In Which the IRS Affirms My Libertarianism

Monday, November 8th, 2010

So as I noted in April and August, the IRS seems to be having a problem with my 2009 tax refund. It’s now November. And I still haven’t received it.

To recap: I filed well ahead of the deadline. But I e-filed, and a couple days later received a response that there was a problem with my Social Security number. So I called the IRS help line to figure out what I needed to do. They told me to print out the return and send it through the mail. So I did.

Months passed. Nothing happened. I called a couple times over the summer. They said my return was still being investigated, but they couldn’t give me any details. I asked if there was anything I could do to expedite the process. They said to call back if I haven’t heard anything in 90 days. Both times, I made sure the IRS knew that I have moved since I filed my return, and gave them my new address.

Fast forward to last month. I called a fourth time to see what’s happened to my return. The guy on the help line again said that it’s still being investigated. But this time, he also said the IRS did send me a notice about my account in early May, and that I ignored it. I told him I wouldn’t have done that. I was waiting for my refund. He asked if I’ve moved. I replied, with exasperation, that I had moved in late May, and that I have noted this and given my new address each time I’ve previously called. He said he had no record of my new address, but that he would change it in the system.

Of course, even they did send a notice, I didn’t move until the end of May. So I still should have received it. I also filed a change of address form with the U.S. Post Office. All of my other mail was forwarded (save, curiously, for a parking ticket notice from the D.C. government. But that’s another story). Anyway, IRS guy says he will generate a new letter telling me the status of my return (he again says he can’t tell me what’s wrong with my return over the phone). He says I should receive it within a week. I have him read back my new address and confirm that this is the address to which the notice will be sent. All is correct.

As of last week, the letter still hadn’t arrived. So last week, I called back. This time IRS lady finally told me the source of the original problem: Last March, someone else filed a return under my Social Security number. The IRS received that return before they received mine. She then said, “You should have sent proof of your identity and an identity theft form back in May, when we sent you a notice asking for it.” I replied, trying with all my might to avoid using profanity, “No one ever told me what the problem was. It is November. This is the first time I’ve been told that someone else filed under my Social Security number. I never received any letter in May. Which is what I told the guy I talked to last month, and everyone I talked to before that. I also never received the notice I was supposed to have received within a week of my last call.”

After much hemming, hawing, checking, and putting me on hold, here’s apparently what happened: Someone else filed a return using my Social Security number. So because there was already a return on file under my number, my return was rejected. According to the woman I spoke with today, when I called the help line to ask what to do after the initial rejection, they should have told me to send proof of identity when I sent my return by snail mail. But they didn’t. She also said there was no reason why they couldn’t have given me an explanation the multiple other times I called. I asked, “So why didn’t they?” She answered, “They should have.” Well, okay then.

So what about that letter last May, the one the IRS guy last month said I should have responded to, subtly implying that this was all my fault?

It seems that when more than one return is filed under the same Social Security number, the address on the return the IRS receives first is the address they associate with the account. That’s where all the notices go. Even when it makes no sense to send notices to that address.

So when I sent in my return via mail, and it didn’t have the proof of identity with it (because no one at the IRS help line told me to do so), they processed the letter as just another tax return, not a return re-filed because of a problem with a taxpayer ID problem. When they realized someone else had already filed under my number, they sent the response letter asking me to prove my ID to the address of the person who wrongly filed under my Social Security number. I asked the IRS lady why they would do this. I can understand sending a request for proof of ID to both addresses. But it’s rather stupid to send a response to my tax return to the address of the other person. Especially if it’s a response asking for proof of ID. She again replied, automaton-like, that all correspondence goes out to the address associated with the account. Even, I guess, when it makes absolutely no sense to do so.

As for the letter I should have received within a week of my call on October 6, I finally received it on Saturday, November 6. Good enough for government work.

So I now have to verify my identity by sending in copies of my driver’s license, passport, etc. I also have to send in another copy of my return, but also note (she said use a sharpie and write in all caps if necessary) that this is a copy of a return already filed, lest some dolt at the agency actually mistake it for a third, separate person trying to file under my Social Security number.

