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tv   Washington Journal Nina Olson Discusses the Tax Code  CSPAN  April 10, 2017 9:06am-10:01am EDT

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who are handling this data are not using this data to make money for themselves. >> watch communicators tonight eastern on c-span2. >> "washington journal" continues. in this segment we take time to focus on your money and this week we're doing by asking nina olson back on the "washington journal," the .r.s. national taxpayer advocate, to discuss the 2017 tax season and take your approaches, tax day but first, nina olson for those unfamiliar, what is the national advocate? guest: so my position is set up by congress and appointed by the secretary of the treasury. i head an organization that elps taxpayers solve problems with the i.r.s. and i'm also charged to identify the istrative and legislative causes of those problems and make administrative
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recommendations to mitigate them. host: this is an office within the i.r.s.? the i.r.s., within i have 1800 employees around the country. the employees do? guest: they take taxpayer cases, experiencing financial hardship because of what is happening or not happening with or they tried to solve their problem with the i.r.s. and it hasn't got solved channels.rmal host: if you have questions, nina olson with us this morning "washington journal." phone lines split up in this central, eastern or 202-748-8000. if you are in the mountain or 202-748-8001., you can start call nothing now. nina olson, the first time have program since your effort last year to have public forums, a dozen of them and xpayer needs preferences. why did you do that and what did you find out? year i have to do annual report to congress, comes
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ut first week of january, the one that came out in 2016, i focused on the i.r.s.'s vision the future state, its future state, which had heavy emphasis online accounts and online services and really limiting the interaction rsonal and i was worried about the ion mizing, if not eliminate of phone interaction with taxpayers, i decided to go country with members of congress and go to their districts and find out what taxpayers throughout the united states wanted. it was rather remarkable. miles on and we went to all parts of the rural, both urban and south, north, east, west, and central and learned a lot. lot from taxpayers and their representatives, people who prepare returns, represent before the i.r.s. host: worry body minimizing interaction, people being pushed too much toward online or
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systems?ed guest: we want a sense of what taxpayers thought would be seful to them online, but when did they really need to talk to a human being and what we really that, you know, it would be helpful to be able to see account information online, could begin, people lose notices, get a notice from the i.r.s. and lose it, you could go online and see what the i.r.s. has. but they really wanted personal whether it was on person, but in personal interaction when they needed to explain their side of the story. and that's what was a lot of frustration, both in the current state, because of the staffing i.r.s. being budget being cut, theperson, but personal interaction when they needed to explain their side of asw, being answered as often people want and they have to wait a long time. and then, in he future, just they would be able to have that kind of dialogue in the future. ost: for years, you have been pushing for simplification in he tax code for taxpayers, is
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that a theme you heard in your -- guest: absolutely. eople said, you go make the i.r.s. as great as possible, if you don't get simplification of sanitye and some sort of check on the provisions and the doesn't matter because that is actually very true, the i.r.s. has great deal administering this incredible document. love to hear viewer comments on that or with tax tax day approaching, nina olson is national taxpayer advocate, just stats on the cost and complexity on the tax code from your recent report. and businesses spend about 6 billion hours and $195 preparation each year, 5867 changes to the u.s. 2001, an average of more than one per day and the nearly 4 ode is
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million words long, how do you that?fy where do you start? guest: i do think we said in our report, need comprehensive reform and put everything on the table and look at all those say, do we need this one, do we need this one, provision in here doing what we intended it to do? lot of stuff gets added in saying we're going to try to drive some kind of behavior or incentive for certain behavior we want and then nobody ever checks to see whether it it and it increases over time. so that is, you know, you put everything on the table and you to figure out what you need. that is comprehensive task and brilliant than me, that is their job to do it. that also identified areas are very, that are actionable now.t one is there are six provisions n the code that deal with children and family makeup and
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status, which is really one of items that you fill online of the return, am i married, am i head of household and who do i claim dependents. that is surprisingly complex, i made recommendations about that. education incentives in the code and 16 retirement or provisions dochlt we really need that many? many, people that think, did i claim the right one? i leave money on the table? you get people claiming things entitled tot exactly that one, they could have maybe been eligible for this other one. all of that creates uncertainty and a feeling that is arbitrary and capricious and that is not good. host: work through the recommendations as we go. let's get to calls. north winston-salem, carolina. good morning. caller: good morning, thank you.
