Questions for the Tax Lady: May 17th, 2010

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: I had a Toyota that I turned in before the end of its lease back in 1997. It took Toyota until 2008 to report the mileage to the IRS, and Toyota didn't send me anything to dispute them. The IRS now claims I own them over $800 and they ate my entire refund this year and are now saying I still owe them $300. What should I do?

I am assuming that you are talking about business miles that you deducted on your return, which you include on your tax return the year the miles were driven. I do not quite understand why the IRS would withhold your refund for a mileage issue from 1997, and highly recommend contacting them directly at 1-800-829-1040 to find out why your refund was withheld. If you need any further assistance then I would recommend talk to professional accountant, CPA or tax attorney in order to get to the bottom of this issue.

Question #2: How do I contact the Taxpayer Advocate Service?

Answer: The Taxpayer Advocate Service (TAS) is a free service offered by the Federal government, but not every taxpayer will qualify for TAS assistance. You must meet certain income requirements and be able to prove that you are experiencing an economic burden because of the IRS collections. To find out if you qualify to work with the TAS call the Taxpayer Advocate Service Case Intake at 1-877-777-4778. If you do meet their requirements, then head over to this page on IRS.gov to find a local office to contact.

IRS Seeks Volunteers for Taxpayer Advocacy Panel

According to their newest press release, the IRS is seeking “civic-minded volunteers to serve on the Taxpayer Advocacy Panel (TAP), a federal advisory committee that listens to taxpayers, identifies key issues and makes recommendations for improving IRS service.”

“The feedback and suggestions that the TAP provides us from the taxpayer’s point of view are important to sound tax administration,” said IRS Commissioner Doug Shulman.

The TAP provides a forum for taxpayers from all 50 states, the District of Columbia, and Puerto Rico to raise concerns about IRS service and offer suggestions for improvement. The TAP reports annually to the Secretary of the Treasury, the IRS Commissioner and the National Taxpayer Advocate. The Office of the Taxpayer Advocate, an independent organization within the IRS, provides oversight and funding for the TAP.

“In trying to comply with an increasingly complex tax system, taxpayers may find they need different services from the IRS,” said Nina E. Olson, National Taxpayer Advocate. “The TAP is vital because it provides the IRS with the taxpayer’s perspective and recommendations for improvements that will help the IRS to deliver the best possible service to assist taxpayers in meeting their tax obligations.”

To be a member of the TAP you must be a U.S. citizen, current with your federal tax obligations, able to commit 300 to 500 hours during the year, and able to pass an FBI criminal background check. New TAP members will serve a three-year term starting in December 2010. Anyone chosen as an alternate member will be considered to fill any vacancies that open in their area during the next two years.

Questions for the Tax Lady: January 11th, 2010

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: What is the Taxpayer Advocate Service

Answer: The Taxpayer Advocate Service (TAS) describes itself as “an independent organization within the IRS,” that helps mediate the resolution of tax debts. It is a free service offered by the Federal government, but not every taxpayer with back taxes will qualify for TAS assistance. You must meet certain income requirements and be able to prove that you are experiencing an economic burden because of the IRS collections. You can contact the TAS by calling 1-877-777-4778.

Question #2: What is the Earned Income Tax Credit, and how do I know if I qualify for it?

Answer: The Earned Income Tax Credit is a tax credit available to low income workers who may or may not have qualifying children living with them. It was designed to encourage low wage workers, while offsetting the burden of payroll taxes. Since it is a credit, not a deduction, the Earned Income Tax Credit can be subtracted directly from what you owe. For more information, including rules about qualifying, check out this article on bankrate.com.

Questions for the Tax Lady: October 19th, 2009

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: What is the Taxpayer Advocate Service

Answer: The Taxpayer Advocate Service (TAS) describes itself as “an independent organization within the IRS,” that helps mediate the resolution of tax debts. It is a free service offered by the Federal government, but not every taxpayer with back taxes will qualify for TAS assistance. You must meet certain income requirements and be able to prove that you are experiencing an economic burden because of the IRS collections. You can contact the TAS by calling 1-877-777-4778.

Question #2: What is the Earned Income Tax Credit, and how do I know if I qualify for it?