Even after I send all of this, I was told it could be 30 days before I get a response. And that’s just for the acknowledgment. It’ll likely be well past Tax Day 2011 before they sort this out and issue my 2009 refund. At this point I’ll be pleasantly surprised if I ever get it.

I keep pretty close track of my credit, and it doesn’t appear that anyone has stolen my identity. The most likely explanation is that someone with a Social Security number similar to mine accidentally transposed a couple numbers (for all I know, that person is fighting like hell to figure out what’s going on, too). I obviously don’t fault the IRS for the fact that someone else filed under my number. But I sure as hell fault them for everything that’s happened since. If someone had stolen my identity, and if I didn’t regularly check my credit, the thief could have done a hell of a lot of damage by now. The IRS could have warned me about it all last May.

The punchline is that as I was filling out my taxes this year, I got a “tip” suggesting that because I have multiple sources of income, some of which aren’t subject to withholding (speeches, freelance work, etc.), I should consider paying my taxes quarterly, and may suffer a penalty next year if I don’t. God forbid the government doesn’t get its money forthwith. But when they have your money? You’ll get it when they’re damned good and ready.

It’s not a huge amount of money. I try to adjust my withholding to come close to breaking even. But it’s enough to make me irritated that I still haven’t gotten it back. And yeah, it’s also the principle of it, knowing that not only is this incompetent bureaucracy making me jump through hoops to get back my money the government is holding, but my tax dollars are paying for my privilege of jumping through aforementioned hoops.

I’d rather a mugger have just taken the money from me. At least a mugger doesn’t bill you for his services.


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75 Responses to “In Which the IRS Affirms My Libertarianism”

  1. #1 |  CJJScout | 

    So typical. Long story short, they audited me but nobody knew about it. Said they notified me about via mail, but I had moved and didn’t get anything. My accountants have been on it for about 10 months now. I have a federal tax lien of over $100k filed against me. It was closer to $200k, but they graciously applied some refunds to that amount.

    Now, I’m appealing through TAG (Tax Advocacy Group), another gov’t institution set up to help you navigate the IRS.

    How’s that for efficiency?

  2. #2 |  Boyd Durkin | 

    Taxes?

    Handing over billions to their buddies AND ruining the economy AND printing money at will AND borrowing endless amounts of money…and what the hell…AND not having even the slightest intention of ever actually balancing a budget WHILE collecting taxes is one of the most obscene things the US Government has ever done. YOU have to pay (and your family suffers), but what the US Gov collects means nothing to them.

    Then some moron tells you “We still pay less than Sweden.” WTF?

    Just in case there are any Republicans who still believe they are fiscally conservative: The Republican House will do nothing to balance the budget or reduce spending. At most they will try to extend limited tax breaks…which does next to nothing unless combined with spending cuts.* Republicans are already himin-and-hawing over exactly what they would cut–choosing to close their eyes and chant “must extend Bush tax cuts.”

    Gold at an all-time high ($1400+). Crazy, stupid, irrational gold bugs! Don’t they know anything?

    *Yes, I’ll take any chance to keep more of my money but I still know I’m on an accelerating runaway train.

  3. #3 |  Boyd Durkin | 

    The great thing about the IRS is that if they make a mistake it is most likely covered by a law that says you’re still liable.

    “Sorry, we goofed. But we passed a law amongst ourselves saying it doesn’t matter. It’s for the children.”

  4. #4 |  perlhaqr | 

    Why the hell should I have to hire an expert merely so I can comply with the law?

    I’ve found it’s often financially a win to pay an accountant to do your taxes, if they’re even slightly complicated or you run your own business or own property. The first year I hired one, she cost me $250, and saved me $7,000 over what I had calculated my own taxes to be. Which was a worthwhile expenditure of $250, to say the least.

  5. #5 |  Boyd Durkin | 

    Croaker @ 44 is talking about the following:

    http://tinyurl.com/2fyzok5
    http://tinyurl.com/2fcd5t9

    Yes, it is Alex Jones, so you can take it as you will.