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i appreciate this. gotten into a situation where we had to file amended tax for 2014 and 2015. our taxes. block do installed geo thermal heating and coling system with geo-thermal credit. error preparer made an and included one unit when in unitsuse we installed two for down and upstair necessary our home. tax d to file amended return to correct it. this process, they received them initially u know, they wanted me to just send them more forms regarding the carry-forward tax credits and i id that, we got two extensions where they wanted additional 45 review the last correspondence i sent to them, i sent certified mail january and just said, we've tried to work with you and
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everything, i'd like to work toward resolution, i did call our congress person and we a taxpayer advocate assigned to this case about ago.e weeks so if you could give me insight ando how this process works what we can expect going forward, that would be great. for sharing your story. uest: i'm glad you got to the taxpayer advocate service, i will give you tips about working with the advocate, as well. amendz by ded returns get scrutiny the i.r.s. and they might get elected, they get reviewed before more monsepaid out and that is what is -- was causing delay.tial now the longer delays, what you call s basically what i and people inside the i.r.s. call a stall letter, which is, days, we ore than 30 need another 30 or 45 days to
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review your return. getting more be than one stall letter and you already have gotten two. you right there makes eligible for the taxpayer advocate service because the it em isn't working like should. what they do, they review it and look at your documentation and should, if all the documentation account. adjust your i think some of this, you are not enough human beings to deal in. the work coming once you're in the hands of the taxpayer dvocate, the advocate gets your information, i hate to say this, they may ask is the fastest route for you to send to them everything that you have already to the i.r.s. once before. but might tick people off, from our experience, it might be harder to get it back from the i.r.s. because there is no one asided to your case on the i.r.s. side, there is no they're there for us to call. easier to get it from you, package it up, we send it over
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them ai.r.s. and we give date by which they have to look at it or else we will elevate it management and order them to assign someone. nicely f. ked them they don't do it, we get into the we're ordering you to assign a eone, you look at this by certain time and make a decision and then if we disagree with the i.r.s. makes, he like, say they say you are not this le, we're looking at document and we think you are eligible, we will take it up the to -- until we get the answer we think is appropriate or we've taken it to of the organization, i mean, really the top of the organization and gotten an back.r host: is there judicial dispute resolution process that you work through? guest: we don't work through the judicial resolution, once it the courts we are divested of jurisdiction. this is on theat ministrative and you would be entitled to appeal with appeals function,
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that person might think, if we went to court, we losing, so chance of let's settle this out. you know, that is where sort of, involved in that process. i really honestly think the is just h her return that the paperwork is there, nobody is assigned to look at paperwork and it's just sitting there against a wall. benefits of the taxpayer advocate services, the employee in have one the taxpayer advocacy, one case advocate assigned to the case. will have an 80 0-number to the case advocate. of times it goes to the voicemail, the advocate is on taxpayers, th other you have one person tracking everything. host: it is, is olson's ite for nina organization within the i.r.s.
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bob is in lake worth, florida, morning. caller: good morning. has said th what nina assigned people aren't and so it is like having too many cooks in the kitchen or too mechanics working on the either icle, i mean, they need to pigeonhole these olks down to that is what they do, these little resolutions of things and that is their specialty, but i've seen it in south florida, where i think the people want face-to-face is when they're being audited, but when people breaking their appointments and they're driving 30 ort lauderdale 20 or miles to make an appointment, to talk to somebody face-to-face, the appointments get broken, i think that is when irritated, butet taxes in general, i've seen
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tags come nothing from in tax assessor's office different counties, some is just a zoo. the eginning to think that people aren't trained because they'll come in, you'll have tax go to the capital and where severing comeing and care to feel keep the one package and as soon as they get in there, they throw it over some tables breaks it apart and a whole bunch of different pieces, passing out cookies, my gosh, we're in trouble now. host: thank you for your view. i think, what is really interesting statistic is in the individual audits i.r.s., about 80% of them every are conducted by correspondence, which means that in the uman being i.r.s., one employee is assigned that particular audit. it is pretty much run by
