Are you a high-income individual who hasn’t filed a tax return for 2018 or a previous year? Been ducking your tax bill? If so, you might be getting a knock on your door.
The IRS announced it’s going to increase face-to-face visits over the next several weeks to people who earn more than $100,000 and have repeatedly ignored payment-due notices from the agency.
The home drop-ins aren’t meant to frighten or intimidate people — just bring them into compliance, said Paul Mamo, head of collection operations for the IRS’s small business/self-employed division.
“We want to really protect the integrity of the tax system by ensuring that everyone is adhering to their tax filing and payment obligation,” Mamo said.
The agency expects an initial 800 visits across the country conducted by dozens of officers by the end of March, with thousands more expected throughout the rest of the year.
People may get a call to set up an appointment to discuss their tax debt, but in many cases, the revenue officers will make unannounced visits, said Hank Kea, the director of field collection operations.
“These visits should not, will not, come as a surprise to the taxpayer, because the IRS has contacted these individuals multiple times regarding their tax issues prior to their cases being assigned to an IRS revenue officer to address,” Kea said during a recent conference call with reporters.
The revenue officers are trained civil enforcement employees who will conduct interviews to determine the best way for people to voluntarily file their returns and pay whatever they owe.
I need to pause right here. A lot of people have been getting fraudulent calls claiming they owe nonexistent tax debt. It’s important that you take precautions so as not to fall for one of these cons. Scammers may use this latest announcement from the IRS to scare even more people into giving them money or revealing personal information.
Revenue officers will always provide two forms of official credentials that include a serial number and photo. Most importantly, they will not threaten you with arrest or demand you pay the IRS with gift cards or some other unusual payment method.
The visiting officer will request you pay up, but you’ll be given a number of options, including setting up an installment agreement. If you haven’t been getting correspondence from the IRS, you are not a target. Again, the IRS is focusing on people who know they owe.
“There have been several contacts made to these taxpayers over the course of several months and, in some cases, several years,” Mamo said.
The effort to track down high-income tax scofflaws is part of a larger initiative to collect all overdue taxes.
Over the next few weeks, the IRS plans to add about 850 employees spread out in 19 locations to staff key collection telephone lines. Earlier this month, the agency said it was gearing up to hire 1,000 additional seasonal workers who are being specially trained to handle calls from people who have received balance-due notices for unpaid taxes.
“In those instances where the taxpayer refuses to file or pay their taxes, it’s important to remember that IRS has a number of options, including civil enforcement actions, even, when appropriate, considering pursuit of criminal cases against those who refuse to comply with the law,” Kea said.
Even if you can’t pay your bill, you should still file your tax return by April 15. The failure-to-file penalty is usually 5 percent of the tax owed for each month that your return is late, up to a maximum of 25 percent. By the way, filing an extension does not give you more time to pay your tax bill. It just gives you more time to file your return.
There’s also a penalty for failing to pay your entire tax bill on time, plus interest.
I asked the IRS for an example of how such penalties can rack up. Let’s say a person had a hypothetical tax bill of $15,000 on a 2017 income tax return that was supposed to have been filed by April 15, 2018. The individual eventually filed the return a year later but without having made any payments on the debt.
The penalty for failing to file would be $3,750. The late payment penalty would be $900. After penalties and interest, the total due would be $20,464.42.
If you can’t pay and you’ve been getting notices, it is critical that you contact the IRS as soon as possible, because interest and penalties can quickly add up. The longer you wait, the worse it gets.
If you’ve received a balance-due notice in the mail from the IRS, find the toll-free number and call it to discuss payment options. Don’t wait for the doorbell to ring.
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