What is the name of your state (only U.S. law)? Washington
In 2006, my husband (married in 2007) was supporting his youngest brother and sister in CT. In 2007, for the 2006 tax year, he filed as head of household with his youngest brother and sister as his dependents. He received his return, so he thought everything was gravy.
Fast-forward to January, 2008, 4 months after we got married and we were living in TX. We filed our taxes jointly and anxiously awaited our return. We e-filed so we expected a return within 2 weeks. 6 weeks later, we still hadn't received our refund so we checked the status online. It said there was a problem and to call.
So my husband called and was informed that he had been audited. He was told that they would put a hold on the penalties and interest so that we could work this out. That was the first lie. What the person actually did was put a 60-day delay in which we could arrange and start a payment plan. He was never informed of anything other than "they put a hold on penalties and interest until it got resolved".
He had never received the audit report, which they sent to an address he hadn't lived in since 2005. Please note that when he moved, he changed his address with the IRS and I guess they decided to send it to a previous address anyway.
My husband has called the IRS at least two dozen times. Here's what we've learned so far from those phone conversations:
- We had to set up a payment plan in order to not have them garnish his wages.
- The supposed reason he was audited was because even though he filed as Head of Household, the IRS put him in the system as Single and therefore wasn't eligible to claim dependents.
- That "hold until we work it out" was a lie.
- They supposedly re-sent his audit report three times since late February, but we've never received it.
- The Injured Spouse Allocation form and other documentation that I sent in has been sitting on someone's desk without being looked at since March.
- He called yesterday about a discrepancy in our current statement and was told that the balance is over $1,000 even though the monthly statement says the balance is $866.
- He was late on his last payment due to the fact that the IRS had my address (even though I changed it to my current address 4 1/2 months before) was actually the temporary address we were getting our mail at while we were in the process of moving to WA, so instead of charging the 1/2% interest that the monthly statement said they were charging, they claimed it as a default on the account and charged a $45 fee.
- The amount of money that we are able to pay will essentially never be able to pay off the debt because of the interest and penalties that they are charging as a result of their not informing my husband of his audit until 2 years later.
It is interesting to note that we've been waiting since February to receive the audit report, but we received the notification of our payment plan establishment in 9 days.
We contacted the Taxpayer Advocate office in our region, she opened a case for us... but it's been 7 months since then and all we're doing is paying more and more money.
My husband physically went to a local IRS office back in April and was told that they could not do anything there, was given paperwork to send to an office in California. The official there looked over the documentation my husband has for proof of support and told my husband that he should have no trouble appealing the audit.
I'm currently unemployed but looking for work, my husband is employed but only makes around $11,500 a year and we're renting a room from my parents. Obviously we don't really have the financial means necessary to hire a lawyer, but this is seriously ruining our life. What can we do to help expedite this process? I've spent hours searching for information, but other than the channels we're already going through (tax advocate, payment plan, sending all appropriate paperwork), I don't know where to turn.
I know this was a very long read, but I hope someone hear can help, or at least point me in the right direction. I appreciate it.