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machine, your return is selected number of reasons, you get a letter saying your return s under audit, send this documentation on this issue and then if you send the will go -- n in, it we call it against the law, but system, and then the next available person will look some t documentation at point. and then that person will send ut a computer generated letter and if you send something else back in, a different person will ook at it, if you call the i.r.s. about your audit to give them information, you will not get the same person who looked your documentation, you will not get a person who you talked about the ely before audit. i have made recommendations for ears that the i.r.s., once a taxpayer has engaged with the i.r.s., whether they sent audit or called about the audit, one person, one assigned to ee be that case, that is not only because they would be familiar
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with it and have a relationship, if it was just by phone it the taxpayer, but make accountable, that employee is accountable for how that case is handled. now, no one person in the i.r.s. for 80% of our individual audits is accountable for how that odd sit conducted and whether you got the right answer. and i've always viewed audit, i know it doesn't feel that way to taxpayers, but as educational experience and i view it as ways.ional in both the i.r.s. thinks there is something wrong done on the return. taxpayer has information that may show it wasn't done wrong. done -- the t is i.r.s. needs to listen and be educate body that. it he taxpayer has done wrong, the taxpayer, the audit is the opportunity to say, here it hat the law is and how applies to the facts, here is why it doesn't apply to you, the taxpayer knows going forward what the law is, how it applies
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and if their circumstances change or could change behavior, they could position, but his if we don't have that conversation, nobody learns anything. having the conversation with nina olson this morning. central es eastern and time zones, if you live there and have a question as tax day approaches, 202-748-8000. mountain and specific time frames, 202-748-8001. hanford, california. good morning. caller: hi, good morning. say that the tax courts are really not an option for incredibly , it is expensive and i've had extensive taxpayer with advocate in portland nsan jose fresno, sometime its is fantastic, depending who you get is absolutelys it terrible. i'd say it is very uneach the i.r.s. i'd say doesn't even follow its own
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procedures. cdp le are entitled to hearings, they tonight follow procedures and you basically recourse. i'd say the system needs great improvement, the structure with taxpayer advocate's office is not right structure, we need is not ructure, it working. i know some people are getting served, but a en lot of times i haven't been served. thank you for your information. guest: i appreciate that. do the job we 't should be doing because i see some of the taxpayer cases that in and you all can find me on the intern sxet e-mail me irectly, my e-mail is want to know when we're not doing a good job. when i get e-mails, i look into that case and bring someone member of my staff in,
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again, so that it is a learning employee and r the we can improve service. i would say that one thing that trying to do with my office is really try to train lot of employee come from all over the i.r.s., some from outside the i.r.s. and we don't have specialists, my employees see any kind of issue, what kind of w issues are coming in, they have to know a little about tax lawon and audit and and they also have to understand the i.r.s. computers because so by the blems are caused i.r.s. computers. i think one thing i'm concern employees, they aren't -- aggressive isn't the right word, they sometimes cut slack for the i.r.s., give them too much time. they get stall letters, too, and my response to that is, you can give them ne chance, but after that, you elevate it up the chain to get attention because the taxpayer not have to wait on this. if they have significant
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hardship, they are in our we should go to the mat for them. the last thing i would say, i are largeoffices that offices and i think the best way tofunction in our offices is be smaller, so i am trying to get my offices to be smaller, more offices around the country, because i also think least i.r.s. moves out of the being in touch with geo yers physically and fwraficcally, the taxpayer advocate service has to be out taxpayer g the community. and since i'm struggle withing a budget, we have to have smaller offices and spread employees out more so they are with what is going on with taxpayers there. i am open to suggestions about office ight think the should be restructured, you have i look l address, forward to hear you from you. zena, michigan, good
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morning. zena, pick up your phone if you a question. carol in arlington, texas. good morning. good morning. thank god for c-span and thank you, mrs. og c-span.ppear i had -- sent me refund check in for one of last year of the years that they owed me for, it was in 2007. hen they started in september, they kept sending me letters address was at my incorrect. i was dealing with a cpa firm, wrote them, sent them the form and said my address was changed. registered letters, to make a long story short, through having to go all this. they never responded, didn't
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hear from them. to senator barton, who is my representative here and staff.ed it to his hey began working with the tax advocate and in the meantime, she went through my file and out that they -- all this time, they never told me that i -- i would not get that money back. they kept saying as soon as we address, the form, we will send you the check. advocate when the tax got involved when the senator's started d they investigating, they discovered hey had never responded to me, in fact, had not sent me the appeal letter i'm entitled to than likely i would not that y -- or wouldn't get refund. my question to you, and i'm sor to you is, uestion where do i go from here and is
