My battle with the IRS is over!
Three and a half years after my mom died, and having endured interminable machinations with the incompetent, diffuse, and impenetrable bureaucracy of the IRS including threats of seizure of property, we finally have closed the lingering case of her final tax return. What started as an identity theft caper later became a comedy of errors only the IRS could generate, replete with phone conversations with various agents in various cities, some hostile and some modestly helpful, three page letters, several kilograms of documentation sent via fax and mail, dozens of computerized notices telling us how much we owed, and a barely English-speaking representative from the Taxpayer Advocate’s office who was not very well versed in the tax code, but who at least served as a pleasant albeit clueless buffer between me and the IRS bureaucracy.
At various times, IRS claimed that we owed up to $6,000. In the end, however, they finally conceded that our original 2011 return, on which the balance due was zero, was true and correct.
Ahhh, sweet victory! Oh, how I wish Mom were here to celebrate! No, wait! This protracted battle is the kind of thing that she feared the most. Had she been on the planet to experience the drawn out affair, it could have killed her prematurely.
Below, I present for your schadenfreudistic pleasure, our story of truth, justice, and the American way.
IRS Gone Gitcha!
Mom always deeply feared that something like this would happen during her long life. Fortunately, the bureaucracy waited until after her passing to bring on the shit storm. Mom’s anxiety around tax time was palpable — she feared that not dotting her I’s or crossing her T’s on her tax returns, or the post office delaying her checks would bring trench coated, jack booted, Gestapo-like IRS agents to her door in the wee hours to drag her off, lock her up, throw away the key, and feed her stale crusts of bread along with fetid water for the rest of her days. I am not exaggerating. It was truly that bad.
The kind of protracted battle we have fought with IRS for two and a half years would have driven Mom completely over the brink. In order to make life easier for her at tax time, I took over the responsibility of filing her taxes in her later years, engaging the services of a trusted CPA. Even so, and despite repeated reassurances about such seemingly trivial issues as the fact that Tyvek® envelopes are indeed strong enough to hold her documents securely on their way to the IRS service center, she continued to be a nervous wreck as April 15 approached each year.
My CPA, Marty, and I made sure everything was perfect every year to help set her mind at ease; however, Mom’s mind knew no ease, being clenched firmly in the unrelenting grip of the tax man. No sooner would we file one year’s return than her anxiety over the next year would commence. And so it went, year in, year out, until she finally crossed the great divide to tax-free peace at the ripe old age of 90.
Identity Theft — a Rampant Problem
Mom lived in South Florida, one of the hot spots for identity theft in the nation. CBS’ 60 Minutes recently aired a feature story investigating this morass. Who knows how some scumbag got Mom’s social security number and filed a fraudulent return that requested a refund? Speculation abounded. Perhaps someone in the hospital in which she died got the information. According to the 60 Minutes story, it is all too easy to buy names and identifying numbers. Whatever happened, the perp filed a return under her name but apparently used some address where a refund could be sent to get it into the thieves’ hands. They cashed it and went on their merry, thieving, scumbaginous ways.
When Marty’s office filed the legitimate return electronically, it got kicked out of the IRS system because the fraudulent return had been filed previously on that account. Knowing how screwed up the IRS can be, especially with recent budget cuts, Marty re-filed Mom’s return manually. As the balance due on the 2011 return was zero, we thought all was well at that point. We were wrong!
The IRS Fun Begins
A couple of months after Marty filed Mom’s legitimate return in September 2012, I got a notice stating that we owed $5,845.80 including interest and penalties. My first thought upon receiving it was to ignore it because the amounts shown on it bore no relation to anything we filed. I figured that IRS was screwed up, as usual. After speaking to Marty, we decided that I should call them.
On November 7, 2012, after about a 45-minute wait in the hold queue, I spoke with a helpful and pleasant Ms. T in the Cleveland IRS Center. Upon checking, she confirmed that the balance due was the result of the fraudulent return. It would be removed from my file, and the balance due would be brought to zero. She said I should give it six to eight weeks for the correction to appear in the system.
I next heard from IRS in December 2012. Another notice arrived telling me that I owed even more due to interest and penalties. I called IRS again on December 13, 2012, and again had to wait a lonnnnng time before getting an agent on the line. First, there was a Ms. J, who refused to discuss the case with me unless I could produce either a power of attorney officially filed with the IRS by my mom or a letter of appointment by the probate court designating me as executor. Mom did not believe that she would ever die, so she did not file a power of attorney with the IRS to enable one of us to handle IRS’s tax screw-ups after her death, and her estate was under the Florida limit requiring probate, so a simple will was all she had. In it, my brother and I were designated as personal representatives, but that wasn’t good enough for Ms. J. She suggested that I talk to “Exam” about it.
