# Filed my Streamline in early and today got this from the IRS. Now what?



## boat

Hello all. Early June 2014 I filed a Streamline for 2014 for my wife and I for 2011-2013. Today I received a notice from the IRS that says-

_We applied 4.00 of your 2012 over payment to the amount you owe for 2000. As a result the amount you owe for 2000 is 4,221.20._

I thought after seven years the IRS drops your records? And after ten years the IRS drops your debt? So I have been told anyway. 2000 is a long time ago. 

And now what? If I pay this will I suddenly get a bill for 1999? and 98? and so on?

And does this mean they accepted my Streamline? Or is that yet to come?

A couple weeks back I tried the online form to get a copy of my transcript, but the system would not accept my information. 

There is a phone number on the form. What happens if I call that number? What should I ask? 

What should I do now? Is there a way to reduce that 4,221 dollars? 

I know, a lot of questions. Any suggestions?

Boat


----------



## BBCWatcher

Did you/do you have an outstanding tax bill from tax year 2000? A subsequent streamlined filing would be very unlikely to reduce or eliminate previously determined outstanding tax debts. Previously determined outstanding tax debts have no statute of limitations so far as I'm aware.

The streamlined program is a form of amnesty. Amnesty is routinely granted when you qualify for the program and come forward voluntarily, _before_ the IRS catches up with you. It can't do much or anything for what came prior and was already -- in the IRS's point of view, anyway -- a settled matter.

Actually you still do pretty well. From what you describe the IRS waived penalties and interest and treated the streamlined filings as timely filed, then they applied the calculated refund to your previously determined tax debts.

If I'm correct in my guessing here, what you could do now is ask the IRS for special relief on that previously determined tax debt, e.g. to waive any penalties (but not interest, probably) if they haven't already. They could say no, but they might say yes.


----------



## Bevdeforges

Unfortunately, the IRS never forgets an unpaid debt. (Heck, debts to the IRS don't go away even if you file bankruptcy.)

What you can do is to request a payment plan. Start here for the alternatives: Alternative Payment Plans & Hardship Information Obviously, it depends on your situation, but it paying that back debt would be a hardship, there are some alternatives.
Cheers,
Bev


----------



## boat

*The next step*

Thank you the answers. I see all over that the IRS does not keep records more than 7 years and there is a 10 year statute of limitations on money owed to the IRS. I also see that there are some reasons this ten years may be extended. Bankrupsy, Offer in compromise, and ... The one that seems to apply to us is-

EXPATS!

Yes that ten years does not keep counting if we are out of the country? Perhaps. I am hoping someone on the forum might know the in and outs of this. How would the IRS even know if I was out of the country. I never tell the government when I am leaving. I just sail away. No airline ticket, no boarder checkout, no departuree passport stamp. Maybe a country I visited reported back to the USA who reported to the IRS? Anyone know how that works? 

I went up to view my IRS transcripts yesterday and it seems my Streamline was accepted, or at least shows filed. And my transcripts even says they can provide a letter stating I did not file in 2010. Hmm ...

No place can I find anything saying I owe money from past years. I emailed my CPA and she says the only way to know is to call the IRS hotline. I called them this morning at 9.45 EST and a voicemail comes up saying they are closed and only open 7 to 7, but they do not give what time zone they are working in, so I will try again later in the day. 

Lastly the transcripts show what money was reported earned by me in the last seven years and they all seemed to show zero till I reported on myself. 

Any advice would be appreciated. 

Boat


----------



## Bevdeforges

The only reference I can find to a statute of limitations on individual returns and collections is the following:



> “[T]he amount of any tax imposed [by the Internal Revenue Code] shall be assessed within three years after the return was filed.” 26 U.S.C. Sec. 6501(a). If a tax is properly so assessed, the statute of limitations for collecting it is extended by 10 years from the assessment date.


There is the possibility that they have made a mistake, too. Take a look at IRS Publication 3498 on the Examination Process. There is a section on What if You Believe Your Bill is Wrong? which might give you some ideas about what to do next.
Cheers,
Bev


----------



## boat

Thank you for the help and ideas Bev- So, I called the IRS number, waited on hold for 35 min, got cut off, called back waited on hold for 42 min got cut off, called back, waited on hole for 48 min, and got a human. 

She went over my past records and could only find this one year, 2000 that showed anything outstanding, and nothing for my wife. Good so far.

When I said that 2000 was well over the ten year time limit she said the assessment was not done till April 19, 2004. Okay still over ten years. So she puts me on hold for five minutes and comes back and says well penitiles were added in March 2005. I say, So I have to wait till March 2015 for this to drop off? That made her stumble a bit, and she put me back on hold. 

She came back and said she would send me the year's records in question and I can send it back saying it's over ten years old, or refile for 2000.

