Georgia Legal Services Program’s (GLSP) mission is to provide civil legal services to persons with low incomes, creating equal access to justice and opportunities out of poverty. GLSP’s Pro Bono program partners with volunteer attorneys and organizations across the state to better serve this mission. Today, we have partners from two low-income taxpayer clinics around Georgia to talk about hot issues during this unusual tax season.
Eric Santos is the Executive Director of the North Georgia Tax Clinic in Lawrenceville, Georgia. At Columbia Law School, he discovered a passion for tax law through his studies and deepened his commitment to social justice through pro bono work, including through the National Lawyers Guild. After law school, Eric practiced in the federal tax group of a large international law firm. In 2018, he founded the North Georgia LITC to help people who find themselves in difficult situations. He represents low-income clients in controversies with the IRS and educates people in his community about their rights and responsibilities as taxpayers.
Tameka Lester is a tax attorney and Clinical Associate Professor of Law at Georgia State University College of Law in Atlanta, GA. She also serves as the Associate Director of the Philip C. Cook Low-Income Taxpayer Clinic, sits on the College of Law’s Dean Advisory Committee, and is a faculty senator for the university where serves on the Budget and Faculty Affairs committees. She speaks across the country to various groups about taxpayer rights and responsibilities, as well as issues of tax policy and how tax-related issues affect marginalized communities and communities of color. A native South Carolinian, Tameka graduated from Winthrop University with a Bachelor’s degree in Integrated Marketing Communication, the University of Phoenix with a Masters in Business Administration, and North Carolina Central University School of Law with her Juris Doctorate.
The North Georgia Low-income Taxpayer Clinic is very excited to announce our sponsorship from Wiggam & Geer, who have become 2021 Annual Sponsors! Wiggam & Geer is a law firm specializing in tax and bankruptcy law. They have contributed this blog post to the North Georgia LITC to help answer some common questions relating to tax issues.
Common Questions Related to Notices, Fraud and Debt
By Wiggam & Geer, Tax & Bankruptcy Attorneys
Tax issues don’t always end with filing your return. The IRS uses W-2s, 1099s, and other forms filed by your employer or bank to confirm your tax debt. The agency may not agree with the income reported on your tax return and follow up with a letter or bill, or these figures may not match because you were the victim of tax fraud.
Here are three common questions the experienced tax attorneys at Wiggam & Geer often hear from taxpayers.
What do I do if I get a letter from the IRS?
If the IRS determines you have underreported your income, it will send you a CP2000 Notice explaining its calculations. This is not an audit letter but instead a notice from the agency that you owe more taxes. Whether you agree with the IRS’s assessment or not, it is important to respond within the 30-days noted on the letter. Not only will penalties and interest accrue on any additional tax debt, but your options for challenging the IRS’s assessment are more limited if you miss the CP2000 deadline. The CP2000 notice is usually accompanied by a response form or contains instructions for next actions, including how to dispute the additional tax debt.
If you do not respond to the CP2000 by the deadline or at all, you will receive a follow-up letter, C-P-3219-A. This is known as a notice of deficiency letter. To challenge this notice, you generally must file a petition in the US Tax Court. It’s important to respond to the CP2000 within 30 days to avoid receiving the C-P-3219-A.
What if I think I was the victim of tax fraud?
If you received a CP2000 notice and you think it’s related to fraud or a stolen Social Security Number (SSN), contact the IRS as soon as possible using the telephone number on the notice. An erroneous CP2000 is only one sign that you may have been the victim of stolen identity or tax fraud. Other signs include:
Attempting to file your return and receiving a note back from the IRS that it was already filed
Getting an unrequested tax transcript in the mail
Attempting to e-file your return and not being able to because of a duplicate SSN
Receiving a notice that an online account has been created in your name when you took no action
Receiving a notice that your online account has been accessed or disabled without your knowledge
If any of these has happened to you, you can call the IRS or consider filing a Form 14039, Identity Theft Affidavit, with the agency. The IRS will begin investigating your claim.
Remember, even if you think you were the victim of identity theft or fraud, you are still required to file a return and pay your taxes on time. The IRS recommends filing a paper return in this case.
The IRS sometimes suspects fraud before you do. In this case, the agency will notify you via mail with a Letter 4883C requesting that you confirm your identity within 30 days.
What do I do if I cannot pay my tax debt?
Even if you cannot pay your taxes, it’s usually best to file your return on time. The IRS assesses separate penalties and interest for not filing. By filing on time, you will avoid late filing fees and only be assessed penalties and interest on your unpaid taxes.
The IRS offers installment and payment plan options for those who cannot pay their taxes right away. You can request a short-term installment plan from the IRS if you intend to pay your taxes within 120 days or a long-term installment agreement with set monthly payments if you need more than 120 days to pay off your debt. Remember, interest and some penalties continue to accrue even with a plan.
An offer in compromise might be an option if you cannot pay your entire tax debt, even with a payment plan. This process requires an application and is generally a negotiation with the IRS that includes an investigation into your expenses, ability to pay, earnings, and any equity you have, such as in a house.
