Steve Klitzner, the IRS Problem Resolution Attorney, joined Good Morning Keys on KeysTalk 96.9/102.5FM yesterday morning to talk about tax time.
You have until May 1 to file your taxes in Florida, but don’t procrastinate.
Klitzner said, “The May 1 gave everybody a little bit of a buffer, and even the accountants weren’t as crazy this year, the ones I was talking to, but now in Florida, all the deadlines are moved to May 1, so if you file and pay May 1, there’ll be no failure to file. There’ll be no failure to pay. You’re still in good shape. Of course, if you’re not able to file, you can get a an extension just to file, not to pay. The estimated taxes, it’s very important to talk to your tax preparer about what estimated taxes you need to pay this year. It’s based on last year’s income. A lot of times I see tax preparers give the taxpayer little coupons and don’t really explain to them, this is something you have to do. It’s not voluntary. You have to make your estimated payments. So this year, it’ll be May 1, then June 15, September 15 and January 15 for those of you who do not have withholding taxes to pay in their taxes for 2025.”
Will there be cutbacks at the IRS?
Klitzner said, “Here’s the latest with the IRS, they have about 100,000 employees, and word is they’re going to get rid of 25,000 or so. Now, I see different reports. One report said in the last buyout email where you can resign and get paid till September, 20,000 IRS employees took that. I don’t know that that’s true. I do know that starting today, is the first phase of cutting out IRS people. The second phase will be in August. What they’re looking at, they’ve already got rid of the new people, what they’re looking at now are folks that have been with the IRS for 20 years, and they’re over 50 years old. These are called the experienced people. When they get rid of them, it’s going to be left with a lot of people who need training. So that’s a big problem. When I speak to the IRS, they often say to me, Steve, are you hiring anybody, asking for a friend? They’re really afraid that they’re going down. Back in COVID, we learned to say to everybody, when you’re finishing a call, you say, be safe. So I’m starting to say that now to IRS people I talk to at the end, it’s like, be safe. I know what you mean. They’re very afraid, and we’ll see what happens the next time the hammer drops.”
It likely won’t make anyone take their eye off the ball, though.
Klitzner said, “They’re not making any really better deals, they’re trying to move things a little quicker. But it’s not like it’s Easter time there and they’re giving away chocolate bunnies. You still have to go through everything and make sure that you dot the I’s and cross the T’s. A lot of folks are like, well, the IRS isn’t going to be coming after me. Why should I file? The problem with that is, if you don’t file, there’s no statute of limitations. The IRS can come after you indefinitely to make you file your returns and if you owe $10,000 and don’t file and don’t pay, and wait to hear from the IRS, and in four or five years, they come after you, it’s almost $20,000 and they’re not waving the penalty and interest, so taking the attitude, I don’t care, they’re never going to come after me, is a bad one. If you do owe money and you filed your returns, they have 10 years to collect and if you want to take that chance, that nothing’s going to happen for 10 years, and you’re just constantly looking over your shoulder, I don’t know that that’s a good idea. The time to take care of your taxes is now.”
There are still people in the IRS and Klitzner has had relationships with those folks for years.
He said, “It’s true. I have to call all the time to see if people are still there. It’s like, are you there today? Are you there tomorrow? They don’t know what to do. They are in limbo too. So we’ll see how things are. They’re very far behind. I saw one statistic on identity theft cases they’re working on the ones from October 2023. They’re a year and a half behind on those. So they’re falling behind, but they will wake up now and then. The other thing is, how is AI going to get involved here? They lose people, they go to AI. Is AI going to be out of control? Is the computer going to start just levying people and filing liens? We don’t know yet, so it’s a good time not to have an IRS problem, because you don’t know what’s going to happen next.”
Will we continue to see audits?
Klitzner said, “The good news for taxpayers is that they came out with an announcement, and some of these new audits that they haven’t really developed may just get closed out. They may just send them back to the IRS for the time being. But the existing audits just aren’t going away. They are taking longer because every time I turn around, there’s a new auditor on the case. The last one’s gone, and so we are seeing that. But audits are still happening. If you file a return that really looks bad on its face, that looks too good to be true, there’s a good chance you’re going to get audited on that and penalties and interests are going to be a lot. It’s going to cost you a lot more if you don’t do the return right.”
Getting overwhelmed by taxes doesn’t mean that you’re a bad person.
Klitzner said, “So many good people fall behind because they’re just overwhelmed. They don’t know what to do. Maybe they don’t have the money at that point, but you just have to put a priority on the IRS, even though they’re not coming after you the day after you don’t pay like other creditors might, they’re just not someone that you want to be on their list. You don’t want to be on their Christmas card list.”
Getting current on your taxes is the best way to move forward.
Klitzner said, “At the very minimum, start today with today, going forward, file, don’t owe, and then I can deal with all the past stuff, no matter what you owe, we can deal with it, and we can make a deal that you can afford it. Some people can afford to pay the IRS $100 a month, $1,000, $10,000. Some people can’t afford to pay anything and that’s what we’re going for. If you can’t pay them $1,000 a month, we’ll make a deal where you don’t pay them $1,000 a month. Some people who are really in dire straits, we can do an offer and compromise, and they can settle for a lot less going forward. But even when you settle with an offer and compromise, you’re entering into a contract and the contract says for five years, you must file on time and pay on time. You’ve got to be good going forward.”
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