    However; when (not if) the US Government screws the peasants hard to get out of debt, it will be a lot like this. Then they will start creating debt again.

  6. #6 |  Jim Collins | 

    Three words.

    National Sales Tax.

    Plain and simple. No more tax returns, no more IRS intruding on your life.

  7. #7 |  KristenS | 

    Sell the debt to a collection agency. Let’s get some pressure on those deadbeats!

    I love this idea!!

  8. #8 |  Dante | 

    Reading stories like this one (Radley’s Tax Return problem caused by IRS incompetence/stupidity) makes me question why:

    Government employees make more than the private sector, and

    Government retirement/pensions are better than the private sector, and

    Government health care is better than the private sector.

    Stop calling it public service. It is self service.

  9. #9 |  Hunter | 

    Don’t forget your congressman. They have people who focus on constituent services. They idea being the person is grateful for the service of navigating the system the congressman helped to create that they’ll vote for him/her. I know heresy here but it is an available resource.
    You might not want to mention what you write about and be sure to say you love Big Brother.

  10. #10 |  random guy | 

    This past year I filled federal online, went to do the same for NC income tax. When I went on their website, I found that it had no encryption of any kind and would only allow direct deposit from bank accounts. I would have to enter in bank account and routing numbers on an unencrypted website. Yeah I sent that one in by mail, which either the post office or the Dept of Revenue lost. Five months later I get a letter saying my taxes are due with a late fee and that at six months after the (initial) due date I would be given an additional fee.

    Ughhh.

  11. #11 |  Boyd Durkin | 

    Your tax dollars at work: Dept of Ag teams up with Pizza Hut and Dominos to sell more cheese. You can already guess why.

    http://www.nytimes.com/2010/11/07/us/07fat.html?_r=1&ref=general&src=me&pagewanted=all

    Obviously there’re a ton of these, but this is an example even most Americans can understand.

  12. #12 |  lunchstealer | 

    The accountants’ lobby just luuuuurves the IRS and its customer service guys. They have all sorts of very sensible sounding rationalizations for making the tax code as complicated as possible, but when it comes down to it, it’s all about generating a market for their services.

  13. #13 |  Leon Wolfeson | 

    Radley;

    The problem is your tax codes are too complex.
    Also, your post is long and boring.

    No offence.

    (UK tax? Er, well, PAYE works fine for the contract jobs, for the rest there’s a two-page form I fill in once a year. That’s IT – Technically PAYE is a withholding scheme, but it’s based on a single, easy-to-check code and there’s no basically no withholding outside PAYE!)

  14. #14 |  Nobody special | 

    If you never do get resolution (which is a distinct possibility) then here’s what you do:

    1. File a 1040X for 2009 and indicate that you wish to apply your refund to your 2010 taxes.

    2. Cut your withholding down so that you owe, but don’t owe quite enough to incur a penalty. You NEVER want a refund. Ever. You always want to owe a little. That then allows you to apply the credit from 1.

    3. In your 2010 taxes, simply apply the credit from 2009 that you gave yourself. Since you end up owing (see #2) you end up writing a smaller check by the amount that your 2009 refund should have been. Presto! Problem solved, unless you’re due a refund this year too, having cut your withholding (see #1) so late in the year. If you’re due a refund this year and don’t receive it again, then make sure that for 2011, you owe more than the 2010 refund you didn’t receive. Then you can do the same trick again, filing a 2010 1040X to apply the credit to 2011.

  15. #15 |  v ~ | 

    it’s worth a lot to have an accountant prepare your taxes Radley, especially if you’re in any way self employed. said accountant would be responsible for finding out what’s up w/ your refund cheque if you don’t receive it in timely fashion. there’s also less of a chance that you’ll be audited if you have an accountant file your taxes. i love mine. she’s super awesome and absolutely on it. nice to have the process be pain free. maybe next year you’ll be inclined to agree :)

  16. #16 |  Bergman | 

    I wonder what would happen if you deducted the return the government owes you from what you pay next year? The books would balance then, after all…

  17. #17 |  Max J. | 

    And of course, this is a universal gov’t value. Every serviceman knows how hard it is to recover your money when you file a pay inquiry, which always miraculously takes weeks or months longer than the instantaneous shitstorm that results if the military thinks you owe it some cash.

