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IRS LIENS IRS AUDITS UNFILED TAX RETURNS
Federal Tax Liens are public records that indicate The IRS may file on "SFR" (Substitute For Return) Tax
you owe the IRS various taxes. They are filed The IRS can audit you by mail, in your home, Return for you, if you fail to file a return. This is the
with the County Clerk in the county from which or in your office. Typically, correspondence IRS's version of an unfiled tax return. Because SFRs are
you or your business operates. Because they are audits are for missing documents in your tax filed in the best interest of the government, the only de-
public records, they will show up on your credit return that IRS computers have attempted to ductions you'll receive are standard deductions, no per-
find. These usually include W-2's and 1099 sonal exemption for spouses, children, interest and taxes
report. This often makes it difficult for a taxpayer on your home, cost of any stock or real estate sales, and
to obtain a financing on an automobile or a home. income items or interest expense items. This
type of audit can be handled through the mail business expenses, etc. will be applied
Federal Tax Liens can tie up your personal prop-
erty and real estate. Once a Federal Tax Lien is with the correct documentation. The IRS office
filed against your property you cannot sell or audit is usually with a Tax Examiner who will IRS PENALTIES
transfer the property without a clear title. Often request numerous documents and explanations The most common penalties are: Failure to File and Fail-
of various deductions. This type of an audit ure to Pay. Both of these penalties can substantially in-
taxpayers find themselves crease the amount you owe the IRS in a very short period
in a Catch-22 where they may also require you to produce all bank re-
cords for a period of time so that the IRS can of time. To make matter worse the IRS charges you in-
have property that they terest on the penalties. Many taxpayers often find out
would like to borrow check for unreported income. The IRS audit
about IRS problems many years after they have occurred.
against, but because of the schedule for your home or office should be This causes the amount owed to the IRS to be substan-
Federal Tax Lien, they taken more seriously due to the fact that the tially greater due to penalties and interest.
cannot get a loan. IRS Auditor is a Revenue Agent. All IRS audits
should be taken seriously because they often
lead to other tax years and other tax deductions
INNOCENT AND INJURED
not originally stated in the audit letter. SPOUSES
If you sign a joint return, the IRS may be able to collect
IRS LEVY any tax relating to that return from you - even if your
An IRS levy is the actual action taken by the IRS I R S S E I Z U R E S spouse was the one who reported incorrectly. However,
to collect taxes. For example, the IRS can issue a The IRS has extension powers when it comes to you may qualify for relief.
bank levy to obtain your cash in savings and Seizure of Assets. These powers allow them to
checking accounts or the IRS can levy your wages seize personal and business assets to pay off You may be eligible for Innocent Spouse relief if you
or accounts receivable. When the IRS levies a outstanding tax liabilities. This occurs when meet the following conditions:
bank account, the levy is only for the particular taxpayers have been avoiding the IRS. The IRS ♦ You filed a joint return on which there was an un-
day the levy is received by the bank. The bank is derstatement of tax due to an erroneous item relat-
attempts to collect amounts owed with a seizure
ing to your spouse.
required to remove whatever amount is available as the ultimate act of their collection efforts.
to your account (up to the amount of the IRS levy) ♦ You didn't know, and had no reason to know, about
the understatement when you signed the return. It
and send it to the IRS in 21 days unless notified WAGE GARNISHMENT would be unfair to make you pay the tax
otherwise by the IRS. This type of levy does not
The IRS wage garnishment is a very powerful
effect any future deposits made into your bank Innocent Spouse relief may be available even if you're
tool used to collect taxes owed through your
account after the 21 days unless the IRS issues still marred to, and living with, the spouse who should
employer. Once a wage garnishment is filed
another bank account levy. An IRS wage levy is have reported the additional tax.
with an employer, the employer is required to
different. Wage levies are filed with your em-
collect a large percentage of each paycheck. If you have an unpaid tax bill from prior years, the IRS
ployer and remain in effect until the IRS notifies
The paycheck that would have otherwise been can keep your refund for the current year as a payment
the employer that the wage levy has been released.
paid to the employee, instead will now be paid on that liability. Your refund can be applied against un-
Most wage levies take so much money from the
to the IRS. The wage garnishment stays in ef- paid child support, spousal support and student loans. If
taxpayers' paycheck that the taxpayer doesn't have
fect until the IRS is fully paid or until the IRS the IRS has applied your share of a refund against a li-
enough money to live on. ability owed by your spouse, you're an Injured Spouse
agrees to release the garnishment.
entitled to relief.
About Community Legal Community Legal
Services of Mid-Florida Community
Services of Mid-Florida, Inc.
Our mission is to provide access to justice
Legal
BREVARD — (866) 469-7444
through high quality legal assistance to
low-income persons.
Services of
CITRUS & SUMTER
Community Legal Services of Mid-Florida,
106 N. Osceola Ave. Mid-Florida
Inc. provides free legal assistance to eligi- Inverness, FL 34450
ble low-income persons in civil matters (352) 726-6592 — CITRUS
(we do not offer legal assistance in crimi-
nal or traffic matters).
(800) 984-2918 — SUMTER UNDERSTANDING
We also provide community educational
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PUTNAM—(386) 385-0928
seminars and brochures regarding the 216 S. 6th St., Palatka, FL 32177
major areas of law we practice.
Although the LITC receives funding from HERNANDO — (866) 801-5566
the IRS, the clinic and its employees are
not affiliated with the IRS. A taxpayer’s LAKE— (352) 343-6351
decision to use the LITC will not affect the 226 West Main St., Tavares, FL 32778
taxpayer’s rights before the IRS
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2300 SE 17th St, Ocala, FL 34474
Client toll-free number:
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122 E. Colonial Drive, Suite 200
Orlando, FL 32801
Low-Income
Taxpayer Clinic (LITC)
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Client toll-free number:
SEMINOLE — (407) 322-6673 (866) 886 -1799
315 Magnolia Ave., Sanford, FL 32771
www.clsmf.org
(866) 886 -1799
www.clsmf.org VOLUSIA — (386) 258-5600 PLEASE NOTE: WE DO NOT ASSIST
128 Orange Ave., Suite 100 WITH TAX PREPARATION UNLESS
The Florida Bar Foundation, Daytona Beach, FL 32114 THERE IS AN UNDERLYING ISSUE THAT
with Interest on Trust Accounts Client Toll Free Number: 1-800-363-2357 REQUIRES TAX PREPARATION AND
program funding, provides
support for this service. ADMINISTRATIVE OFFICE: 1-386-506-5396 FILING
info@clsmf.org
10/11 T-19
www.clsmf.org
