Steve Klitzner, the IRS Problem Resolution Attorney, joined Good Morning Keys on KeysTalk 96.9/102.5FM this morning to talk about tax season.
Even with all the federal cutbacks happening, you still need to take care of delinquent taxes or unfiled returns.
Klitzner said, “The IRS isn’t going away. I have talked to a manager who manages revenue officers. Those are the collection officers in her group. She had 10 people. Two were transferred, four were let go because they were new. So now they’ve got four people at 110% capacity in the audit division. I got a call from a manager of auditors. She said to me, the audit you have tomorrow, we’ve got a postpone it. That auditor has been let go. She went from nine people to three, and she’s trying to handle the work of the other six. Now, when you hear that, you think, maybe in a business, they just move things along quickly, go from one to the next and just keep going. The IRS is different. I think what the IRS is going to do is let it back up, but continue to work cases hard, not give people a break, just go as business as usual. So you can’t just feel if you don’t do anything, nothing’s ever going to happen to you, because ultimately it will. Morale is down, and they are scared, every one of them, but for the most part, they say we’re just putting our heads down and doing the work. Now some folks might say, well, if I don’t file, I’m going to be okay. They’ll never come after me. Or if I file and don’t pay, they’ll never come after me. But remember, the IRS has 10 years and five years from now, with penalty and interest. If you owe $10,000 today, it could be $20,000 in five years. So ultimately, they’re going to catch up to you. It’s best not to fall behind.”
Will refunds slow down?
Klitzner said, “That’s how everyone feels. I will tell you this. My son did his return already. He got his refund in 10 days, went right to his bank account. Now that may not be true for everyone, and the more you get, maybe the longer it takes, but at least so far, I haven’t heard much in the way of delays of refunds. Good Reason, get your return filed sooner rather than later, so you will get your refund back.”
What about the more severe penalties, will they slow down?
Klitzner said, “The people at the 800 number automated collections, they’re still sending out the collection letters, and those go out by computer, too, just like the correspondence audits go out by computer. But when the case comes to a Revenue Officer in the field, they’re going to work it. And let me tell you, you could owe $20,000, they’re going to treat it like a million bucks. They want that money when it gets assigned to somebody. The biggest problem or the biggest thing to worry about are payroll taxes. If you’re a business owner, do not fall behind on payroll taxes. That is something that is inevitable, that they’re coming after you, and it can be quite a lot of money, with the penalty and interest. The portion they withhold from employees, that comes to about 60% to 65%, the money withheld from employees, Social Security, Medicare and withholding. The way the IRS looks at that is, yes, the business owes all the money, but that money you withheld from employees, somebody stole it, and we’re coming after one or more people at the business to get that money directly from them, if the business doesn’t pay it.”
If someone has past problems, it’s very important to get current.
Klitzner said, “That’s the most important thing. Once we get going on a case, or once you want to get this under control, the key is stop it going forward. The IRS will always work with you on the past, as long as you’re not a problem going forward. If you continue to owe every year and continue not to pay your taxes or file, from their standpoint, they may as well just start taking your things. They’ve given up on you. So the first thing we always do after we get the transcripts is get our clients in compliance. Now, the way the IRS is working today, we may not take action right away, affirmative action. Our job may be, get the transcripts, get ourselves current, monitor this and do things that are in our best interest, rather than awake the sleeping giant. But it is important that even if you’re under the radar, that you get help, so that you’re proactive and not going to have an immediate problem once the case gets assigned. You have to just get it under control. I was talking to a client of mine, a new case, and every year he owes a few $1,000 and he doesn’t make enough money to pay his taxes. Well, no one makes enough money to pay their taxes, no matter how much you make. But I kept explaining to him, and he didn’t quite get it, that he’s got to get it under control going forward. He’s got to file and pay this year. He said, I don’t have the money for this year. I said, alright, look, file this year, 2024’s return, April 15, and at least in 2025 start paying it in. If you do that, they’ll work with me on the past if they see are paying in for the current year going forward.”
If you have tax issues, you should really let a professional handle it. Don’t try to do it yourself.
Klitzner said, “It’s kind of an investment for me to help you out. In the long run, you’ll come out better. You’ll save aggravation, time and money. As a matter of fact, when we fill out the financial forms for the IRS, some people pay me every month. They can’t afford my fee, and they’ll pay me every month. We actually put that as an expense, and the IRS allows the payment to me, so technically, you’re paying me and not the IRS, and they allow that. The thing to do is, if you’ve been behind in the past, make this the year you catch up and get it under control and if you’ve stayed good over the years, don’t change what you’re doing. Keep on doing it. The IRS nightmare is not something that you want to keep you up at night.”
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