  18. #18 |  Graham Shevlin | 

    Most of this nonsense could be swept away if the tax code was simplified by the removal of just about every deduction and special loophole. In the UK, where I used to live, the government simplified the tax system enormously in the 1980s. One of the major changes was the gradual removal of the mortgage interest tax deduction, which was a classic example of the Law Of Unintended Consequences.
    The challenge in the USA is the checks and balances system of government, which, coupled with the clout of the lobbyists for lawyers, accountants etc. who do very nicely out of the current byzantine code, makes real reform unlikely Any Time Soon.

  19. #19 |  bitsnbytes | 

    The IRS is supposed to pay you interest if they don’t process your refund in a timely manner, so go ahead and tell them you want it. The delay is due to their mistakes, and they should acknowledge it and pay up. It’s no problem for the government; they’ll just borrow a few bucks more from China.

  20. #20 |  The Liberty Papers »Blog Archive » If The Gov’t Doesn’t Pick Up The Trash, It’s Rat-Infested Black Plague For Us All | 

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  21. #21 |  Pete | 

    I waited one solid year for my first time homebuyers tax credit. April 29th 2009 to May 1st 2010. I really could have used that $8500 the first year I owned the house to buy furniture and maybe stimulate the economy. Instead by the time the check showed up, I had cleared myself of all debt and socked the money away instead.

    Why did I have to wait? Because my previous address was a PO box. That was enough to get my 1040X flagged for investigation.

  22. #22 |  Toastrider | 

    My father works for the IRS.

    Everything Radley and the commenters have said?

    IT’S ALL TRUE.

    (My Dad’s not stupid. Really, he’s not. But he’s looking forward to retirement, because he’s tired of dealing with a tax code which is basically nothing but loopholes, dodges, and stupidity.)

  23. #23 |  Kim | 

    My mom is going through almost the exact same thing. Unfortunately, she was depending on her refund months ago and keeps getting the run around. There should be a way to gain interest on this money they are holding from her, just as they would have done to her, had the situation been reversed.

  24. #24 |  KTax | 

    This exact thing has happened to me. I filed for the home buyer credit. I just figured they were reviewing my information as everything I read from other people basically said it took them 8+ months to get their refunds.

    I called back in July and the girl I talked to couldn’t figure out what was wrong and would have the person working it contact me in 45 days. I also verified they had my current address as I had moved in December. Nobody ever contacted me. I called again in september. Same deal.

    I get a letter saying my return was changed because of information I provided. I didn’t provide anything but again thought it was because of review of the home buyer credit. The refund amount was still the same and everything else matched up. It said it would be 2-3 weeks to get the refund if I hadn’t already received it.

    Come December and I still hadn’t received it so I called again. This time the lady tells me it was direct deposited in early November. I said, uh, no it wasn’t and gave her my account number. It wasn’t even close to the number where they deposited the funds. She asked if I had filed two returns then if I was the victim of identity theft. No and no were my answers. She then send it back to the person who processed the returns for review.

    Things just don’t sound right so I call back. This time I dig for more info. They had a return from someone on the other side of the country and one from me under my SSN. I was able to get the bank info and street name of the other person.

    I really hope this all just means the other person goofed with his SSN or the tax agent entered something in wrong. Because the other return didn’t come in until late March, I’m optimistic it was just a mistake. A thief would want to get it in as soon as possible to beat the real return.

    Never in 7 months had I received any communication from the IRS regarding two returns for my SSN!

    What really gets me about this whole thing is it seems they did figure out my tax return was the correct one since they sent an adjustment letter to me with all my info but instead of mailing a check, they direct deposited it to the account on the other return!!!

    I pay estimated taxes because of my side business. I’ll be sending in my taxes by January 31st with what I owe from now on. This was a special case because of the credits. I always aim for 0 balance.

  25. #25 |  Dear IRS: This Is Why We Hate You | The Agitator | 

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