When responding to or negotiating with the IRS, it’s always good to seek advice from a tax professional. If you cannot afford a tax attorney, you may be eligible for free assistance from the Low-Income Taxpayer Clinic. The experienced tax attorneys at Wiggam & Geer are proud to support the LITC.
The bill is enormous, and it contains a whole bunch of different tax changes. Today, we’re going to be covering a set of five provisions in the bill that haven’t gotten as much attention as the stimulus payments or unemployment benefits but are still important.
Number one, the bill expands the Child and Dependent Care credit for 2021. Both the maximum amount of the credit and the income limits have been increased, meaning that, for this year, the credit will be more generous and available to more people. This expansion is on top of the huge increase to the Child Tax Credit that we discussed in our prior video and provides even more assistance to low-income families with children.
Number two, the bill increases the Earned Income Credit for low-income individuals and married couples without children. It also increases the phaseout threshold, lowers the minimum age, and eliminates the maximum age on the credit, meaning that many more people will qualify. Previously, the EITC had been very limited for childless filers. However, the American Rescue Plan already gives a lot of new money to tax households with children through the expanded Child Tax Credit and Child and Dependent Care Credit. Increasing the EITC spreads a smaller amount of benefit out to low-income households without kids.
Number three, the American Rescue Plan also provides relief for many small businesses. It creates a new fund called the Restaurant Revitalization Fund that will pay grants to food and beverage establishments who have struggled throughout the pandemic. It also expands and extends the Paycheck Protection Program and Economic Injury Disaster Lon parograms and provides specifically that advance EIDL amounts and Restaurant Revitalization grants are not considered taxable income. Finally, the bill extends employment payroll tax credits available to small businesses for the costs of providing paid sick and family leave to their employees.
Number four, the bill contains a range of measures directed towards individual health insurance consumers. The main tax change there is an expansion of Premium Tax Credits available for individuals who purchase health insurance marketplace plans, making those plans somewhat more affordable for low-income people.
Finally, number five, the American Rescue Plan provides that student loans discharged for any reason between 2021 and 2025 will not be considered taxable cancellation of debt income. This is important for individuals whose loans will be forgiven, but who would not have fit into one of the existing exceptions from tax, but it also removes a major logistical obstacle to general student loan forgiveness plans currently being considered both by the president and in Congress.
I know that’s a lot of information, but there’s a lot in that bill and my cat will only cooperate for so many videos! If you need help with tax issues and can’t afford to hire a lawyer, please give us a call. And, make sure to watch the rest of our videos on the American Rescue Plan and like and subscribe to our pages!
One of the flagship provisions in this bill is the third round of direct stimulus payments, this time for $1,400 per person. Stimulus payments started going out in mid-March, and if you’ve already received yours, that’s awesome, you don’t need to do anything else. But if you haven’t received your payment yet, this video is for you.
First things first, make sure you check on the status of your payment. The IRS has a lot of stimulus payments to issue, and they just haven’t gotten to some of them yet. You can check using the “Get My Payment” tool on the IRS website – a link is included in the video description.
If the Get My Payment tool tells you that your payment status is “Not Available,” you are probably a bit confused. And that’s understandable because the IRS is issuing this message as something of a catch-all to anyone who hasn’t been specifically scheduled to receive a payment, so what it actually means for you is unclear. It could mean that you are ineligible for payment, and you’re just not getting one. But it could also mean that the IRS isn’t sure if you’re eligible yet, so you might still be entitled to one later. Unfortunately, the IRS hasn’t set anything up to tell you specifically what the problem is. So, what can you do?
If you’re in this situation and you haven’t filed your 2020 return yet, filing immediately is probably the best way to get your stimulus payment as soon as possible. Stimulus eligibility can be determined by your 2019 or 2020 return, but the IRS only looks at 2019 if you haven’t filed 2020 yet. So, if your money is being held up by issues with your 2019, filing 2020 will sidestep that delay and allow you to get your money immediately. When you do file your 2020 return, you SHOULD do so electronically, either through commercial software or a tax preparer who has that capability. The IRS is still very backed up in processing physical mail because of pandemic-related delays. If you file a paper return, it can take months for them to process it, which defeats the purpose of filing to try to get your stimulus money quickly.
If you have filed your 2020 return and are still getting a “Status Not Available” message, things are a bit trickier, and there isn’t always a clear, neat solution. First, you can check on the status of your 2019 and 2020 returns by setting up and logging into your account on IRS.gov. You can also reach out to the Taxpayer Advocate Service for assistance. If you can get ahold of them, they should be able to tell you if there are any issues with our most recent return that might be holding up your stimulus payment.
If you need help with problems you are experiencing with your stimulus payment, you should seek professional assistance from a tax attorney. If you can’t afford to hire a lawyer, you may be eligible for free assistance from a Low-Income Taxpayer Clinic like us. If you’d like to know more about our services, please check out our website or give us a call.
Thanks for watching! Make sure to check out the rest of our videos about the American Rescue Plan and like and subscribe to our page!