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need to try, the refund was over $2000, i know like much to ound most people, but it is to me. where do i go from here? carol, thank you for your story. guest: there is a law and this applying in is your case, where in order to get you paid f money that in on a given tax year, you have filed your return by either the due date of the so for 2007, it would have been april 15th, 2008, got extension maybe, which would be october 15th, or three years from the at a that you made the payment, the date of the return or two years from any payments you the due let's say all your money was during 2007,olding o you had to have filed that
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2007 return by april 15th, 2011, know, the due date is april 15th, 2008, plus three years, so is april 15th, 2011. return after hat april 15, 2011, there is no the i.r.s. is , blocked by law, congress passed, refund.ving you a there is one exception to that, basically you were what they call financially isabled, which is you were incapacitated and unable to take the of your finances during time between 2011 and whenever you filed your return. you really are out of luck. f that is not the case, if you filed within the three years, then you should get your rights and peal, administratively the taxpayer advocate can help
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ith that, or you could file a refund claim in court and as previous caller said, that is ctually very expensive, but there is legal recourse. my suspicion is you were outside three-year period and no one, unless congress changes the law kdo anything about that. is going through the member of congress a route you would recommend when it comes to questions? guest: that is very helpful, reasons, i will say a member of congress gives taxpayer advocate, we handle congressional constituent cases. you give the f congressional member permission to work with the taxpayer advocate, we can work with the member of congress to point out anything that might be about the processes ori.r.s. systems that the member of congress can weigh in on and, either legislatively or by looking at systemic issue. that helps. is a i guess there letterhead there?
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office, it doesn't necessarily, we pay attention to it, but we also pay attention to cases, too. host: millidgeville, georgia, morning.good caller: good morning. i would like to -- some companies advertise they can what you tax bill, owe, how can they do that and do it yourself? can you do it yourself? or scam?ompanies legit can you explain the difference n tax avoidance and tax evasion? host: great question. ll sorts of companies are advertising they on average get greater refunds than somebody else, i don't know how they know that, they don't see the data for somebody else. law and, the law is the you are entitled to a refund under the law that the law says entitled to and one firm
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trained better employees to know all the provisions that might be you, another firm may be playing fast and loose sort of law and it right now buyer beware. of e are certain types preparers cugo to, the i.r.s. are you know, there attorneys and cpa's certified and enrolled ants agents, people who have taken extensive examination before the and are essentially licensed by the i.r.s., they enrolledtheir status as agent from the i.r.s. and have education continuing requirements every year. then you have a group of unregulated preparers and that can go from the large are doing eople who return preparation in pawnshops dealerships and i saw one in a massage parlor one
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year. do they uestion is, have any training whatsoever and don't.o and some the i.r.s. has now put up a processing which if someone voluntarily will take and pass a ducation test, they can be listed on an to s. website and cugo, and see the preparers ho are listed who have taken continuing education and taken a test. this, if tion you someone promises you something that seems too good to be true, probably is too good to be true. and we have seen examples of preparer fraud, where after the taxpayer has signed preparer eturn, the as changed it and created like claimed another credit or something and then the refund, the extra refund goes into the account and the taxpayer never knows about it
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until they get an audit notice from the i.r.s. if that happens, you may want to go to the taxpayer advocate lot of we have a experience in straightening that out. he difference between tax evasion -- and tax avoidance, there is continuum, you know, purely criminal intent, you know, there is no basis in law or fact for you to claim you are trying to hide in -- putting it off shore or deductions you never had any no documentation whatsoever. and then the other end is that you made errors on your return were simple. then you have, you know, trying to do your tax planning and -- paying as little tax as possible. paying as little tax as possible law is permissible under the law. part of this thing about there is lots of gray area, the i.r.s. may think this is what you should nterpret the law is and you think it is something different. that is where the courts may
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come in to say who is right. you're entitled to do that. you are not entitled to violate or claim things that you, under no stretch of the entitled to.are you and i think like i say, there is know, um and you don't have you to think about where you are on that continuum. host: question with nina olson, national taxpayer advocate. the eastern or central time zone. mountain and pacific time zone, 202-748-8001. you were talking about tax reform early sxer your sigmond says, s, how about going the other way, page?ng with a clean guest: right, that is what we said, start with a clean page and decide what you want the tax law to do and there is a lot of conversation about corporate tax reform. i'm very concerned that we have taxpayer n individual there is something like 9