And for general info, the year was 2000, I did not file, the IRS filed for me (unknown date yet) assessed me 2,650 on April 19, 2004. And since then the pentilies and interest has added 2004 dollars. And since I over paid my 2012 taxes by 4 dollars they applied that four dollars to my 2000 tax burden that is now 2000 dollars. 

Hmm ... So far so good. Any suggestions?

Can I just ignore this for seven more months (I mean its already been almost 15 years) and this tax burden will just go away? Do I have to file anything to say its been over ten years? 

Thanks for the help.

Boat


----------



## Bevdeforges

If you didn't file for 2000, they must have received some sort of W2 or 1099 or some other report of income paid from the US in your name and/or social security number. Wait to get the records she's sending and see if they even are yours. It's possible there was an error in the reported SSN or some other problem. And if you can prove that, they should drop the whole thing (and give you back your $4).
Cheers,
Bev


----------



## BBCWatcher

....But the IRS has no statute of limitations problem here. You didn't file, so the 3 year sunset didn't apply. (I don't think any time limit applies at that point -- one reason why filing is a good idea even if you don't think you owe tax.) They made a tax liability determination in 2004, and then interest and penalties started accruing. All bog standard stuff, I'm afraid.

She's correct. If you file a truthful tax return for tax year 2000 that results in a different (ideally zero) tax liability, problem solved. But it's on the books as an outstanding tax debt, so it's a fait accompli unless the underlying facts are other than the IRS currently thinks. Yes, one possibility is an SSN mix-up, for example. But the IRS thought you had some taxable income in 2000 that you owe tax on, e.g. through 1099s and/or W-2s as Bev suggests.


----------



## boat

*What should my next step be?*

Okay, I am trying to take all this information in. First I keep reading articles like this-

Time Limits on IRS Collections | Nolo.com

that say there is this ten year time limit on collections by the IRS, and I think I am over the ten year limit, and will even be over the second part of the ten year time frame, when they added in penalties, in six months, (after 14 years already). 

Thus my thought if I should pay the 4,500USD, or respond that the ten years is past and ask for the debt to be forgiven and if the the IRS comes back saying I have been out of the US for most of my life so the ten years does not apply then accept the bill and pay it. 

Then I see the post by Bev and BBC that say no statue of limitations exists. I am not sure what the reason is for that. Is it that I did not file so the SOL (hey, I just got that SOL bit. How funny is that?) does not start? Even if the IRS filed for me, and thus started the assessment date?

Of course the online articles say that time outside the US stops the SOL, and I did just file the Streamline with NZ as my residence country so it would not take a particularly clever agent to make the connection. 

What do people normally do in a situation like this? 

I am in a position to pay off the 4,500 but does the IRS ever deal at times like this? I thought about making an offer, but the system seems to make an offer in compromise and that means I send them in the money I am willing to say I will offer and if the IRS thinks they like what I offer they accept it, otherwise they just take the money and tell me to pay more? Is that really how an offer in compromise works? 

Really? 

So I guess I am looking for what the best coarse of action should be at this point. Pay the money and count my blessings? Challenge the ten year time limit and see what happens? Ignore them for another six months and let the second ten year time line drop off my record? 

Right now I am waiting for a copy of my tax return from 2000 to see what it is they claim they have. But then I have to make a decision and thus my questions.

Thanks again for all the help.


----------



## BBCWatcher

The tax debt was incurred in 2004. The IRS had until 2010 to put that tax obligation on the books. Once on the books, there aren't too many ways that tax debt disappears except through payment. (Death also works, though your estate is still liable.)

Most people pay their taxes, so that question is pretty easy to answer.

I think I'd probably take the deal. The IRS has already apparently granted your SDOP, and that's a BFD. They even calculated a token refund to apply against that outstanding tax debt. There's some non-trivial risk the IRS could decide to take away part or all of the SDOP if you want to make a big fuss over the 2000 tax debt. Remember, the SDOP wipes away everything in the past except what was already your previously determined tax obligation. It wipes away 2005, 2006, 2007.... And, if the statute of limitations hasn't expired, 2001, 2002, 2003, and 2004 as well. As I said, it's a BFD.

The exception would be if you genuinely didn't owe tax in 2000. If you can send in a 2000 tax return (2000 Form 1040 and attachments) that truthfully ends up in a different place than what the IRS calculated for that tax year, resulting in less or zero tax, then I'd strongly consider doing that. If the tax was correctly determined, you owe it, quite simply -- and you've owed it since 2004. (Really before that, but the IRS had 10 years to figure that out. They took 4.) And it's never going away unless it's paid in full or unless the IRS grants relief. Which they already have, big time, in the SDOP.


----------

