Posted on 04/22/2018 12:37:24 PM PDT by lee martell
Remember that song by Tom Jones; "I who have nothing!". That pretty much describes me. I'm near 62 y/o, working part time. I hope to keep working at least for the next eight to ten years, then start taking my Social Security.
I have no savings to speak of. I will always owe the IRS something from unpaid student loans or wrongly filed tax statements. Most times I don't receive any return at all, it's simply 'absorbed' and paid out to the Govt. The one bright spot is that due to a sibling's death last year, I have received about $20.000 from her estate. More should be coming later this year.
My question is, is there anyway to protect that inherited sum of money, to safeguard it, in case the govt. gets tired of waiting for the scheduled payout. I know from experience that the IRS has the ability to go to my bank at any time, and scoop out all that it contains, if they choose to do so. It has happened before, and I've never forgotten the shock.
Some online searches to that question advise setting up a retirement plan. I currently don't have one. Are there short term retirement plans that would allow me excess to my principal without incurring an Early Withdrawal 'punishment' fee? Could I renew such a plan after a few years have passed?
If it matters, I'm a Navy veteran. My next stop would be to ask someone at the Navy hospital to refer me to an advisor. Most people think they know, but have limited knowledge. I want to do things above board, no tricks. But I don't like the notion of being fully vulnerable to the mercies of the tax collection system.
“I told him to consult an accountant. That is all I need to say.”
You advised him that the he had no tax liability.
“Collection agents don’t have time to chase people who know the law as long as they keep quiet about it.”
Collection agents must follow the law too.
I was a liaison between a state society of CPA’s and the IRS. I was the feedback problem solving guy. The IRS regional director thanked us stating, “Occasionally some of our agents wander off the farm, and we need your help to round them up and bring them back to the farm.”
Just as there are tax cheats, there are also bad agents. They are the exception, not the norm.
What if the law does not require you to file?
I have often advised these people to file returns just to trigger the statuary period.
Did this for an old artist who I once represented in audit. The IRS sent him a letter stating he no longer needed to file.
A couple of years later he showed up at my door with a $75K deficiency notice. He did artwork for a university and they gave him a 1099 misc for close to $200K.
He never filed a return on it as he had his letter from the IRS telling him not to file!!!
“The ten years is from the date tax is assessed.”
True. But this is the later of the due date of the return or filing date for those without further assessments.
I normally hate the thought of using them but it's usually the low-lifes that take advantage of them - no reason some of the good guys can't get an occasional bailout.
Also, it may make a difference that the amount owed is in student loans vs. unmet tax returns - good luck.
Pay your fair share and stop whining. If you had done that in the first place, you wouldn’t need our advice.
The IRS will issue you a “jeopardy assessment “ and issue you a statutory notice of deficiency. These are also called 90 day letters as that is the length of time you have to appeal it to tax court.
If you do nothing. You lose your right to appeal.
I have however had clients pay the balance due where other CPA’s bungled the audit, then I prepared a 1040x amended return which caused the IRS audit to be redone and the client got the $$$ back when no other remedy was available. This works as long as the 3 year statute of limitations has not expired.
Taxes are exactions determined by law. You are under no obligation to pay a “fair amount.” You must pay the legally determined zmount.
Several of those who advertised this are in jail, disbarred or both. Some were scams.
They typically take only big cases. Get large deposits up front from people who have nothing, and then convince the IRS that the people have nothing to settle.
Thanks for the info - fortunately I’ll never be in position to need such “services”...
And apparently, the OP hasn’t done that.
I said that I think for the small inheritance he should not have a tax liability. Consult your accountant.
OP = OPR.. Office of Professional Responsibility
For the past few years OPR has been focused more on Circular 230 compliance and preparer liability enforcement.
I’m very happy to be retired as the regulations relating to due diligence and file documentation is going extreme to stop fraud. Most of my clients I’ve had, I knew the family and business for 20+ years. No need for copies of birth certificates when you held the child as a newborn and knew the mother through the pregnancy!
“the small inheritance he should not have a tax liability.”
Very true, but not the issue for him. Protecting the inheritance from IRS collections is his issue.
You have some great stories, and I’d bet you have plenty more.
What’s your opinion of Joe Bannister?
OP = Original Poster
LOL.... My Bad... Thanks
I’ve always heard that they will negotiate. But, you can’t turn it into cash; banks have to report any withdrawals over about $2500. If you were a rich big shot, or a politician, you could launder it, but us little people don’t get those perks.
“What’s your opinion of Joe Bannister?”
While I don’t know much about his case details, it appears that he escaped prosecution due to adequate disclosure in preparing his client’s returns while his client is doing 6 years behind bars.
His client would appear to have a claim against him under the circumstances... but there are many facts of which I am unaware.
The system is the punishment and as such I am not about to take a tax protester position. I’ve never investigated the legal merits of the protester positions, and even if they have merit the chances of winning a battle when you have the cards stacked against you is slim. Even if the positions had legal merit, it would be malpractice for me to advise clients to follow the protester path.
The career path of Joe Bannister is impressive. I.R.S. Criminal Investigation Division (CID) for 6 years, tax department of KPMG Peat Marwick (now “KPMG”). After three years at KPMG, He moved on to a controller position at U.S. Venture Partners (U.S.V.P.) in Menlo Park, California and fulfilled the requirements for a California Certified Public Accountant (”CPA”)
The guy has intelligence and an impressive resume. Makes me wonder what happened in his personal life. He is no doubt brilliant, but so is the nobel winning mathematician John Nash, whom the movie “Beautiful Mind” is about.
I’ve known a few attorneys like Bannister. Absolutely brilliant, but a bit off the wall. I don’t have a problem with that.
I reserve judgement on Bannister, while holding a bit of admiration at his being David and willing to take on Goliath.
I don’t think Bannister is an attorney. I think he has worked closely with some. I could be wrong.
My understanding is that he was prosecuted and acquitted. I think the key to having the IRS leave you alone is to simply let the IRS you know they can’t show the statutes that require most people to pay an income tax and don’t be a public crusader.
Your clients must love you. The IRS, not so much.
I’ve really enjoyed reading your posts. Take Care.
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