Honest Dialogue

By Antonia Martin, Tax Consultant, JK Harris and Company

Some clients just don’t believe that the IRS can and will enforce collections against them if they ignore the collection letters that keep coming in the mail.

I had one client who had not filed tax returns for a dozen years. The IRS had done a Substitute for Return* for several of the years the client did not file. (The IRS will do a Substitute for Return for you if you have not filed your tax returns. Instead of giving you the deductions or credits you may be entitled to, the IRS will file a return single with the least ideal tax situation you want to be in.) The client came to the appointment he set up with me with a letter showing he had a tax liability of $54,000. He also had a garnishment letter from his employer. I showed him on the table that comes with the garnishment notice how much of his income the IRS would “allow” him to keep and how much of this paycheck the IRS was going to intercept each week – this amounted to the client getting $179, and the IRS getting $2000.

He scoffed at me and said there was no way that would happen, that it could not be that bad. He said I was crazy to ask the amount of money we needed to do all of his past due tax returns and to get a levy release on his wages. He left the office disgusted with me and disbelieving the IRS would take that much of his income.

The very next week, he called me in a panic because his employer had garnished his wages exactly as I had informed him they would. He immediately decided to hire JK Harris to help him get all of his tax returns filed and to get the wage levy released.

* Important note about substitute for returns – it is very important for you to go back and file for any years the IRS may have filed SFRs for you. In some cases, our clients have found they owed very little back taxes – in other cases they owed nothing.