Steve Klitzner, the IRS Problem Resolution Attorney, joined Good Morning Keys on KeysTalk 96.9/102.5FM yesterday morning to talk about tax issues.
There can be scams, even in the tax world.
Klitzner said, “People think that they when they hear that I take care of IRS problems for people and I solve them, some people judge that, oh, all your clients are guilty, etcetera, etcetera. Well, yes, most of my clients haven’t paid their taxes. They didn’t want to get into that problem, but they did. But I do represent some people that just have made some bad mistakes, and as a result, owe tax money. I had a call last week from a lady, and this one really broke my heart. I actually don’t know the whole story, because I couldn’t ask her questions. It was upsetting me so much. But the bottom line is, she became convinced, through a scam and making a phone call to who she thought was Apple, that she had been scammed and somebody had taken $32,000, when indeed they had not. Well, then she was told, in order to protect all of her money, and she and her husband are in their 70s, they needed to give their life savings, send it over, and we’ll give you back, it was something in relation to some gold or something like that, and your money will be protected. Well, all their money went, seven figures, life savings, and it’s gone. They took it out of their investment account. They’re going to have tax consequences. We estimate it could be $600,000 that I’m going to try to go to the IRS and see if I can significantly reduce that based on the circumstances. But I think the lesson is this, when someone wants you to give them money, no matter how convinced you might be, you need to take a step back and just call somebody, call your kids, call your parents, your friends, your lawyer, your accountant, your banker, call somebody and just run it by them. If you do that, maybe you won’t take that step because something happens with people. I got it from her completely. It just short circuited in her brain. She just couldn’t process that this could be a scam and as a result, I mean, it’s just heartbreaking.”
The IRS doesn’t typically act on emotions.
Klitzner said, “There’s no question. They don’t, for the most part, care. We’re going to try to prevail on them based on effective tax administration and even hardship to see what we can do. They do have some property left, but certainly they’re not as comfortable as they would have been and the scams come in different forms. I have a lady I represent who had an online romance with someone who wasn’t who she thought she was, and they were going to buy property together, and she thought he was in Europe. She actually did some investigation when she lost all of her money, and he’s somewhere in Mexico. But what happened was she turned all her money over to him. I think they were going to buy a property together, but he just doesn’t exist, and her money is gone.”
Is there no way to recoup that?
Klitzner said, “Nothing happens. And even if they found the people who knows if they’re even in this country, they’ll never get the money back. But I was involved in a scam. I was a potential scammer once almost. I get a call from somebody up in Pennsylvania. It was a banker, and he said, my client, my customer, just told me he sent you whatever it was dollars, $60,000, and he wants to know what happened to it? Well, apparently, some scam artists out there wrote to people. It’s usually older people. It was people in the Northeast telling them that they’d won, of course, the lottery that they never played. But in order to take care of their tax implications, they need to send a check for $60,000 to Steve Klitzner because he’s our tax attorney, and he will take care of all the taxes for you. Of course, I knew nothing about it. The PO Box was in my area. Several people called me, some of them before they sent the money. Thank goodness. Others after they sent the money. The first thing I did was call the police. They checked it out. We never heard from the police again. The second thing I did was call the Florida Bar and say to them, listen, if anyone complains that I’m scamming, I just want you to make a note, it’s not me. Fortunately, no one ever complained about the fake me. But everybody is vulnerable, and another example of people just for whatever reason, falling for a scam, and it becomes like a perfect storm of mistakes, and the next thing you know, you’re out a lot of money.”
Sometimes the scammers can be impersonating the IRS.
Klitzner said, “If you get an email from the IRS, it is not from the IRS, it is a scam. If you get a phone call from the IRS, it is a scam. They will always write you a letter first. If they send it to a private collection agency, you’ll get a letter. If they’ve assigned it to a Revenue Officer here locally, you will first get an appointment letter. That doesn’t mean you have to go to the appointment, but you’ll get a first contact letter. The problem is, some people have an IRS problem, and coincidentally, get a phone call or an email, and they do think it’s real and then they fall for it. Of course, the IRS doesn’t take iTunes gift cards or Walmart gift cards, and you can always pay by check, and you can always go online to pay it, so you never have to mail them anything, and you can always check your IRS account online. The other scam we see is when a federal tax lien is filed, you have these scammers around the country sending out letters that look like official IRS letters, and they don’t have a website, they don’t have a name, they just have a phone number. It looks like they’re the IRS and you can resolve your problem with them. Those are scammers who are trying to get you to give them money so that they could theoretically help you with your IRS problem. The only thing they’re helping themselves to is a free check from you, because you may never hear from them again.”
