It’s TaxQuips time from TaxMama.com® .
Today TaxMama® wants to talk to you about some imminent deadlines – and about the IRS dropping by your place of business.
Dear Family,
This year has flown by so quickly. I blinked and now it’s almost autumn.
First, the upcoming deadline – September 15th is the final filing deadline for calendar year (December 31st) partnerships and S corporations.
Let me be clear. There are no more extensions. So if you haven’t gotten all your information together yet – do it NOW. Even if something is missing or incomplete – work out reasonable estimates for the missing information. Include a disclosure statement with your tax return to explain which amounts are estimated, why, and how you arrived at your estimate.
BUT FILE THAT RETURN ON TIME – REGARDLESS!!!!
Not filing generates instant late filing penalties – several actually – because there are penalties for not filing the forms 1065 and 1120S, and separate penalties for not filing the Schedules K-1. This can run into the thousands of dollars.
Great news: One interesting last-minute tip. Since your 2021 business and personal returns are on extension, you still have time to reduce your 2021 taxes if you open and fund a retirement plan by September 15th (for partnerships and S corporation) and October 15th (for Schedule Cs and C corporations).
Join me for a free webinar on Monday September 12th at 3:00 pm Pacific
to learn how to open and use a Solo401k before your filing deadlines.
https://iTaxMama.com/Special-Webinar-Solo-401k
Sad news: Incidentally, if you are working with a tax professional and haven’t given them your information yet – but they have been requesting documents for months…don’t expect them to finish your tax return by the deadline. And, potentially, expect to be fired. There’s a lot of talk in the industry among tax practitioners who are exhausted and resent having to baby-sit procrastinating clients.
Moving on to more cheerful matters – the IRS is coming. The IRS is coming!
Yup. Even before Congress passed the Inflation Bill providing additional funding to the IRS for new hires and operations – the IRS has upped their field operations.
https://www.irs.gov/newsroom/understanding-how-the-irs-contacts-taxpayers-avoiding-scams-and-how-to-know-its-really-the-irs-reaching-out
Revenue Officers (collections) have started to go out into the field. They have three purposes:
- Naturally, to collect past due taxes – especially where the taxpayer has been unresponsive. In which case, the visit might be unannounced.
- A regular, scheduled visit to structure a payment plan to settle their business or payroll tax debt.
- To educate employers who are starting to fall behind on their payroll tax deposits – before they get too far behind.
Revenue Agents (auditors) are also heading out into the field – to conduct audits.
In most cases, there will be mailed correspondence before they show up. If you didn’t get any correspondence, it could be one of these reasons:
- You moved and didn’t file a change of address with the IRS.
- You haven’t had the courage to open your IRS mail and you’re waiting to show it to your tax professional.
- It could be someone from the IRS Criminal Investigation division
But if you’ve never done anything shady, I wouldn’t worry about that. - The visitor is not really from the IRS.
It’s the unannounced (or unexpected) visits that I want to talk to you about – to help you verify if they are really from the IRS. There are a lot of scam artists out there – and they are worse than the IRS.
So let’s start with what a real IRS agent will have:
- They have “pocket commission” – their official card and badge.
- Problem: Do you know what a REAL “pocket commission” looks like?
I don’t. And neither did most of the tax professionals in our Stakeholder Liaison discussion group dealing with IRS Systemic Issues.
- Problem: Do you know what a REAL “pocket commission” looks like?
- They have an HSPD12 card – that describes the agent’s height, appearance, etc.
- Problem: Again, easy to create a phony document with the scammer’s description, since most people don’t really know what that card looks like.
- Yes – it has an IRS contact number you can call to verify them. But if they are con artists, the phone number on their card will go to a friend or colleague.
With the potential to create fake ID’s how can you be SURE the person at your door really is from the IRS?
A real IRS agent will generally have information taken directly from your personal, business and or payroll tax return that you have recently filed.
No one else should have that.
There are some more specifics here
https://www.irs.gov/newsroom/how-to-know-if-its-really-the-irs-calling-or-knocking-on-your-door
If you are still uncomfortable (or start out that way), here are your options when the IRS shows up unannounced – we were assured by the IRS managers at the Stakeholder Liaison meeting that this is acceptable:
- For taxpayers – Ask them for their business card. Then, politely refuse to let them in until they first contact your tax professional – and provide your tax pro’s contact information.
- Call your tax pro immediately and sign a power of attorney so they can handle the contacts.
- Or if you want to handle it yourself, arrange to schedule a meeting at an IRS office facility. You can verify all IRS campus addresses online.
- For tax professionals – Ask them for their business card.
- Reschedule the appointment either at an IRS campus – or later, after you have had time to verify their identity objectively.
- Verify their identity. Verify that such a person really works for the IRS and ask for a description. Do this by contacting one of these IRS groups:
- The Practitioner Priority Service – if you can get through on their phone lines these days
- Your local stakeholder liaison office (you can call or fax to them).
We have been assured that, when handled politely, the IRS agent will be gracious about this delay on their visit.
But remember, if you did get advance notice and you don’t want to be facing that person alone – contact your tax practitioner immediately. That would be an Enrolled Agent, a CPA or an attorney.
The IRS does have a verification phone number – on the real HSPD12 cards. But they don’t want to make it public, for security reasons.
And remember, you can find answers to all kinds of questions about taxes and business issues, and EA Education, free. Where? Where else? At http://iTaxMama.com/AskQuestion
To make comments, please drop into the TaxQuips Forum.
