At Least I’m Not Classified as “Dead”

I’ve been talking over the past months about the issues faced by taxpayers in dealing with the IRS.  Suffice to say, when you have a 3% chance of reaching a human things aren’t going well.  But we should always look at the good side of things: I’m still breathing (in reality and in view of the IRS).

One woman in New Jersey is classified as “deceased” according to this report in the New York Post.  It’s going on seven years of bureaucratic futility in rising like a Phoenix to life.  Of course, she is really breathing and this is something that should just have gotten fixed immediately.  And yes, she still must pay taxes even though she’s “deceased.”

Indeed, I was able to give a client good news this week.  He was erroneously assessed a late filing penalty on a foreign trust return (the return was timely filed with an extension, and we had proof of both the timely filing and the extension).  Late filed foreign trust returns (Form 3520) are assessed a $10,000 penalty.  When the client was assessed the penalty he wrote the IRS with proof.  When the IRS ignored him, he asked me to write the IRS.  I did so, but the IRS refused to reverse the ruling.  We appealed, and after eighteen months of waiting we received a letter reversing the penalty.  (We never had an Appeals hearing–it appears that the Appeals screener realized that my client did have an extension.)

The overall theme when dealing with the IRS remains the same: patience.  You need it when dealing with the IRS.  I do expect things to slowly improve once the IRS moves employees back to the Service Centers (probably this Fall), but given the humongous backlog it will takes years for the IRS to be back to normal.


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