Once someone pays a scammer money, the scams can get even worse.
Klitzner said, “Once they know you’ll send them money, somebody else will be calling you, figuring out all of a sudden, we know you paid your IRS taxes. You now have state taxes due. We don’t have state income tax here in Florida, but you have state taxes due. They will continue until they bleed you dry and it’s just very concerning for everybody, and you just have to give it some thought. Just ask anyone you know what you should do, and hopefully that person will stop. I had a gentleman come in a few years ago, and he got a scam phone call, but he was convinced there was a problem with his tax return, and that’s why they were calling him. His wife was with him. She kept telling me, talk sense into him. Finally I said, just hire me. I don’t want you to hire me, but hire me. I will get the records, and I will show you you do not have any problems and that’s exactly what happened. He insisted on giving me money, just for peace of mind, even though I told him not to worry.”
It helps that Klitzner has relationships with the IRS.
He said, “It allows me to cut to the chase. You know that doesn’t mean because I know somebody at the IRS suddenly, they’re going to give my client some incredible deal that could get them fired. It doesn’t work that way, but they will give us some leeway. They will let me suggest some solutions, and they will work with me because we have a common goal, and that is resolving the case so that my client can afford to make payments and not be set up for failure, and the IRS will be happy with what they’re getting, even if it’s short term, and we’re going to revisit it later.”
What happens if someone doesn’t get the letters the IRS sends?
Klitzner said, “They’re generally only required to send it to your last known address, so if you do move, of course, when you file a tax return, the IRS will have a new address for you, and that’s the address they have to send it to. You could also send a change of address to the IRS. Most people won’t think of that when they’re moving. That’s the last people they’re going to let know. But if they send it to the address on file, no matter what it says, it counts against you, and you could be losing valuable rights. We have that with a lot of folks that haven’t filed in many years, and the IRS is sending them very threatening letters. They’re threatening to file returns for them to an old address, and if they no longer get the mail there, one day their bank account can be taken and we have to just kind of unravel the whole thing and start all over again. So you have to be careful and let the IRS know where you are in order to make sure all your rights are protected, especially if you haven’t filed returns. Some people say it’s great they don’t know where I am. No, that’s a bad thing. You want them to know, because you want to know what they’re doing against you. Now that doesn’t mean you call them because, I had a client recently, represented him for many years, and he owed a few bucks more for this year. Instead of calling me, he called the IRS, and he opened up a floodgate. They’re threatening. They defaulted his Installment Agreement, and all he had to do, he had been a client for many years, is he could bother me. He didn’t want to bother me. Bother me. I would not have done what he did, and we would now not be basically starting all over, when we could have nipped this in the bud right away.”
It’s not really a good idea to call the IRS directly.
Klitzner said, “First of all, you could wake them up. They could start giving you some deadlines and all of a sudden, change the whole course again. They may even, if you owe a lot of money, send the case to the field. Now you have a revenue officer working on it. The other problem with calling the 800 number is the folks there don’t understand that they can say, I don’t know. They’re always going to give you an answer, and it’s not often correct. You would be shocked at the bad information they get. People call me and say, well, I called them and I spoke to somebody and I have their badge number, which, of course, doesn’t matter. You get somebody different all the time. It doesn’t matter who they spoke to and they told me to do innocent spouse, and it’s like you’re not even married. What are we talking about here? They just say things, and it doesn’t mean it’s right, but if you want to get an answer you like, just keep calling and ultimately you’ll get an answer you like. It may not be right, that’s not the point, but it will be what will make you happy for that moment.”
Despite all the news about cutbacks, the IRS is still going after taxpayers.
Klitzner confirmed, “Oh, they are, and they’re using AI now, which they just did something that they haven’t done in over five years. The people at automated collections, the 800 number people, who are handling cases, not people in the field, just started issuing levies, bank accounts, wage levies. It started last week, and the problem is they don’t have people now that are going to handle the phone calls, are going to handle the appeals. I was told that appeals in South Florida is usually up to date. They’re now 600 cases in the queue waiting for someone to get to them, so it’s a mess. When the computer generates a problem, there may not be anybody to call to stop the problem. You just have to avoid it. The lesson of the day, other than don’t get scammed, is don’t think they’re bluffing.”
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