I called the number she gave me for “Exam” and spoke with a Mr. W. He was reasonable and during the 35-minute call, he consulted several people, eventually telling me that the case indeed had been turned over to “Exam” and they were working on it as an identity theft case but there had been no progress. I said that Ms. T had told me that the account would be zeroed, but Mr. W told me that wouldn’t happen until the investigation had concluded. He suggested that I talk with “Collections” to see if I could get them to stop sending notices pending the investigative activity.
Then, I spoke with Ms. G in “Collections.” She gave the same rigamaroll about the need for documentation of my status as executor before she could talk to me. She said all she could tell me was that it had been noted as an identity theft case and that it was in progress; however, the “Exam” unit at IRS had been deluged with such cases, resulting in a huge backlog that could push resolution out four to six months. I told her that I didn’t like getting the payment demands generated by IRS’s computer, to which she responded that I didn’t owe it, Mom’s estate owes it. Now that’s reassuring.
Threats of Seizure
About six weeks after my conversations of December 13, 2012, I received a New Year’s present from IRS — or so I thought. A very official looking certified, return receipt requested letter arrived. I was thinking that they sure get fancy about telling us taxpayers that their investigations have concluded. That bubble burst when I opened the envelope.
It was a “Notice of intent to levy”. In bold 16-point type, it read:
Intent to seize your property or rights to property
Amount due immediately: $5,936.41
It went on to say:
As we notified you before, our records show you have unpaid taxes for the year ending December 31, 2011 (Form 1040). If you don’t call us immediately or pay the amount due by January 31, 2013, we may seize (“levy”) any state tax refund to which you’re entitled and apply it to the $5,936.41 you owe.
If you still have an outstanding balance after we seize any state tax refund, we may take possession of your other property or your rights to property.
Oh, joy. WTF??? We were going backward instead of forward. I talked to Marty, who reiterated that I owed nothing and told me to take a chill pill since these notices were generated by IRS’s notoriously backlogged and crappy computer system. He told me to ignore it.
Pretty hard to ignore something with the threat of property seizure. Next thing they’ll threaten is seizure of my gonads, I thought, but ignore it I did.
Conclusion in sight? Nope.
I heard not even a peep from IRS until receiving a computer generated letter dated September 9, 2013, which told me that they were reviewing our real return and it appeared that we might be a victim of identity theft. No kidding?
The letter told me to allow up to 90 days for resolution due to the complexity of identity theft cases and that I would receive notification when my account had been fully resolved.
This was followed up with a letter from IRS on October 3. 2013, which stated:
We placed an identity theft indicator on your tax account to flag any return submitted with your social security number (SSN) We’ll review those returns to ensure that someone else hasn’t used your SSN to file a return. This indicator will remain on your account for three years. We’ll extend that time and contact you if we see any indication that someone else is using your SSN to file a tax return or gain employment.
We review and verified your return dated 9/22/12, which resolved the issues with your 2011 tax return. We will notify you once we update and correct your account. Please continue to file all federal tax returns as you normally would.
Progress, I thought.
But no. The postman always rings twice.
On January 31, 2014, I received a letter thanking me for filing an amended return on my Mom’s social security number. It said, “we have adjusted your account as you requested.” Only thing is — neither Marty nor I ever filed an amended return (1040X) on my Mom’s account. On consultation with Marty, he said that this form letter was probably as much of a confirmation as IRS would ever give me that they finally straightened out the account. Alas, there was yet another time bomb ticking away.
Mistake on an amended return we never filed.
Thinking the whole thing was behind us for most of 2014 led to another tragically burst bubble. As a Christmas present from the IRS, we received a letter dated December 24, 2014 stating that they had processed our original return; however, a balance remains due to an error that was made on our original Schedule A.
I reviewed our original Schedule A with Marty and we could find no conceivable errors in it. Marty’s expensive computerized tax system just did not make mistakes, and two sets of human brains corroborating the electronic beast’s decisions could find nothing at all wrong with the return.
I told Marty that I didn’t want to call IRS and wait forever, but he encouraged me to do it anyway. So I called IRS on December 30, 2014 and after a typical 40-minute wait, spoke with Mr. S. He went away to “read over the notes,” then after several minutes of beeping, clicking, and general cacophony, a woman picked up and identified herself only as “Internal Revenue Service.” She could not hear me so she finally said, “I apologize but I can’t hear anything on this line so you’ll have to call back.”
