Tan Peng Kang said:
Thank you. I guess what I wanted to know is can the IRS suddenly demand in
2008 that a tax payer file his 2000 return when the IRS had never sent in
the past any notice or made any request about the old return that a
taxpayer had forgotten to file?
With other words, are there any procedures or steps of actions that the
IRS must do first (as required by the law) before demanding that a tax
payer either do what the IRS wants him/her to do in 2008 or get shot at
with a "shot gun"?
And if you have court cases to support your answer, that would be perfect.
My other question is this, can a tax payer be held liable for Social
Security taxes when the employer, for some reason, had misclassified a W-2
employee as a 1099? What is the most recent court ruling on something like
this?
.
Thanks.
So far you've gotten a lot of GOOD responses to your post. I would like to
add a bit and ask a question or two.
Your first post said that the IRS auditor was bias. I see nothing in your
second post to indicate any bias. Why do you believe the auditor to be
biased?
As to what steps or procedures the IRS must do first - it is likely that one
of two things have happened - EITHER
A - the IRS has sent notices that you have not received, OR
B - while investigating you for something more current they have discovered
prior year delinquencies.
In either case they are within their rights to enforce compliance for
however many years they feel is necessary. There is a policy position
within the Internal Revenue Manual that starts with NORMALLY they will not
go after more than six years or returns. But I am aware of NOTHING that
would stop them for going after 50 years of returns if they believe they are
justified in doing so.
In fact, depending on your circumstances they may actually be using you to
set an example. Make no mistake, this is NOT discrimination - especially if
you didn't file. And you'll never get them to admit openly IF they are
tying to make an example of you, but that wouldn't change it IF they were.
And let me be real clear here - I am NOT suggesting that the IRS is
attacking you personally and I'm NOT suggesting that they are trying to make
an example of you. I'm simply giving you my take on the situation based on
my 25+ years of dealing with the IRS on behalf of taxpayers.
I cannot impress upon you how important it is that you get professional help
with this matter. This is even more true IF they are trying to make an
example of you. Representing yourself is a recipe for disaster - get
professional help from someone who specializes in taxpayer representation.
As an EA I'm inclined to send you to
www.naea.org - the National Association
of Enrolled Agents website where you can search for a tax pro in your area.
EAs, by definition, specialize in representing taxpayer before the IRS.
However, a CPA experienced in representing taxpayers would be just as good
at this point. I would NOT engage a tax attorney just yet, until either an
EA or CPA has assessed your case. Tax attorneys have a place, but that is
usually NOT at the beginning of the process UNLESS you have reason to
believe that criminal charges may be pending.
As to whether you can be held liable for Social Security taxes - most
definately YES, in one form or another. If you were self employed you are
responsible for SE tax on your net income. If you were an employee you are
responsible for your half that should have been withheld - whether you are
responsible to the authorities or your employer is a matter for a different
discussion, but you are responsible one way or the other.
Be careful about asking for court rulings. These are very specific and
address specific cases with specific fact patterns which may or may not
match the intricacies of your situation. Not to mention that your question
is so broad that I could provide you with cites for either side - for or
against. Assessment of whether a legal ruling, or for that matter the
interpretation of The Code, Tresury Regs - whether they be perm, temp or
proposed -, Rev. Rules, Treasury Decisions, PLRs, TAMs, or whatever, are
best left to qualified professionals.
You also need to keep in mind that IF you attempt to represent yourself
everything you say or produce will become part of your file and it will be
virtually impossible for you to get professional help later on to counteract
anything that you SHOULD NOT have produced or said.
Get professional help NOW - even if it is just to help assess your
situation. Talk to someone qualified who is looking out for YOU before you
say or give anything to the authorities.
Good luck,
Gene E. Utterback, EA, RFC, ABA