Monday, June 23, 2008

THE NEW IRS LETTER

I will say this for the Internal Revenue Service – if you write them a letter in most cases you will receive a written acknowledgement or response. That is much more than I can say for the New Jersey Division of Taxation, who more often then not totally ignores my correspondence – unless I write to someone specific high up on the organizational ladder.

For the past year or so, however, the written response one receives from the IRS is always the same –

We haven’t resolved this matter because we haven’t completed all the research necessary for a complete response. We will contact you again within 45 days to let you know what action we are taking. You don’t need to to anything further now on this matter.”

This response is often followed 45, or 60, days later by a second letter stating, basically, “we still haven’t resolved this matter and need another 45 days.”

The latest receipt of this form letter was dated June 13 and sent in response to correspondence received by the IRS on May 12th. The situation was this – the IRS shorted a taxpayer’s refund. There was federal income tax withheld from investment income, and this federal income tax withholding was reported on an IRS information return. The requested refund was short by the amount of federal income tax withheld from this investment income. I included a copy of the information return, highlighting the amount withheld, with my letter.

What is “all the research necessary”? Look at the information return I included. Check with the IRS matching program. Send the taxpayer the additional refund plus interest.

A similar response was received earlier this month from the local Taxpayer Advocate office -

In reviewing your inquiry for the above taxpayer, I find in order to resolve this issue additional time is needed. I will contact you [within 30 days] with the progress I have made.”

The TAO matter is a complete mess, and will be the subject of another posting when finally resolved. For now I will just say that my correspondence and faxes to the local office were totally ignored and it took letters to National Taxpayer Advocate Nina Olsen on two separate occasions to get responses from the local office.

What is with the IRS? Are they that seriously understaffed and/or overloaded with taxpayer correspondence? This has been going on for some time now, so it can’t be blamed on the “stimulus” rebate election year bribes.

To be honest, the “we need more time” letter is certainly better than being totally ignored. At least I know that the IRS has received my correspondence and is allegedly working on the matter. It is still much better than dealing with the NJ Division of Taxation.

The next time I get a notice or request for information from the Internal Revenue Service I think I will wait about two weeks and write back-

Thank you for your notice/inquiry dated X/X/XXXX regarding the above referenced taxpayer and return..

I haven’t completed all the research necessary to properly respond to your request. I will contact you again within 45 days to let you know where we are at
.”

TAFN

Friday, June 6, 2008

I'M STILL HERE

I apologize for the lack of postings here. I have been busy with the GD extensions and my other blogs, including the new ASK THE TAX PRO. I did manage to enjoy two full weeks “1040 Free”.

The newsletter of the NJ chapter of the National Association of Tax Professionals is now printed online. I learned about it from WHAT’S NEW on the NATP website. Click here to read the Spring 2008 issue. It is 6 pages long - but contains a lot of extraneous “stuff” and not really much “meat”. It also failed to include my name in its list of 20-year members of NJ-NATP!

Speaking of NJ-NATP, its 20th Annual Conference will be held on Thursday, September 18, 2008 at the Woodbridge Hilton in Iselin (is there an Iselin Hilton in Woodbridge?). The topics will include Protecting One’s Practice, the Taxpayer Advocate, and a “special presentation” by the NJ Department of Labor. The chapter is also planning another “breakfast seminar” in the Jamesburg area (Exit 8A on NJT) for the fall.

TAFN