Common IRS Questions

Common IRS Questions

Tax time remains one of the most stressful periods of the year for millions of Americans who are unsure about the finer aspects of dealing with the Internal Revenue Service (IRS). Professional preparers, and indeed the IRS itself, are inundated each year with innumerable IRS questions from taxpayers who are afraid that they will somehow make a mistake on their return and end up facing the dreaded IRS audit. Thankfully, there are many resources available to the average citizen to help ensure that the tax return preparation process goes as smoothly as possible. Here are a few of the most common IRS questions that people ask about dealing with the Internal Revenue Service.

How do I get copies of old returns?

For those who keep poor records of their financial transactions, or who have simply lost those records due to a fire or in the process of moving, how to get copies of those old returns is one of the most asked IRS questions each year. There are two simple ways to obtain those old returns: 1) request a copy from the IRS; and 2) request a simple transcript of the returns. An actual photocopy of the returns in question costs almost $60 and often takes as long as two months to receive. The transcript can be obtained at no cost, and is generally acceptable for most needs – including mortgage applications, student loans, and other financial disclosures. The only drawback to transcripts is that they only go back three calendar years, whereas a photocopied document can be had for any year in which you filed.

What’s the difference between a levy and a lien?

Among IRS questions that people ask, the difference between a levy and lien is another that is commonly asked. The difference between the two is really just a matter of degree. While both are collection methods used by the IRS to recover unpaid tax liabilities, the levy is the more active form of collection. It includes garnishing of wages, bank account seizures, and property seizures. Wage garnishment is the most common of the methods. Lines are less active methods for collection of tax debt, and simply place a claim on property that you own so that the IRS gets the first portion of any sales proceeds. Liens are only lifted by the IRS after your entire debt is repaid.

How can I tell if I am an injured spouse?

With the high rate of divorce, tax liability issues often become one of the most important IRS questions when any couple separates. As a result, there are often instances in which one spouse has contracted tax debt, for which both are then held liable. The IRS has an exemption to this rule that involves filing an Injured Spouse Allocation form to enable the spouse who did not incur the debt to obtain relief from any withholding of tax returns or garnishing of wages.

There are many other common IRS questions that people have, and they cover almost every conceivable issue that you can imagine. Many of the answers to your questions can be found on the website of the Internal Revenue Service, or those of various professional tax preparation firms.