The IRS Collection Division, an arm of the Internal Revenue Service, has little known practices they use to collect tax money for the US government. The actual collection process has hidden secrets, as do any organization’s procedures. These so-called secrets provide people who know the system to work better within the system, “Knowing is Power”. Here are some of those little known secrets.
5 tips that are valuable when dealing with the IRS:
Tip #1
Should the IRS place your case in “currently noncollectable” status, how and when will they send your case back to the field?
There are two triggering mechanisms that place your case back into the system. Knowing these are strategic because it allows you to plan for the IRS starting up a new investigation. The first is a mandatory follow up that the working Revenue Officer or Agent places on the case. The working agent gets a feel for when they think the case is ready for review. They will literally put in a mandatory follow up. It may happen because of an event, i.e., new job. Something in the case investigation leads them to believe there will be a better time down the road to work this case. Many times the agent will place that in the file history, so the next agent who has your case will have that information.
The second type of follow up is based on your current Adjusted Gross Income (AGI). When your adjusted gross income reaches a certain level set by the agent that worded your case, the case will come back out to the field. So how can you prolong the AGI follow-up? One way is if you’re filing married, file separate tax returns if you qualify. The IRS will pick one income up rather than two. The downside to this strategy is that you may end paying higher taxes by filing separate.
Tip#2:
When you have an outstanding case with Internal Revenue Service be mindful of what tools they will use for their investigation. One of the sources they use is Accurint.com. It is a search engine that reveals detailed financial information that collection and credit agencies have been gathering for years. It would be wise to pull up your own Accurint report to see the avenues they will pursue.
Tip #3:
Have you been involved in a court case where you gave a deposition in the last few years? Through the courthouse record search, the IRS will find out about the suit. If it was a divorce or a case involving financial matters they will summons for a record of the deposition. The IRS will read the deposition to try to find out about any assets they don’t know about already.
Tip#4
Credit reports – On each case that is brought to the field, the IRS will pull a credit report. They will match up the credit report with the financial statements you provided. Here is the TIP. The IRS will summons any loan applications you submitted to see what assets you have put on your application. So make sure that you do not excluded those same assets off of the financial statement you gave to the IRS. This is one situation that can cause a problem since most loan applications are prepared to show the lender higher values.
Tip #5
The IRS will check DMV records for vehicles you may own. In addition, they will review other documents and accounts you have. A little item that the IRS is careful to examine is what you put on the information sheets stating “possible benefit of a trust or estate”. The IRS is mindful of the age of the taxpayer’s family, especially their parents. Since most people receive a little something from their parents when they decease, they will look to see if there is money to collect through the inheritance.