Frustrated with the California FTB?

Are you frustrated with California’s Franchise Tax Board? The Sacramento tax collectors at the Franchise Tax Board must have frustrated, or possibly scared the poop out of someone recently with their collection efforts. For obvious reasons, in a story not widely publicized this week, someone recently took FTB tax relief to a lower level.

Earlier this week a package sent to the Sacramento FTB office containing a brown liquid with a strong odor required the Sacramento Metro Fire Department to be summoned. Franchise Tax Board personnel, possibly working to assess and collect taxes against the sender of the anonymous package, had to emerge from the bowels of their Sacramento taxing office as a level two hazmat emergency caused an evacuation. The cause … dog poop!

Based on the stress and sleepless nights caused by FTB tax audits and Franchise Tax Board tax collections, I’m surprised it was only dog poop that was sent. Apparently, you can order a variety of crap through the internet. Literally, ranging from elephant crap to cow dung.

Obviously, these types of tax relief tactics are not tax relief at all. They’re a useless waste of time and dangerous. The sender will also likely be in more trouble now than they would have been had they used actual tax law strategy to resolve a tax problem and build a collection defense. Using legitimate legal means to resolve a tax debt will often relieve the stress caused by the taxing agency whether it’s the FTB or the Internal Revenue Service.

The IRS is Confused Enough on their Own; Don't Make it Worse

Modesto, CA

Good thing I have this blog as a place to vent my frustrations with the IRS.  It has been like my therapist over the years.

I can really identify with Robert Wood’s article today about 1099 forms.  It was obviously written from the perspective of a seasoned (and perhaps a bit jaded) tax veteran who doesn’t really trust the IRS to get things right.  Basically Mr. Wood is of the opinion that if you do not receive a 1099 that you expect to receive, you might want to think twice before calling and asking for it.  Why?  Because you don’t need the actual form in order to file your taxes, as long as you were conscientious enough to track all of your income independently.  You just need the figures.  And if you happen to request a copy of something that was already issued, or is already queued up to be issued, there is a real chance that the 1099 could be sent out twice.  Of course if you get a duplicate 1099, you are smart enough to recognize it as a duplicate, but the same cannot necessarily be said for the IRS.  And if the IRS counts double the income, then there’s a problem.

Yes, it can be very frustrating dealing with the IRS.  All that hype about how difficult the 2015 tax season will be — I don’t think it’s hype.  When calling IRS service centers, I am witnessing hold times that are longer than I can ever remember.  I recently spent an hour and a half on hold with three different phone reps trying to get through to the Collections Department (ACS).  I dialed ACS directly, but each time I was told that I had not reached collections.  I think what happens is, if the phone lines are extra busy, callers are automatically re-routed to non-ACS service centers.  But the system doesn’t alert you when it is doing this, so you are forced to wait until somebody picks up.  In my experience, the Practitioner Priority Service line is not any better.

I’m done venting now, thanks for listening.   See you next week my therapist-blog.

New Modesto tax relief announced

The City of Modesto recently announced details of a new tax relief and cash incentive program to lure businesses to downtown Modesto. The tax breaks apply variably to new businesses and existing businesses.

The new Modesto tax relief program will be available to businesses located on 10th Street between K Street and H Street; 11th Street between K Street and I Street; and J Street between 9th Street and McHenry Avenue.

New Modesto retail businesses will be eligible for a full refund of Modesto City mill taxes and local sales taxes for the first year of business. Existing Modesto retail businesses that extend their hours will be eligible for a refund of Modesto local sales tax only collected during the extended hours for one year.

The City of Modesto is also promoting cash incentives for job creation in the downtown Modesto area for both retail and non-retail businesses. Other incentives are available for new developments and physical improvements. Full details of Modesto’s business and development incentive program are available on the City of Modesto’s website.

With an overall improving economy it’s good to see local government risk a short-term loss in tax revenue for the long-term impact new businesses may bring. Hopefully for Modesto, the gamble pays off.

Best IRS phone scam – 844-271-8465

I recently received an email from a tax client with a very serious tax problem that my tax law firm has been handling. My tax client was very concerned that the Internal Revenue Service left him a threating message on his home telephone number. The telephone number that my client was to call back to speak with the IRS was 844-271-8465. Since my client actually has a serious tax problem, and since he was smart enough to hire a tax attorney to fight for IRS tax relief, he rightfully contacted me. Based on the stage of his tax problem, he wouldn’t be receiving any calls from IRS collections.