I did so and spoke with Mr. H, who before he could even hear my question said, “We’re having some type of problems. I need to put you on hold to see if I can get that resolved.” Eventually, I got to review the highlights with him. When I said that the IRS had advised us that it was a case of identity theft and we had to do nothing more, he acted as if he didn’t believe me.
“Who told you that?”
I gave him the agent’s name and badge number.
Furthermore, he could not produce a copy of the Schedule A on which there was purportedly an error or the amended return that was filed without our knowledge. I told him that I could not just pay an amount that they pulled out of the air with no substantiation. He said that “Exam” section had advised collections that it was an identity theft case but that there was a balance due because of an error on Schedule A.
I told him that made no sense whatsoever, as I had reviewed Schedule A on the only valid return in our possession several times and found no errors. Whatever error existed must have been associated with the phantom 1040X they acknowledged but which was not filed by us. Why couldn’t he retrieve that amended return? Was the IRS in a position to just arbitrarily declare an amount due with absolutely no substantiation?
One would think that it would be a simple matter to retrieve the return, review it line-by-line, and determine whether or not errors exist — but nothing is a simple matter with the IRS.
I think I wore Mr. H down, because he decided to refer me to the Taxpayer Advocate Program, through which he told me I would have a single point of contact with a direct phone number who would intercede with IRS on my behalf. He said that person would call me within seven business days and he gave me a number to call in case he or she failed to do so.
Progress, maybe, possibly, I thought.
Ebon in Yacksomebeel
My IRS-appointed personal taxpayer advocate, Yvonne, did indeed call me on January 14, 2014. Here is the Google Voice transcript of the voice mail she left:
Hi, this is going for baby. I mean going for. If you don’t have the text me add okay. Cleaned you have a day at Texas, 420. I live in for on March time. Goldfarb, hi this is going for baby. I mean going for. If you don’t have the text me add okay. Cleaned you have a day at Texas, 420. I live in for on March time. Goldfarb it. I need that you give me a call and to tokyo 665 and 16th. Please give me a call in. Thank you.
Clearly, I could not rely on Google Voice to create a readable transcript of voice mails left by someone with a thick Latino accent.
However, my own ears, which are superior to those of any highly sophisticated Google machinery, could understand her — once I got used to her Latin rhythms. She was telling me that she wanted proof that I was Mom’s executor before she could do anything for me. Sound familiar?
We agreed that the appropriate page from Mom’s will would be adequate proof, so she axed me to fax it (or she asked me to fask it) to her at the Yacksomebeel (oops, I mean Jacksonville) office. I did, but because the information she sought had been highlighted on the original wheel (oops, I mean will), came through black on the fax, she wanted it via another medium. This was transcribed by Google Voice as follows:
Hi Mrs. Goldfarb you see if you’ve gone from the next week then okay, ohh did taxes for and I’d going for will happen here you that you send me to fax and I received a fax and the information. I will do wheels. But on the formation 310 in the person that details the rise in these when you You know what east and an underlying mean you know it’s a black I cannot see any. Nahoum any main or they at. I would arise burst on in the East. We in the is sick with her Again a bit time east. You are the person I was the rise to receive information. Maybe you will have a week. Daddy’s not. We did all those marks. I would need dad. 285 Eastern a seemed a week as I have to Rice percent of received information. OR. In Your there information that you that can leave me. It’s to understand that you are Delta rice 1st on I need that you give me a call on my phone number is **********. Please give me a call at.
I called her at, saying I could scan the pages and send a PDF, but no, they cannot do email. I would have to send copies to her via U.S. mail. She told me that she would next initiate communications on or about February 19. That was to be the pattern. We would talk, and while she conveyed the results of the conversation to the appropriate functionary at IRS, I would wait for a month or so to hear from her.
On February 9, Yvonne called me to tell me that I needed to fill out and send her an IRS Form 14039, Identity Theft Affidavit, along with a copy of my mother’s driver’s license or other photo ID. Fortunately, I kept her license, so I was able to fax Ebon (oops, I mean Yvonne) the information she wanted, even though I believed that the identity theft issues had been decided long age and that this was some kind of stall tactic.
Another month passes.
“What’s next?” I thought. I soon found out.
On March 13, 2015, my advocate triumphantly told me, “The IRS have research jour case and detairmine dat jou owe $2502.80. Jou can now pay dat amound an jour case wheel be cloze on April 15.”
Holy crap! Back to square one!
I asked her how she figured that amount. She said it was easy. Take the amount on the adjusted gross income line and look it up in the tax table. That gives you the amount of tax due. The return said zero, but the tax table said otherwise. Deng jou add eentrest and pengalties.
