I've written before about my saga with the IRS and the payroll tax snafu for my mom's caregiver. This is related to my mom's 2014 taxes. Long story, short, three quarters taxes were put into a business account. The fourth quarter was paid with my mom's personal taxes. (Details are in the link above, but I was working with my mom's tax accountant AND a payroll company that was supposed to do all the reporting and paying of taxes.)
So, in early 2015 I started getting letters from the IRS. From the business side, they said, "We have $12,000, but no return was filed." From the personal side, "You owe us $12,000."
I would call and explain and they were very nice and understanding, but each month I'd get more letters, with interest and penalties added. No one I called - and often I had to wait one or two hours to even talk to someone - was able to fix it.
Eventually, someone told me to amend the personal taxes and get the payroll taxes out of there. That happened around last September.
At one point I went to my local IRS office because the permission I had to talk on behalf of my mother ended when she passed away and I had to get permission all over again. The local IRS person was actually able to see both sides - personal and business - on the computer and make some changes. But not enough. The letters and penalties kept coming. I kept calling.
One agent said to call the Taxpayer Advocate office. But they had changed the rules a couple weeks earlier and no longer helped out in "long term unresolved problems." Only hardships. Mine wasn't a hardship. I wasn't going to lose my house over this.
At this point I called Senator Murkowski's office in total frustration. They took my information. A couple of weeks later I got a call from the Alaska taxpayer advocate. It seems that in addition to the office I'd called, there's an advocate in every state as well.
She's been working on this for about six months now. She's managed to
1. get the money out of the personal side and into the business side
2. get the personal side to remove all penalties and additional interest, and finally
3. get the business side to remove all penalties and additional interest
I would note that after she called me to say the personal side is set and she thought the business side would be resolved shortly, I got a letter saying the IRS was going to seize my assets to cover the $1300 in penalties and interest that had accumulated on the business side.
But the advocate, when I called, said not to worry, the business side had removed all the penalties as well.
Not only were the penalties removed, the personal side sent me a $30 check refund, and the business side finally sent me a letter saying all the penalties have been removed and they are sending $130 refund. That I haven't seen yet.
I still think it is crazy that no one was ever able to just go into the computer and move the money from one account to the other until the advocate got involved. This was a completely simple and easy to understand issue. All the money had been sent to the IRS in a timely way. They just had to move some of it from one account to another.
I understand that the anti-government and anti-tax bias Congress results in underfunding for the IRS which is the cause for the long delays and for the lack of well trained agents. But someone should have fixed this in early 2015 instead of mid 2016 and they would have saved all kinds of time for me and for the IRS in dealing with my simple problem.
The underfunding for the IRS means agents spend all their time with people like me who have tried to do the right thing get dinged from computer generated laters that don't understand the context, and they don't have time to go after people who are actively engaged in fraud.
For some in Congress, that is probably the intent. For others, the intent is to erode government so more people get pissed off at government inefficiency and vote to shut down government. Others are just following the cult of no government. And probably some are mixing all three motives.
But I'd like to thank Sen. Murkowski's office for hooking me up with the Alaska tax advocate and the advocate - Cindy - for putting this to rest. The only thing left is that final refund check.
For anyone who has a nanny or a caregiver that they are employing close to full time, I'd highly recommend the payroll company we used for 2015 - Homepay. They specialize in doing the taxes for home based employees and my mom's CPA had nothing but praise for the reports they sent him and the payments they made to the state and the IRS. It also was much easier for me to use to pay my mom's caregiver - I could put in the hours online and figure it out and I found a way through Chase to transfer the money directly into the caregiver's bank account. I think it was called quickpay.
Gotta run and get someone from the airport.