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where the inesses business is in tax, partnership s corporation, but the won't gets taxed, you simplification on the corporate side. and we do think that, you could neutral way, ue you could say, we're going to raise same amount of money we now and within each income evel, raise the same amount of money within that income level so that there might be winners the income ithin levels, but disstrib ugz is the figure we have now and out how you want to structure from the start. but that requires a lot of will both in executive branch and legislative branch nd it does mean there will be winners and losers and everybody wants to be a winner and nobody wants to be a loser. so -- oregon.verne, wilamena,
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caller: hello. nina couldi wonder if take to congress. activities being gambleing and hobbies. hobbies are front-page income and they go if they werection, cause to be netted and therefore on the front page, that ould be a very useful for administration because the .r.s. cannot administer the existence and it would possibly help in the gambling addiction ecause people would be more encouraged to keep track. interestings really point going back to tax reform. host: can you explain what he's ing about there. guest: gambleing and hobby reported on itemized deductions and as sort of expenses or misc
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itemized deductions and instead what we call above the line deductions, namely you reat them like you would sole proprietorship or interest income, but you have your income expenses and act not subject to, you know, basically you can't under itemized deduction, theyan't claim them unless re over 2% or 7.5% of your adjusted gross income, it is 2% deductions.mized a lot of people can't claim them at all. tax came out of the 1986 reform, when people were trying to simplify it and they thought simplify it by saying, look, if you don't have or many gambling losses hobby losses or hobby expenses, just don't bother to keep the paperwork. i think what the caller is money out of my pocket and reduces my ability to
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to or increases my ability pay and should get the full benefit of it and not have it be or idered a personal loss something like that. those are very much the kind of issues that fundamental tax reform needs to face. morning., good caller: good morning. host: go ahead, jim. question is in regards to something i experienced, i moved from to maryland reebt cently. preparer in x [cutting out] -- certified and just the any hope of there like maybe getting standardized for all preparers? so much more two of my returns. 2002, i ell, in recommended to congress that it
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regime of registeri -- ejsterring all peep whole prepare returns and who are notng those attorneys, cpa's or enrolled have testing eady and examination and continuing unregulated preparer, requiring them to take minimumhat proves their competency and have annual education requirement they have number of tax in law and tax preparation courses during the year. hat actually, that recommendation got passed by the senate once, the full senate by the senate finance committee and then the i.r.s. decided to implement this regime in about i think it was challenged eople that saying the i.r.s. didn't have the authority to implement circuit court for
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c ruled that the i.r.s. didn't have legal authority to create this regulation program that it congressional authorization. we're stuck, the i.r.s. can't place itself and we eed congress to do this and although bills keep getting introduced in congress, congress never moved on this. members in le, many congress, not wanting to impose regulations, in the case i tried to make, you are harming your constituents. west really the wild, wild in return preparation and if they get mistake on return, it cause constituents to be in long-term conversation with the i.r.s. as they try to it is better to improve quality of return preparation. it, way of putting long-term conversation. ight days until tax day, 20 minutes left with nina olson, if you have questions. 02-748-8000 if you're in the eastern or central time zone,
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202-748-8001 if you are in the pacific time zone. ohio. toledo, good morning. caller: good morning, hi. y question today is about tax fraud. i was victim two years in a row, was filed it electronically using both social we got the bers and special pin number and had to use our drivers license and lo behold, went to file the second year and it had already been filed again. applied n had actually for a replacement pin and was of ourhat, not using any verifiable information. i just wonder, i did call advocate on the bottom of many letters i received, but was told that is something your does not handle. i'm just wondering if that is something you guys are working on or because it is countless, ountless hours on the phone, very confusing to clear up and
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it be very intimidating. if there is any other resource for help with dealing with that. thank you. all, i'm st of appalled someone on the phone said we don't handle that, return theft and preparer fraud constitute about 40% of our cases right now. call the main you number that is often on the notices, it is a notice that is answered, actually a phone line not answered by my employees. suggestion to people on inpan is look online or look your phone books, if you have a phone book these days, under the government pages because we have an office in each state and the each of my for offices is listed in both online the phone books. you can go directly to your and get directly taxpayer advocate employee. do identity do theft.
