Steven Klitzner of Florida Tax Solvers joined Good Morning Keys on Keys Talk 96.9/102.5FM to talk about the IRS.
There have been some changes in the IRS recently that could have an impact on taxpayers.
Klitzner said, “The higher ups at the IRS took a look at the independent office of appeals, which has been decimated because of all the retirements. Appeals officers that have been there for a while. That’s how they’ve been elevated to appeals. So many of them took the deal, and many of them are gone, and there’s still a few that are leaving. So they have very few people and the big wigs at the IRS said you need to have more cases, because they’re backlogged, and they’re talking about each appeals officer having 100 cases. So what they’re saying is you need to get these cases closed. Now, appeals is where the magic happens where you can make deals and get cases resolved. This is brand new. This just came out two days ago. I don’t know if this means appeals is going to make deals, good for the taxpayer and get cases resolved, or they’re just going to say no, no, no and close the case. So we’re going to find out about that. I did have an appeals officer yesterday say to me that we’re under orders, we have to move these cases along, and that’s not always the best thing for the taxpayer. So we’ll see how that plays out in the coming months. We’ve got to know what they’re thinking beforehand. That’s why, when I speak to somebody at the IRS, I spend a little time gossiping, finding out what’s going on, what’s happening in the office and I usually get some pretty juicy information before a lot of other people get it, and that really helps us out a lot.”
The time to begin preparations of documents is now.
Klitzner said, “I see a lot of non filers come to me because I don’t prepare returns, but I do represent non filers. And some people haven’t filed for many, many years. Some people haven’t filed this century, and they’re trying to stay under the radar. Maybe they will, maybe they won’t, but maybe their best bet is to start this year getting the return filed, getting it paid, and that might be their best way to stay under the radar. Now, of course, I encourage them. You have to file all the old returns. But you only have to go back six years. You haven’t filed returns. The IRS is only looking right now from 2020 forward. If you don’t want to do that, at the very least, get 2025 done. Pay it. Move forward. You can’t keep looking over your shoulder every year because you haven’t filed, it’ll never go away if you start filing, at the very least in six years. If you’ve filed for six years, they’re not going to go back further, and you’re good to go. But the key also is, when you file, you’ve got to pay because you want to stay out of their crosshairs.”
Addressing the current situation is a show of good faith.
Klitzner said, “At the very least you should file all those last six, but at the very least, make this the year you get it under control, and I will tell you this, it’s never as bad as you think it’s going to be. It’s never as painful. I know from talking to my clients over the years. Now, if you don’t have a preparer and you can’t find one, call me and based on your situation, how much money you’re making, how complicated it is, I’ll refer you to a tax preparer that can knock off your return and do it the right way. You don’t want to go to someone who’s just a tax preparer that makes up numbers and just sets you up for an audit. You want to go to an enrolled agent, a CPA, a licensed tax preparer to get it all done and under control. But once you get it going, it’ll start snowballing good instead of the snowballing bad that’s going on now because you haven’t filed.”
If you do have back taxes, it may not be as bad as you think it might be.
Klitzner said, “Once criminal investigation shows up, then it’s too late, so you have to do it beforehand. They just don’t have the resources to go after everybody. But once you start filing, you’re no longer generally a person of interest for them. They’re looking for somebody that they can take to court and get convicted. And it’s very difficult when someone starts filing returns, and then criminal investigation gets involved for a jury to convict them. So the sooner you get it done, I understand people are afraid of criminal they probably should be, but your best bet is to just get this under control, start to get it done. I’ve had people come to me that haven’t filed in years, they would have been entitled to a refund every year, but they were so afraid, and they are only allowed to get refunds for the last three years. That’s the rule. So if you file ‘22 and after, you’ll still get your refund, as long as you do it by April 15.”
The IRS isn’t really the debtors prisons of the 1800s.
Klitzner confirmed, “No. The prisons are not full of non filers. For the most part, they’re more concerned with fraud and people making things up and people running scams, which is why they go after a lot of these bad tax preparers who file false returns so that their clients get a lot of money back, and refer them even more people. Some of them file these fake returns with these gas credits on it, and these credits where the individual gets back $70,000, they take half of it, and then they’re gone, and the IRS comes after that individual for all the money that they gave them back.”
If a person has a tax preparer who makes a mistake or does something fraudulent, is it the liability and responsibility of the taxpayer to remedy whatever mess that preparer may have made?
Klitzner said, “Basically, if they audit you, they’re, in a sense, redoing your return correctly, and you’re going to owe the money, plus all the money that they gave you. That’s going to be your responsibility. The whole thing is this, if it really looks too good to be true, if you’re getting a refund, and you have no idea how or why you’re getting a refund, then there’s a very good chance you’re going to get audited. There’s a very good chance they’re going to go after the preparer, and that’s how they’re going to find you, or they’re going to see your return, and that’s how they’re going to find you. When they audit you and they want their money back, plus more money, plus penalty, plus interest, maybe it’s even for more than one year, it could bankrupt you. I mean, it could be a horrible thing. If it’s just a preparer that everyone tells you, this is the guy, this is the gal. They know what they’re doing. They know all the secrets. The only secret they know is how to scam you and the IRS. That’s about it. We see it a lot with government employees, because when you’re a government employee, you’re a firefighter, police officer, you work with people, and you’re like brothers and sisters. That doesn’t happen in a lot of private businesses. You don’t know anybody else’s business, but there everybody is very close knit, and one person goes to this bad preparer and tells everybody else, this is the person, go to this person, and everybody ends up getting refunds and ultimately getting audited and paying a lot of money back.”
What is the enforcement climate now that we’re a year into a new administration? Is it more stringent, more aggressive, or less so?
Klitzner said, “It’s probably less so, only because there aren’t as many boots on the ground. In Miami Dade and in Broward County, their offices for collection have been split in half. They’ve each gone from 44 down to 22 revenue officers going after the same number of taxpayers, especially people not paying their payroll taxes. The general morale is low. Some people just accept it, and that’s their life. But a lot of the employees just aren’t happy, because how would you like to work for somebody where the people on top don’t like you, and you work for them? They don’t even know you, they don’t like you, they’re against you, and they’re handcuffing you. So it’s not always a great time to be working there, and a lot of the people who may have stayed on, who didn’t even take the deal, are still retiring early and putting that behind them. I don’t think they have any friends. Who would be your friend? People will be afraid of you. If you want people afraid of you, that’d be good, but I don’t know how friendly people are going to be with you.”
If you are getting letters from the IRS, people like Klitzner can help.
He said, “There are some very simple things people can do, but when it gets a lot of money, when it gets to be a little complicated, when you’re getting a letter or a Revenue Officer, you really should have help. I had a guy recently called me in May. Then he decided to do it himself. He called me last month. The IRS had been levying his bank account, and they wrote letters to all the people that owe him money, all of his customers say, pay us, not them. He lost all these customers. Had we started on this months ago, he would have, right now been okay, but right now, we’re scrambling. We’re playing defense that we wouldn’t have had to play and just keeping them from doing any more harm to him.”
What happens in the initial appointment with Klitzner?
He said, “I get the facts, and usually the facts start from what’s happening now. I don’t always need the history. Going forward, it’s more important to find out what’s going on at the present time, and what letters are you getting, what returns have been filed. Give me a little of your financial information, and let’s figure out the plan here. Sometimes we’ve got to act literally today, and other times, we have the luxury of having time to get things together, I don’t know until I get the records and see where the IRS is at.”
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