I asked her, “Aren’t there cases in which the tax is not calculated based on the tax tables?” I knew damn well that there were. She laughed and said no there weren’t. Bullshit once more!
I consulted Marty. He said that the reason the tax was zero was due to much of Mom’s income being composed of qualifying dividends, which at her level of income were taxed at zero percent. He said he was surprised that the IRS computers did not take the qualifying dividend rule into account. He could have researched it and obtained the exact wording from the code from 2011 for me, but I told him not to bother because he was mired in IRS deadlines. I’m pretty good with on-line research.
I found what I needed and faxed Yvonne the verbiage directly from the 2011 Form 1040 instructions, along with the Qualified Dividends and Capital Gain Tax Worksheet that the instructions said should be used to figure the tax.
Yvonne said that she would forward my calculations to the IRS, while Marty remained dumbfounded over the notion that the IRS’s computer didn’t know its own rules. I proposed that they probably didn’t bother inputting anything into the computer because they didn’t trust it due to some form of bureaucratic institutionalized paranoia — or maybe just plain laziness. That was March 2015.
Not Done Yet
After a couple of weeks, Yvonne called me back to tell me that while I had sent her (and consequently IRS) the appropriate worksheet and the tax calculation, it referred to Schedule D, which I had not sent. Shazbut!
Hi. This is Yvonne kind of expertise had booked me about on the case of your mother. HI need. This kid who is DE. I never received this. Give me the for the year 20 and Event Sunday never receive it, but they receive. He was, they information, that you send me. A M by fax that you was they were chance. But No, this Kevin, D I need to call, but it is good with D If they will be able on to okay. And there is. He’s requesting this, go to the as well. Please fax me they discover the, please. If you call my phone number is *******. Thank you.
Silly me! I kind of thought that IRS would have the tax return, including Schedule D, on file. Guess not. Then I remembered that when I asked them to show me the amended return on which they claimed I owed money, they couldn’t produce it or the phantom Schedule A for me, either. Yvonne told me that they had the 1040 but not the rest of the schedules. (Why bother filing them? But I digress.) So, I faxed her the Schedule D and asked her if we would finally close the case on April 15. She said, “No, jou’ll hear from me nex’ on May de twengty-seex.”
A couple of weeks ago, one of the now familiar window envelopes from IRS arrived. I thought, “What now?”, figuring that they had found another way to stall on Mom’s 2011 return. But no, this was completely unrelated to Mom’s 2011 taxes. In fact, they were telling me that the first installment of my own 2015 estimated tax return hadn’t been received, so they were charging late payment penalties plus interest. Of course, the check had been sent to them timely and indeed had been cashed by then. Marty told me to ignore it unless I receive another notice next month, as IRS is way behind on posting payments. (I thought, here we go again! But I digress.)
Yesterday, this sad saga suddenly and unexpectedly drew to a close. (I think, maybe, possibly.) A communication from the IRS post-dated to next Monday, the day before Yvonne is supposed to get back to me, entitled “Changes to your 2011 Form 1040” contained the words I had longed to read for two and a half years. This time, the letter’s contents were indeed cause for celebration:
Amount due: $0.00
We made the changes you requested to your
2011 Form 1040 to adjust your Schedule D.
As a result, you owe $0.00.
Holy shit! We did it!
I’m a little uneasy because IRS had given me so many reasons to prematurely celebrate the conclusion of this caper over the past couple of years, but I think peradventure this time it is for real.
In the back of my mind, I continue to think they still believe something is wrong with the phantom Schedule A, but I digress.
In triumph, I sent the following notification to those who had persevered with me though the whole mess:
Friends, Romans, and countrymen, lend me your ears. We come here not to praise the IRS but to bury them.
Holy sheeeeit! We finally did it. We wore them down and now victory is ours after two and a half years of shitslinging. What the hell will I do without my monthly conversations with my barely English speaking taxpayer advocate, de loabley Yvonne in Yacksonveal? What the hell will I do absent the monthly demand letters from her friends at IRS, threatening to seize my property and my gonads?
I dunno, but I kinda like the feeling. (Not of the gonad seizing.)
I’m fixing to frame the attached letter. Drinks are on me. Wish Martha was around to celebrate with us!
A rather hollow victory, but a victory nonetheless.
Is it any wonder why people like my mom, who never stepped over the line in her life, live in mortal fear of the authorities? I wish no one ever had to deal with this sort of institutionalized incompetence, but it is an endemic component of living in a government strangled society. Death and taxes are inevitable.
Mom, rest in peace. The tax man is no longer after you.