Merry Christmas LostHead Kinsei

[Joey Smith]

Kensei
-
Joined: 30 Jan 2008
Posts: 978
Location: Great Lake State
Posted: Wed Dec 24, 2008 12:59 am Post subject: Letter 1058 - FNOIL received

Hey all. Recently received a Letter 1058 in my wife's name. Here's the intro:

“CALL IMMEDIATELY TO PREVENT PROPERTY LOSS; FINAL NOTICE OF INTENT TO LEVY AND NOTICE OF YOUR RIGHT TO A HEARING.”

Yippee, that is a cool Christmas present, eh? Not. I turned it over, it has the $5000 civil penalty on the back, plus interest. The front side uses 6330 and 6331 to claim authority for this, mention we never contacted them or paid the tax due, etc. We've obviously contacted them plenty.

So, I did some calling. All told, I was on the phone over 2 hours with 3 areas. Good grief. The first number, on the form, I called and waited over 40 minutes, then was trying to get Skype and Callgraph working, but no headset so used microphone. The problem is that the lady on the phone could hear HERSELF as she talked. I said I was planning to record the call, she paused and said, 'That's illegal, it's a federal offense. I'm going to have to hang up.' I stopped it but she could still hear her own voice talking and I kept trying to adjust things but anyway asked for another number, then called that one. It isn't truly 'illegal' if I notify the person first, right? She sort of freaked out after that.

I called another woman about the problems with our account. To summarize, here are some of them:
1. Frivolous return penalty applied in error - twice
2. Somehow filing status has changed from 'married joint' to 'married separate'
3. Somehow there are various 'self employment income' and 'self-employment' entries on the account, not from us.
4. Our Account transcript has '00' in the exemptions part - it is supposed to have '02' there, which is what my third call person clarified.

I took a long time to type what I had written, with times, specifics, etc. so I wouldn't forget. Okay, back to woman 2. I reviewed the situation, incorrect data, the letter, etc. She said recently a 'letter 86C' was mailed out and to watch for it for the next step. She also recommended contacting the Taxpayer Advocate due to all these problems and delays, and no progress.

Called #3, back to 'Collections' about stopping that 'Levy' final notice. The man there was very helpful, told him the same story too, he noted that our account had some odd codes on there, he'd check with supervisor, guess what they found: there is a code on there for a ‘Trust Fund Recovery Penalty’ - ??? He said this is when an officer or other person responsible for withholding taxes on wages , FICA and trust fund payments keeps the ‘withholdings’ instead of transferring them to the IRS. What in the world is that? He asked if we administered payroll, or trust funds, etc., and I clarified that neither of us are involved in that at all – the ‘withholdings’ are what our refund claim is for, they are our money. He said that was very strange, didn't make sense.

I of course reviewed the criteria at 6702(a), how in order to apply the penalty a return would have to be missing needed info so you couldn’t calculate the assessment, or the assessment is in conflict with the figures in the return, THEN you also had to take some ‘position’ that was frivolous or the return had to have a desire to delay/impede federal tax law. I said if you just look at our 1040 return, it obviously doesn’t meet the criteria, and we aren’t the type of ‘person’ defined at 6671(b) – so we believe this penalty was ‘proposed’ in error. We have submitted numerous clarifications, and have asked for proof and clarification numerous times, how could the return meet the criteria, yet we have heard NOTHING in reply. The penalty is incorrect, they skipped the starting criteria for it, and never mentioned what secret ‘position’ we could have taken. How can we possibly know what it is, or even attempt to clarify or correct what is never described? Nobody can fix a problem that is unknown.

He was helpful, didn't harass us or anything. He further clarified that we need to re-contact Collections dept. within 30 days to inform them of our progress following the instructions in letter 86C, which they recently mailed out. This is so they will not levy from the notice they sent, but will give more time while the situation is being corrected. I thanked him, he was very helpful, now we await letter 86C for the next step to clean up this mess! Good grief. That 'left hand-right hand' disconnect is true!

So, how did we get charged a 'Trust Fund Recovery Penalty' when we don't administer them, don't operate payroll, don't have 'employees', etc.? That's really odd.

Oh, forgot the bottom of the 1058 letter says:
" We look forward to hearing from you immediately, and hope to assist you in fulfilling your responsibility as a taxpayer."

[The Observer]

I don't how to make heads or tails out of the "information" that Kensei supposedly received from "Collections" that he was assessed the Trust Fund Recovery Penalty. Either the IRS employee was totally mistaken, or Kensei was talking to one of the people who work for the private collection companies contracted by the IRS. In any event, there is no way that a 1040 filing, no matter how frivolous it may be would ever qualify for a trust fund penalty assessment. It isn't a trust fund tax or otherwise known as a "collected" tax by a third party on behalf of the government.

This is not to say that Kensei could have been assessed the penalty simply because he was involved with in a situation where he was found to be a "person" that met the criteria of 6671(b) and failed to pay over trust fund taxes under the criteria of 6672. If the IRS found that he had authority to pay the trust fund taxes and failed to do so willfully for a company that he worked for, they may have very well had asserted the penalty against him. But that is a separate issue from the 1040 issue.

[LOBO]

It's possible that the CSR misread the codes. But if he did, it's hilarious that he has the lostheads in the thread running on a wild goose chase.