Identity theft has been a big problem in the U.S. for over the past decade. Until recently, identity theft primarily involved the theft of a victims social security number and related private information for the purpose of applying for a credit card or loan.

Another type of identity theft which has  been on the rise in an alarming fashion in the United States is the theft or fraudulent use of a taxpayers identity for the purpose of obtaining a job and earning income on the books.

This type of theft occurs when a individual wants to get a job but is refused employment because he or she lacks permission from the U.S. Department of Homeland Security to work in the United States. The thief steals the taxpayer’s identity and gets a job posing as a person who is permitted to work in the U.S.

Of course the thief will request that none of the necessary withholding tax payments be made to the IRS by the payroll company. This results in additional tax being owed at the end of the year because the IRS receives an informational return from the employer stating that income has been earned by the victim and that no tax was withheld.

The IRS then automatically assumes that the victimized taxpayer owes additional income tax to the the Federal government.

Sure enough the taxpayer will receive a notice of deficiency from the IRS and it will reflect “additional” tax owed (plus penalties and interest).

What can an innocent taxpayer do when his or her identity was stolen and income was earned in their name and are now getting collection (levy) letters from the IRS?

The good news is that the IRS has a very good system in place to investigate these cases. In fact, there is a whole department in the IRS which is charged with investigating and correcting the damage done by these criminals.

A taxpayer should complete IRS Form 14039, Identity Theft Affidavit, and mail it to:

Internal Revenue Service
P.O. Box 9039
Andover, MA 01810-0939, USA

It can take upwards of six to nine months to have the matter resolved, so patience is a virtue.

Call an IRS & New York State Tax Defense Attorney at the Law Office of Joseph Y. Balisok, LL.M. (Tax) P.C. to schedule your free consultation.

Call us now at 800-538-3649 or email us at info@lawbalisok.com.

CIRCULAR 230 DISCLOSURE: Per regulations governing practice before the Internal Revenue Service, any tax advice contained herein is not intended or written for use, and cannot be used, to avoid tax penalties that may be imposed on the taxpayer.

In general, after the IRS reviews the tax return of a taxpayer (return audit) and the agent/auditor concludes that the taxpayer earned more income than he or she may have already admitted to earning or claimed a deduction or exemption for which he or she was not entitled, the IRS will issue a letter to the taxpayer stating that additional tax is owed to the U.S. Government.

This letter is technically referred to in tax parlance as a “Statutory Notice of Deficiency” (SNOD) or “a 90 day letter.”

The reason why this letter is so very important is because it enables a taxpayer to petition (go) to the United States Tax Court and have the Judge presiding over the case take a good look at the IRS’s opinion that more tax is owed by the taxpayer.

It is essentially your ticket to Tax Court.

Without this precious letter one cannot access the U.S. Tax Court. In fact, even with the letter in hand, if a taxpayer tries to go to the U.S. Tax Court after the letter expires (90 days from the date the letter was signed), the Court will not be able to entertain the Petition.

A taxpayer does not actually owe the tax until 90 days expires without the filing of a Petition or after a trial on the merits, a U.S. Tax Court Judge agrees with the IRS’s position. Thus, no Notice of Federal Tax Lien can be filed concerning the taxpayer until either one of these occur.

The IRS makes mistakes. People make mistakes all the time and IRS agents/auditors are human. Don’t be discouraged if you receive a SNOD. Having a Judge look at your case can make all the difference.

Call an IRS & New York State Tax Defense Attorney at the Law Office of Joseph Y. Balisok, LL.M. (Tax) P.C. to schedule your free consultation.

Call us now at 800-538-3649 or email us at info@lawbalisok.com.

CIRCULAR 230 DISCLOSURE: Per regulations governing practice before the Internal Revenue Service, any tax advice contained herein is not intended or written for use, and cannot be used, to avoid tax penalties that may be imposed on the taxpayer.

Anyone who has to deal with the IRS on a regular basis knows that they do not always keep track of Audit Reconsideration requests submitted by taxpayers. The first challenge that many tax attorneys face when trying to obtain an audit reconsideration for their client involves making sure that the audit reconsideration request does not get lost.

The main problem with the file getting lost is that the IRS collections agent charged with pursuing the challenged tax debt may not receive instructions to cease collection actions while the outcome of the Audit Reconsideration is pending. This of course can have a detrimental effect on a taxpayers financial well being. Wage garnishments, bank account levies, sale of property, are all typical enforced collection actions taken by the IRS.

It is important to remember that the Internal Revenue Manual explicitly states that while an audit reconsideration is underway  . . . “collection action must cease.”

To be clear, the whole reason why an IRS Tax Defense Attorney requests an audit reconsideration in the first place is because “new evidence not previously reviewed by the IRS” makes it clear that the additions to tax assessed by the IRS were made in “error” and that the taxpayer is entitled to an abatement (reduction) of some or all of the additions to tax as a “matter of law.”

The IRS & New York Tax Defense Attorney’s at the Law Office of Joseph Y. Balisok, LL.M. (Tax) P.C., have repeatedly found that contacting your local Taxpayer Advocate Service and completing Form 911 asking the Advocate to assist with finding the lost reconsideration request, can help resolve both issues. You will need to enclose with the Form 911 a 1) copy of your audit reconsideration packet previously mailed to the IRS, and 2) the USPS registered mail return receipt proving that the packet was delivered. You should receive a call shortly from the Advocate regarding the matter.

CIRCULAR 230 DISCLOSURE: Per regulations governing practice before the Internal Revenue Service, any tax advice contained herein is not intended or written for use, and cannot be used, to avoid tax penalties that may be imposed on the taxpayer.

Call us today at (800) 538-3649 to schedule a free consultation regarding your New York State or Federal Tax Law issue.