OIC Fees: It Matters How you Pay

A question came up recently about whether or not a taxpayer must submit his or her Offer in Compromise fees in the form of a cashier’s check or money order as opposed to a personal check.

Just a little background first.  When filing an Offer in Compromise, you must submit two payments: one is the $186 application fee, and the other is the 20% deposit or initial offer payment.  That’s 20% for “cash offers” or the first of 24 payments for “periodic payment” offers (the difference between these two types is not relevant here and could be the subject of a completely different blog entry).  If either of these payments are missing or insufficient, the offer is almost certainly going to be returned and you’ll have to start all over again.

First of all, the IRS does not require cashier’s checks or money orders.  In fact, the instructions in the Form 656 Booklet specifically state that a taxpayer may send a “personal check, cashier’s check, or money order.”  However, what is required is that the money be available in your personal checking account when the personal check is cashed by the IRS.  Since a cashier’s check or money order is already paid for, there is no risk of insufficient funds.  Therefore, if your tax attorney asks for a cashier’s check or a money order, he is not being a jerk, he is being cautious.

IRS Updates Mobile App: IRS2Go 4.0

I don’t know about you, but when I get things “to go” it is usually some kind of delicious food tucked away in a bag that I will be enjoying at home.  It is definitely not my taxes, or my tax account, or my tax problems!  I don’t want that “to go” with me anywhere!  As you probably know, I’m not a fan of the IRS mobile app (“IRS2Go”) which was originally released in January 2011.  My dislike, apparently, begins with the name.

Today the IRS announced the release of the latest version, IRS2Go 4.0.  Maybe I’ll just let the users explain how bad it is:

    • “Doesn’t work”
    • “Neat looking app, but worthless”
    • “Crap”
    • “Disappointing”
    • “Seriously?!?”
    • “Update doesn’t work”
    • “What do you expect? It is the IRS”

There are some positive reviews, so at least some people have gotten it to work, but the average rating for all version is 3.5 and the average rating for the current version is 2.5.  It definitely looks like there are some bugs to work out in version 4.0.

I’m guessing that the most popular feature of the IRS to Go App is the Refund Status tab. It is clear from reading several reviews that people who downloaded this app are mainly interested in checking the status of their refund.  It is probably also the IRS’ favorite feature since, if it works, fewer refund watchers will be tying up the phone lines.  And while this feature existed in prior versions, you could only ascertain whether or not (and when) your refund was processed.  In version 4.0 there is new functionality that allows you to track the status of your refund much like you would track a package coming to you via FedEx.  According to the IRS it “provid[es] taxpayers an easy-to-use feature to follow their tax return throughout the process.”

Two years ago 350,000 people had downloaded IRS2Go and now apparently that number has risen to 3.5 million.  Actually, the number of users can’t be tracked; it is the number of downloads.  So the 3.5 million likely includes every time somebody reinstalls for the new tax season, and also if somebody deletes it and reinstalls it 20 times because it isn’t working.

I’m sorry for the negative tone of this post.  Maybe I just love bashing IRS tech products. But at least I’m not the only one:

Don’t bother to download.  Since the update the app doesn’t work.  Not even worthy of a star, but I’m forced to give at least one.

~ IRS2Go 4.0 reviewer, Feb 5, 2014

FATCA Marching on Despite Opposition

The Foreign Account Tax Compliance Act (FATCA) is one of the ways the US plans on ramping up collection of taxes so everyone pays his/her fair share.  The IRS sees it as an important tool in combating tax evasion, but many financial firms and individuals see it as little more than a gateway to further tax problemsand complications.

Under the proposed rules, there are requirements for individuals and requirements for foreign banks.  US taxpayers with more than $50,000 in a foreign bank would be required to report certain information on a form (Form 8938) that must be attached to the annual Form 1040.  Foreign banks would be required to, among other things, report certain information about account holders directly to the IRS.  See the IRS website for additional information.

Most of the requirements will not kick in until next year, but many businesses are expressing strong opposition to FATCA and the burdens it would create.  If they are not successful in repealing it or amending it to make it more lenient, then they at least hope for some kind of postponement to give financial institutions time to prepare.

The Misguided Appification Efforts of TurboTax and IRS

For some reason I just can’t let it go.  Tax smartphone apps are not as amazing as some would have you believe!

I came across a press release issued on behalf of RoadFish.com this morning praising IRS2Go and TurboTax’s mobile tax software called SnapTax. IRS2Go is a free app that allows users to quickly access the IRS on Twitter and YouTube, check the status of a tax refund, order transcripts, and obtain IRS news and tax tips. SnapTax costs $9.99 and apparently makes it possible to do your taxes “on the go.”

Here’s what RoadFish.com says about SnapTax:

Look, apps are where it is at now. Pretty soon, many people won’t even be using browsers any more, and will be viewing a lot of their content through apps. I know Bill Harris, the guy who started Turbo Tax. He and his company he created ChipSoft, which were acquired way back from Intuit, have been THE leader in this field since Day 1. I am thrilled they are ahead of the curve on this as well.

Ok, maybe apps are where it’s at, but it’s not where taxes should be. I don’t know much about SnapTax, but I cannot imagine why anyone would prefer to do their taxes on their phone as opposed to sitting down at their computer. Most people have what they need to file by the end of January. Are we that busy that we can’t find a couple hours between Feb 1st and April 15th to plop down in front of our computer and knock it out? Are people really going to file their taxes “on the go” in between turns in Words With Friends? I’m not sure if TurboTax is ahead of the curve on this one or if they made a wrong turn.

Here’s what RoadFish.com says about IRS2Go:

With these helpful apps, taxpayers can now spend a ton less time and money filing their taxes and more time focusing on improving their finances, things like their monthly budget, credit score, and chipping away at debt

Really RoadFish?  Did you even look at the app? How does it save you tons of time and money?

Sign me up when there’s a tax relief app with a “Pay Less Taxes” button. When it comes to apps, only 1 in 10,000 is truly useful (or fun, or serves its intended purpose). Most apps are pointless because, even though everybody wants to push their goods or services with the newest technology, you really can’t appify EVERYTHING.