IRS Errors

[Christian]

Are any of you noting an increase in errors made by the Service of late? A client of mine was sent a $1,000 refund he should not have got only to get a send it back letter a month or so later (of course by then his wife had spent it !). I discussed the problem with another client's 529 plan issue in an earlier post. Another non client approached me because her husband had died in 2015 which was duly indicated on her 2015 joint return. On filing her single return in 2016 the Service sent a letter advising her she was deceased so she had to go to the local Social Security office to provide proof she was still living. To date she has yet to receive her refund while they get this sorted. 

[Lee B]

Yes, as I have been saying for several years, the IRS is definitely showing signs of systemic stress due to reduced staffing and budget.

[ILLMAS]

This topic just comes in a perfect time, a client sent me a copy of a notice they received today,  according to the notice, they have an X amount of credit because they have not received their Form 944.  I called the IRS right away, come to find out I do not appear as a third-party designee on any filed payroll tax forms for 2016 , this doesn't bother me, a simple POA could fix this, what bothers me, is that my client has never filed a 944, their payroll is significant, plus they have over 10 years of filing 941/940's and the agent could not help me over phone and recommend I put everything I told her in writing and to mail it in.

[Catherine]

1 hour ago, ILLMAS said:

and to mail it in

You'd think they could at least give you a fax number for the person you spoke with, who might then have a clue what the paperwork is all about!

[RitaB]

14 hours ago, Christian said:

Are any of you noting an increase in errors made by the Service of late?  

Now that you mention it...  A DIYer came in recently for me to review her 2016 return because she has no idea what was wrong with it, and IRS sent her a refund she did not expect in May.  She did not receive any correspondence explaining what was adjusted.

She filled out the online PDF forms for 2016. 100,000 wages, 47,000 ordinary dividends, 60,000 Sch C loss, 95,000 long term capital gain from sale of fully depreciated commercial building and equipment, 38,000 Sch E loss (yes, there it was on line 17), SS benefits.  I'm probably forgetting something, but you get the ideas:  1) Don't DIY.  2) If you're going to DIY (please don't), at least spring for software.  3) Hello?? (Did you really DIY?)

She figured her liability was 23,000 or so.  She said IRS sent her a refund of 11,000ish.

With the passive loss disallowed and AMT, her liability was about 46,000.  If she hires me to amend this mess, and she should, it will be a Merry Christmas indeed, no need to tell me to charge accordingly.  I'm absolutely stunned at this one.  More at IRS than her. 

[ILLMAS]

Thanks for the laugh Rita, this is also a true story.  When Timmy was in grade school the teacher ask him to solve a problem on the board, what is 2 + 2=?, Timmy went up there and wrote 4, the teacher said correct.  All of a sudden a little girl named Mary raised her hand, the teacher called on her, what is it Mary, the correct answer is 2, the teacher baffled said, how is 2 + 2 = 2?  Mary responded by saying, my mother said to only believe half of what boys say.  Well Tim now as an adult came to see me this week, he had his own assessment on a couple of IRS billed he had received and somehow he was trying to convince me left and right that the IRS made a mistake and he did not personally (trust fund penalties for a couple of years) owe any money because it was the corporation who should owe the money.   I still think Mary was right.