I told him that it was likely a scam. He was adamant that it was not. He said that he called the number and it was definitely IRS collections and he hung up immediately. Out of curiosity I called the number. When calling, the number did sound like the IRS collection line to the untrained ear. The call started with a “welcome to the IRS” prompt. “Push one for a business issue, two for a personal issue” or something of the like. The recording sounded like it was actually recorded from a phone calling the Internal Revenue Service. Then, the phone went immediately to a person without me needing to push a button. Because I didn’t have to wait an hour or two to speak with anyone, this was a huge red flag that this was not an IRS number.

The person who answered my call had a very thick accent, didn’t introduce themselves or provide me with a federal identification number. The person who answered the phone instantly raised his voice and told me that I owed the IRS and I had to pay him. I found this laughable because I was calling from a blocked telephone number and I didn’t tell him who I was. I asked him for his name, identification number and what Internal Revenue Service collection unit he was in. He fumbled a bit and said, “um … you can call me ‘Jack’”. He also told me that he didn’t have to provide me with his identification number and again demanded a payment.

Based on the absurdity of this joker, I’m surprised that anyone would be duped by this scam. But, apparently some people are indeed being scammed. According to the Treasury Inspector General for Tax Administration, they are aware of nearly 3,000 victims who have collectively paid over $14 million as a result of this type of IRS scam.

The IRS has been warning of such scams for the past couple years now. I think I have had a call or two myself, between other scams to update my computer, or lend money to a Nigerian prince. But this is the first scam that I’ve experienced where the voice prompts for the number imitates the actual Internal Revenue Service collection number voice prompt. I’m sure it’s been going on for a while as the IRS reports that the caller identification for these numbers also reveal that the number belongs to the Internal Revenue Service or other law enforcement.

These scammers may be scary and persuasive if you, like my tax client, actually have a legitimate IRS tax matter you are trying to resolve. However, if you know that you don’t have tax issues you should not be swayed by these scammer’s tactics. If you’re not sure if you have tax problems, this may be the time to confirm whether you have any lingering tax issues. Our tax attorneys are located in Modesto, California and Sacramento, California. We can help you determine if you have a real tax issue or help you get the tax relief appropriate for your situation. Please call us at (800) 454-7043 for your free consultation.

2014 National Taxpayer Advocate Report

It’s a little bit (ok, a lot bit) frustrating reading the National Taxpayer Advocate’s annual report to congress that was released today.  Of course my frustration is with the IRS, not the Taxpayer Advocate.  It’s pretty much the same report year after year.  The IRS is severely understaffed and underfunded, and its employees are less than qualified.  The level of service is reaching abysmal levels and still dropping.

This year the Taxpayer Advocate applauded the IRS for adopting a Taxpayer Bill or Rights administratively, but is still pushing for it to be enacted legislatively so that it really has some “teeth” and so that it becomes a permanent fixture that encourages voluntary compliance.

One point that evokes an abundance of frustration for me is the “absence of studies to determine whether existing penalties promote voluntary compliance.”  What this means in plain English is that the IRS has been punishing Americans with penalties as long as anyone now alive can remember, but the IRS has done relatively little to determine if these penalties actually work.  This is the functional equivalent of building a castle on sand or on an active volcano.  And if you think this is a minor problem, you’ve probably never had a tax debt that has tripled in size due to penalties and interest.  Furthermore, you’re probably unaware of this little factoid:

The number of provisions in the Internal Revenue Code that either authorize or require the IRS to impose penalties has ballooned from 14 in 1955 to over 170 today.

A penalty is considered effective if it promotes voluntary compliance.  In other words, a penalty (or all the tax penalties combined) should cause taxpayers who are on the fence about paying to decide that they will pay voluntarily rather than expose themselves to IRS enforced collections.  And the IRS needs to strike the right balance: not too severe and not too light.  That’s not an easy task, but the IRS does not appear to be taking it very seriously, according to the Taxpayer Advocate.  Ever heard of the IRS Office of Service-wide Penalties?  Of course you haven’t because it’s a 6-man operation tucked neatly out of sight that hasn’t answered to Congress in over 20 years.

On a positive note, I am very happy with my own direct experiences with the Taxpayer Advocate Service (TAS) recently.  I had previously been told that the TAS would not provide assistance to taxpayers without the presence of an IRS levy or threat of levy (or other adverse action).  And even then, I was under the impression that TAS may not take a case without the presence of some sort of delay.  However, I have noticed that the TAS intake department has become quite a bit more liberal.  In fact, I have a couple cases that the TAS gladly accepted where there was no financial hardship whatsoever, only delay.