| Ya, that's right. The IRS is known for completing what | | | | "Substitute Return" for you, the only thing you can do, |
| they call a "Substitute Return" for tax payers and | | | | is to file your own tax return or accept what the IRS |
| sending a notice to let you know how much you owe | | | | says is your tax liability.. |
| the Department of the Treasury. | | | | It is always better to file your own tax return, |
| The tax client kept saying, "How could they levy my | | | | especially if you received 1099s, because the IRS is |
| bank account, I never filed the return" | | | | NOT aware of all of your legal deduction. |
| It took a lot of explaining before she calmed down. | | | | The IRS computer receives the W2, bank interest, |
| I helped her to understand that when she worked as | | | | mortgage interest and additional information each year |
| an Independent Contractor, the company that she | | | | and tries to match it with a return. If the taxpayer has |
| provided services for, filed a 1099. On this 1099 they | | | | not filed a return, then the computer starts to send the |
| reported that they had paid her $26,000 for | | | | tax payer notices in the mail, telling them that they |
| non-employee services. | | | | need to file a previous year tax return. |
| I also explained, that more then likely, she had a | | | | At some point, an IRS human gets involved and that's |
| savings account at the bank where she cashed her | | | | when the tax payer's troubles become more serious. It |
| checks in amounts over $2,500 (which is reported to | | | | will be a matter of time before the IRS will garnish your |
| the IRS) and the bank had reported "Interest" earned | | | | wages or levy your bank accounts. You usually will |
| from her savings account, on a 1099 INT, to the IRS. | | | | have 21 days to respond before the bank sends ALL |
| She admitted that she had a savings account and that | | | | of your monies from your checking and savings |
| she often cashed checks in amounts over $2,500 at | | | | accounts, to the Department of the Treasury. And |
| one time. | | | | your employer payroll department, should give you |
| Once she understood that companies, banks, credit | | | | notice that they have received a wage garnishment |
| unions, financial institutions, mortgage lenders and | | | | order from the IRS. (If you haven't move you will |
| employees report certain information to the IRS, in | | | | receive a notice in the mail as well) |
| order to legally take deductions -- she calmed down | | | | Filing past due tax returns is a necessary part of life, |
| considerably and asked what to do next. | | | | unfortunately, it only gets worst with the penalties and |
| In cases like this, when the IRS has completed a | | | | interest. |