Sherril Huff responded to my post about her (since released) federal tax lien with these comments to the Seattle Times:
Huff said the IRS filed the lien because the agency mistakenly thought she had not filed her tax return for 2000, but she was eventually able to demonstrate that she had filed on time and paid her taxes. When the matter was cleared up, she said, the IRS returned penalty payments she had made during years of the dispute.Of course the IRS makes mistakes and perhaps Huff's explanation is entirely truthful. Unless she voluntarily releases all relevant communication with the IRS, we'll never know. In the meantime, the story raises a number of questions in my mind: Does the IRS typically impose liens on taxpayer who are working in good faith to document that they have properly reported income and paid all of their taxes? Does it typically take 3 years to resolve such matters with the IRS? If she was certain that she had properly filed her returns and paid all taxes owed why would she have made penalty payments in the first place? And is a single letter from the IRS indicating that the IRS "reduced its calculation of taxes and penalties owed" dispositive proof that the taxpayer was never in arrears on any amount under dispute?"I did not lie on my form," Huff said of her Democratic questionnaire. "I did not fail to pay taxes."
Huff showed a letter from the IRS dated July 23, 2007, that reduced its calculation of taxes and penalties owed by more than $15,000 and gave her a $5,078 refund.
I invite any readers with more specific knowledge of IRS dispute and collection procedures to weigh in.
Posted by Stefan Sharkansky at January 12, 2009 09:38 AM | Email ThisI do know from experience that if you misfile or make a legitimate mistake, the IRS isn't out to get you to pay a lot of penalties, especially if they weren't entitled to all the money they collected (i.e. you had a refund coming).
I suspect Ms. Huff had more money taken out of her wages than was due (ergo the Feds had more money than they were entitled to) and when she filed or refiled she was due a refund anyways. Since the Feds had more money than they were due during the penalty phase, they may have just forgiven the penalties.
However, after a few months and not receiving the refund due (per her explanation) she should have called IRS and asked where her cash was. That she didn't and waited for a lien is somewhat surprising.
From the IRS standpoint, if they don't file then we go after them, because they don't know if someone is "gaming" the system or thought they turned in.
Posted by: swatter on January 12, 2009 09:32 AMliens are AFTER much discussion, calls, letters and working (usually bending backwards to help) taxpayers; exceptions are when flight or time is of the essence (usually illegal things);
mistakes can happen; and yes, things move slowly; letters etc take month or 2 to exchange especialy when you are writing & they are answering simultaneously; you're faster; they're slower; a basic govt reality;
also mailing security slows things up; can't comment on specifics; many speak of the IRS from 1 bad experience or heresay or a friend's issue; keep your minds open; ask practitioners and those in the field; then judge; like used car salesmen, rep's die hard;
Posted by: jimmie-howya-doin on January 12, 2009 07:08 PMbetter to be up front with all facts--not vague--and take your lumps--heck--i just heard that a new O-appointee in charge of Treasury and IRS no less, is in for 30+k in taxes alledgedly late or just late paid himself--great role model? like a general who's a deserter? you judge for yourselves
Posted by: jimmie-howya-doin on January 13, 2009 07:37 PM