Answer: The Earned Income Tax Credit is a tax credit available to low income workers who may or may not have qualifying children living with them. It was designed to encourage low wage workers, while offsetting the burden of payroll taxes. Since it is a credit, not a deduction, the Earned Income Tax Credit can be subtracted directly from what you owe. For more information, including rules about qualifying, check out this article about the Earned Income Tax Credit on Wikipedia.

National Taxpayer Advocate Submits Mid-Year Report to Congress

The IRS posted a new press release recently announcing that the National Taxpayer Advocate Service (TAS) had delivered their mid-year report to congress earlier this week. In the report, the TAS emphasizes the importance of tax preparer oversight, improving taxpayer services, improving access to the offer in compromise program, and improving the IRS’s ability to effectively deliver refundable tax credits. You can read a segment of the release below, but the full text can be read by visiting the IRS’s newsroom.

The report notes that FY 2010 will mark the ten-year anniversary of the Taxpayer Advocate Service, which began operations in March of 2000. “As TAS enters its tenth year, both TAS and the IRS face a difficult environment for achieving what is, in essence, the same mission – ensuring that the IRS treats taxpayers fairly and identifying ways to increase voluntary compliance while addressing noncompliance,” Olson said. She identified the collection of tax revenue at a time when “increasing numbers of taxpayers have difficulty paying their daily living expenses” as a principal challenge.

The Advocate’s report, which is required by law, sets out the objectives of the Office of the Taxpayer Advocate for the upcoming fiscal year and provides substantive analysis of issues and statistical information. Among the areas the report identifies for particular emphasis in FY 2010 are the following:

1. Taxpayer Services. The report notes that the IRS created a five-year strategic plan for taxpayer service (known as the Taxpayer Assistance Blueprint, or “TAB”) in response to a directive from the House and Senate Appropriations Committees in FY 2006. The directive was originally motivated by concern that IRS taxpayer services were often ad hoc and not sufficiently coordinated or research-driven. The Advocate’s report expresses concern that the momentum to implement and refine the TAB recommendations has abated. It recommends that the IRS reinvigorate its efforts to pursue cross-functional, research-driven service improvements.

IRS Seeks Volunteers for Taxpayer Advocacy Panel

The IRS posted a new press release today discussing their need for volunteers, to assist in taking comments from taxpayers in the Taxpayer Advocacy Panel (TAP). The panel “listens to taxpayers, identifies key issues and makes recommendations for improving IRS service.”

“TAP members are your friends and neighbors, walking in the shoes of the average taxpayer. A better understanding of how to serve the taxpayer well is a key to sound tax administration,” said Doug Shulman, IRS Commissioner.

TAP provides a forum for taxpayers from all 50 states as well as the District of Columbia and Puerto Rico. TAP is a federal advisory committee that reports annually to the Treasury Department, the IRS and the Office of the Taxpayer Advocate, which is an independent organization within the IRS. The Office of the Taxpayer Advocate provides oversight and funding of TAP.

“As the IRS continues to examine taxpayers’ needs in the area of service, the Taxpayer Advocacy Panel has emerged as a vital source for gathering and providing information from the perspective of taxpayers,” said Nina E. Olson, National Taxpayer Advocate. “TAP’s role will ultimately aid taxpayers by helping the IRS to provide them with the top quality service they deserve."

To be a member of TAP you must be a U.S. citizen, current with your tax obligations, able to commit 300 to 500 hours during the year and pass an FBI criminal background check. New TAP members will serve a three-year term starting in December 2009. Anyone chosen as an alternate would be considered to fill any vacancies that open during the next two years.

TAP members are being sought for the following states: Arkansas, California, Connecticut, Florida, Georgia, Illinois, Kentucky, Maryland, Minnesota, Missouri, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Tennessee and Texas.

Alternates are being sought for: Alaska, Arizona, Delaware, District of Columbia, Hawaii, Idaho, Indiana, Kansas, Massachusetts, Michigan, Montana, Nebraska, Nevada, New Hampshire, Puerto Rico, South Dakota, Vermont, Virginia, West Virginia and Wyoming.

Applications to become a member of TAP will be accepted until April 30. Applications are available online at www.improveirs.org. Applications can also be received through the mail by calling toll-free 1-888-912-1227.