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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 7194
Experience:  Extensive Experience with Tax, Financial & Estate Issues
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I received a letter 7 years ago that I owed the IRS 13,000

Customer Question

I received a letter 7 years ago that I owed the IRS 13,000 for failing to file in 2004 and they filed for me. Ice ever heard from them again and have been employed for 2 1/2years making under $24k a year with 3 dependents. How do I find out if they have lien on me?
Submitted: 1 year ago.
Category: Tax
Expert:  Stephen G. replied 1 year ago.

Well, first of all, if you are still on the books for owing money from 2004, your refunds for 2013 and 2014 will automatically be taken to satisfy that liability. If you never filed a tax return for 2004, there's no statute of limitations on non-filing. Whether or not they can still collect from you depends upon when they actually assessed the tax, not just the year it applies to.

If you want to see if there's an outstanding lien, you'll need to check with your local Registry of Deeds and/or Courthouse; some of the jurisdictions have the data online & if that's the case where you reside, you should be able to do an online search by name to see if there's anything outstanding. If you are not familiar with how to check on this and be certain that you have done it correctly, I would recommend that you visit the Clerk's office in the Courthouse and they will look it up for you and tell you if there's anything on record.

Customer: replied 1 year ago.
I don't want them to keep my 2015 refund. How do I communicate with them to accept the 2013 and 14 as satisfying the debt before I file them all or after I file 2013 and 2014 but before 2015. If I file all 3 my refunds total -$16,000. I don't want them to keep it all and justify it as penalties on top of the $13,000 debt
Expert:  Stephen G. replied 1 year ago.

Unfortunately, the penalties & interest will far exceed what you would owe for 2004 by at least 50% of whatever the 2004 bill was; so if it was $13,000., you would already be at the maximum civil penalties of approximately an additional $6,500. plus about $400. - $500. a year in interest. So, all I can suggest is to file the 2013 & 2014 returns ASAP & see what happens. If you haven't heard anything from them in several years, it's possible that the refunds will go through; at least you'll know where you stand and then you can determine what to do about 2015.

There's really nothing else you can do without the potential of stirring up a hornets nest.

You need to get 2013 & 2014 filed ASAP.

Expert:  Stephen G. replied 1 year ago.

I see you have had a chance to read my comments & I'm sure they are not what you had hoped for. Unfortunately, if you owe the IRS money, you can't control what they do or don't do with any money they owe you. They will keep applying whatever they can find of yours against your obligations until the liability is paid.

Your only other option is to attempt to work out a payment plan with them, but even then if you have refunds due you for open years, they will insist that they been applied to your tax liability first.

You don't want to delay too long as if you go beyond the statute of limitations, you won't be able to obtain even the credit against your open liability as if you don't file a tax return, you will lose the refund entirely.

So, again, the best thing to do is to get those returns filed & then you'll know where you stand before you have to file your 2015 tax return as the due date is still 6 plus weeks away.

Steve G.

Expert:  Stephen G. replied 1 year ago.

Do you have any additional follow-up questions?

If not, please remember to rate my response as that is the only way we receive credit for our work.

Thanks very much,

Steve G.