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the thing about replacement pin, victim, maybe give background. if you are victim of identity heft, once you demonstrated to the i.r.s. that you are the legit nat taxpayer, the next supposed son they are to give you a special number hat you and you alone know and then you can put that on your return, as well as your social security number and it will tell i.r.s., this is a legitimate return f. they see a return that without that gh number, they will hold that up, go f the thief tries to through without that number, it won't, that return won't go through. a clever thief, they had your financial information and went in and pin, and so t our here is our information and give us a new one. as tually identified that systemic problem last year and improved the s process so there is more creening and you can't get a replacement pin in that way
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precisely what happened to you on the good news identity theft front. the first year congress has changed the law so getting w-, s. is formd certain other income by january 31st. it used to be that taxpayers get forms by january 31, but the i.r.s. wouldn't get them until th and sometimes march 31st. so the filing season is pretty by then and we can't check what we know what you're made, we know what the thieves are telling us they made, they are creating can't check it against what the employers filed. this year we were able to check, able to create a database and returns r w-2's and coming in against what employers and that hasearned been, really helped us stop
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off and we ft right can identify the thief rather than having to stop both returns, legitimate taxpayer and the thief and have you both come are.nd prove who you the other change, if you are filing electronically, people department of motor vehicle license numbers and that has been a change and is that certain paid payroll providers are theing verification code on w-2's known only to the taxpayer the employer and it is unique to the w-2. when you go to file you have to type in the number. when we see that, we know you taxpayer.nat the only other thing i will say about this, identity thieves are clever and they get better and better and better, even if they don't get the information from the i.r.s., are able to get information about people's identities from and for of sources every door that we try to shut,
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you know, there is another one because it really has become a very sophisticated enterprise, going forward taxpayer advocate cases, my es these suggestion gto your local office senttly and tell them nina you and they have to take the case. host: who takes on your office single malt, nina olson doing god's work, ordering the do something sounds like a super power and one more quoting you from earlier saying audit is "educational experience," do you believe a is, too?al guest: i did recognize for who are undergoing it, way, but 't feel that identify and s that is part of what its mission is, to identify returns where there are erroros them and it selects theoretically the ones that are the most that have --
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significant and it really only gets to do very small audits.of the my point is, if you are going to wanta root canal, then you it to be done well and you want courteously and you want to be listened to and have your chance to talk to the i.r.s. a few years ago, the i.r.s. rging adopted taxpayer bill of rights and in 2015, congress put the bill of rights into the code and one ue right is that the taxpayer has he right to challenge the i.r.s.'s position and be heard and why that right is so not just to me, it is you get to say, i don't agree with you or think you are right, i.r.s. has to listen to you. and if they're not looking at don't havecause they enough employees or have too much work and not talking to you o hear your side of the story and they are hearing it, then
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that right is being violated. host: head to omaha, nebraska, john waiting, good morning. think we talked to john. other john, los angeles, good morning. caller: good morning, sir. i thank you for giving me this to ask this question. have a situation where i foreclosed on a property, the loan is in the person that i foreclosed on. i've been paying that note for years, can i write the nterest off on those, on that loan? uest: you're paying the loan, but it is not in your name? is it for a personal residence? residence? caller: no, ma'am, rental property. guest: a rental property? need to see your tax advisor, but it seems to me
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be able to, but you should keep all of your interest paperwork. the question is going to be, do you have a legal obligation to debt, it sounds if you foreclosed on it, and you have that loan, you do have the legal obligation, but you're going to have to prove to the i.r.s. that you do, some is a matter of state law, you know, says about ate law loans and fore closures and who etc, not property, trying to be a run-around on this, it is actually not an easy question and not even just a law, but of federal tax a question of who has property to r and did that loan come yo be safe, first keep every single piece of paper it.ave on and second, go out and seek out
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dvice of qualified return preparer, might be worth an investment. paying you have been for three years, keep in mind that rule we started this onversation with, to get a refund, you have to claim the years claim within three of due date of the return and so that you t, find out haven't claimed interest and cufile amended return, three ago, you got a date coming up pretty quickly. host: waiting river, new york, scott, good morning. caller: good morning. to talk about the debacle waiters and waitresses in the united states. i have done a census travel the united states and found the same problem. these people paying tax on 18%,
