well. Innocently said but; at the time it was difficult to hear the words come out of his mouth.

What burns me now is I paid a tax attorney not to make those mistakes; he must have taken some questionable expenses then. Which is hard for me to believe. I had straight forward expenses with no embellishing; I was handy at storing and sorting my receipts. The file cabinet in my store; kept the Bills, Receipts, Checks, Utilities, Phone, in neatly labeled folders and a box in my Service Truck had a slit in the top and could only to be opened at tax time. Every single receipt slid through the slot in the top of the box while I was out on the road.
A pretty straight forward system I think. My Apartments, Home, and Business checking accounts were separated to make it easy. I ran a tight ship; so if the Tax attorney took illegitimate expenses; I never knew it at the time. I thought it was business as usual.

(Now that I think about it; I was going through a Divorce at the same time. Maybe my wife made a call; I wouldn't put it past her.)

kv

 

Normally it's three years. The problem is, it's usually at least two years before they seriously look at your return. The cursory review, matching documents etc, happens sooner.

There will be a lot more paper audits, where the IRS asks for more information.

As far as Married Filing Separate, there are very few cases where that filing status is beneficial. Most do it because of prior debt of one of the spouses, like child support and student loans. The bad thing is if one itemizes, the other must also itemize. It's far better to do married filing joint and also filing an innocent spouse or injured spouse to protect the others "refund" is a better strategy.