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given 18% tip or not. your thoughts on this. this is tip income and what the i.r.s. has done, tip income is difficult to figure and the i.r.s. came up with reporting tip program that said you don't have constant l of these receipts and the taxpayer that weight weight -- wait person has to
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save and keep records, we will harbor, which is decide, you know, impute to you percentage, i didn't know it was up to 18%, but it percentage, ertain if you just reported that, we wouldn't bother you. he problem is, you can be working for really upscale restaurant and make much more or be working for a hamburger joint and make less than that. you get into ere the manager, the owner of the have elected to do tip reporting safe harbor is on age and it really backs of individual employees to keep track of tips and they have be volunteering for audit. there is process for the owner go in and say, my restaurant oesn't get 18% tips and show the documentation that these are the average tips over period of you can get an
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agreement to have the percentage lower. be incentive ld for owner to do that? guest: that is question to help owner as ees, the speaker called in earlier, owner volunteering for a root canal. think about how you do that and town wners are like, over might average 18%, we will go 8% to keep them away from a fine. host: 10 minutes left with nina olson, national taxpayer advocate. taxpayerpayer manny in -- good morning. caller: good morning. questions. if employee sends you tax return, you have employees, applysend you tax return, tax and other employee sends tax -- rn, are you going to -- and withhold next second question is, if you have
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africa and ck in send money to them and you send hem and they send you tax id, do you have right to apply with id? -- tax tax return -- the first dn't gets part of the question, i got the part of the question if your back in africa and have you id number for them, that the i.r.s. gave, can you on your income tax return as dependents? to me that there are rules about that, depending here you live, you may be able to do that, where your children contiguous the country rule and certain countries, if your children don't live with you in the you may be able to claim them, you'd have to look that up in the i.r.s. whether the country your children are in is something the i.r.s. would recognize. didn't really get the first
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question. host: that is all right, we have a little time and several more callers. phil is in pennsylvania. good morning, phil. caller: yes, good morning. yes, good morning, can you hear me? yes.: caller: my concern was what do ou do about fraudulent tax preparer? call nothing regard, my daughter had her taxes done by a company pretty statewide that has a lot of offices and they come up with get your money today, you can get your money today, she did it the year that and got her money day and then the next time, this year, she did it, they charged an exuberant amount $685 to prepare her taxes and when she taxes done, they took that money and said we're not the one that figure out if you money, that is another company. by the way, you can't get your money today, youville to wait eight weeks like everybody else. what besides taking them to do you usiness bureau, look into fraudulent tax
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preparers like that? hat is a scam, they are scamming people, telling them to get one thing and taking the they overly xosh tantly charged them to do to get that giving it to them. guest: this is exactly the issue about the regulation, i do think things you few should do. in addition to better business bureau, look at your state fraud division, most attorney, state attorney general offices have division that looks consumer fraud. and some actions, some states have brought legal action and n against certain chains within their state that where they have perpetrated that of behavior. on the federal side, my office doesn't do that kind of investigation, but the inspector eneral for tax administration tigda, treasury tax inspector administration. they have a website, you can
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ind where to report that and they may investigate. they get a report, they catalog it. when they see a number of eports about a particular entity, it may be worth while to bring on an investigation. here is also a criminal investigation division of the i.r.s. and fraud referral line there, you can also report there. i think if you have the time, those uld do all of thin often consumer branch of the attorney general's office in many states on these things. host: to judnespringfield, massachusetts. judy, good morning. caller: good morning. i have a question. elderly mothermy alzshgheimers. disability myself, how old do these people have to be
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to continue paying their taxes? guest: so if she's on limited she may be below the filing threshold. or 1040-a ng of 1040 that ctions, is a segment says, do you need to file your -- it will t can tell you, give you a worksheet whether ou figure out she needs to file an income tax return that year. of if she gets certain kinds income, she may need to file her taxes in order to tell the i.r.s., for example, if she has capital gains or losses from stock, she needs to tell the i.r.s. what the net is because otherwise the i.r.s. will say, okay, she owes the on the full amount of stock sale. there is some instances she
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could be below the filing threshold, she needs to tell the i.r.s. certain information. host: end it there with nina olson. your i.r.s. national taxpayer advocate, thank you for the time. thank you. host: that will do it for today's "washington journal," see you back here tomorrow eastern, 4 a.m. pacific v. a great monday. >> neil gorsuch six seat on the supreme court today. they look at u.s. news & world report. the swearing in process began early this morng


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