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radrat

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IRS & You
« on: May 29, 2006, 10:16 »
Ok all my fellow coworkers out there listen up . I Just got back my audit paperwork for 2003 and it seems that the IRS has deemed me to be a "itinerant" , which to them in 2003 I had no real Tax home.
On the IRS website (http://www.irs.gov/publications/p17/ch26.html#d0e60081)once on the link scroll down and read ,Travel Expenses,Traveling Away From Home,Tax Home,Temporary Assignment or Job. you have to meet 2 of there 3 criteria for Revenue Ruling 73-529 (What Is Away From Home) and to them for that year they say I don't . I have received a bill from them including tax and penalties to well lets say 3/4 of what I got back that year. I have all my paperwork in order for where I lived what I spent money on, and the bills I pay while I was away from home working. I am sending a letter back with regard to their offer for me to pay back that money because I know I am in the right and they are wrong in there determination.
I wanted to let my fellow nukes know what could be in store for you if you get someone in the audit area looking at your paperwork and not finding anything wrong with the numbers and pulling this Ruling 73-529 out on you.

In my paperwork back from them they were nice enough to give me the highest alloted standard deduction though , oh ya they re-wrote my 2003 income tax forms to reflect this change. 

If any one has had some experience in this area or any advice please get a hold of me via message . Thanks and good luck!
RR
« Last Edit: May 30, 2006, 07:21 by radrat »

Offline Already Gone

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Re: IRS & You
« Reply #1 on: May 30, 2006, 11:44 »
I was afraid that this was going to happen.  Frankly, I'm surprised that this hasn't happened sooner, and to more of us.
If you don't meet two of those three criteria, you're screwed.  You can be convinced that you are right, but they are the ones who need to be convinced, and it seems that they aren't.
You need to hire a lawyer unless you plan to pay back all of the money.  At the very least, get a CPA who is an Enrolled Agent.  That is someone who is permitted by the IRS to represent you.  He/she can submit what is known as an Offer in Compromise.  This is basically you telling the IRS that you can't afford to pay what they say you owe, and offering to pay them what you can afford.
Unfortunately, you need the lawyer if you plan to get the ruling overturned.  It will cost you thousands of dollars in atorney's fees, and take years.  If you lose, they will make you pay the full amount plus interest that will continue to accrue while you are fighting in court.  The court, by the way, will start with an administrative law judge who basically works for the IRS.  You have almost no chance of winning there, but your lawyer will still charge you while wasting your time there.  Your best bet, I'm afraid, is to make the offer in compromise and hope they accept.
The other thing you can do is work it off by turning in your fellow techs to the IRS.  They'll give you a cut of whatever they collect from them.  If you choose this route, I'd recommend finding a new line of work too, since you won't exactly be popular among all the coworkers you screw over.
The next thing you must do, as should all of us, is ensure that you meet those criteria for having a tax home in this and all future years.
It is all too common in our business to do our taxes by the alternative "urban legend method".  Some of us do things like write off the difference between GSA rate per diem and the per diem we got as if it were a deduction.  Some of us work a long term job for 11 months at one place, take a month off, and then go back all the while collecting per diem.  There are other dumb things too, but these are the two biggest offences.
Someday, it will become common for travelling nuke workers to actually do taxes according to the federal regulations that are in effect, but it that doesn't get us back as much money as the way some HP told you you could do it. 
"To be content with little is hard; to be content with much, impossible." - Marie von Ebner-Eschenbach

radrat

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Re: IRS & You
« Reply #2 on: May 30, 2006, 09:20 »
Thanks for the insite beercourt
first things  first.  When I was first approched by the audit from the IRS I was asked for VERY specific things like travle expences , milage proof to and from work and to and from home. I provided every thing they asked for to the letter, and never once was asked where I lived when I was there working and where my TAX home was. Now, taking this into account I thought they would review the paperwork that I sent because I thought that was what the audit was based on.
  When I got the responce back there was never once a mention of the material that I sent and oh ya we dont feel that you had a tax home so your not elegible to itemize (even though I did meet 2 of the 3). Now I can understand if I made a math calc incorrectly on the paperwork , but to say that I didnt have a tax home is just not right.  Where do you think they sent the original audit paperwork to MY TAX HOME.
 If they say I live there by  sending it there then what gives  Is this a case of we cant find anything wrong so lets hit him with the old Revenue Ruling 73-529?
I do not have the Thousands of dollars it would take to fight it in court if it came to that and I would never turn in another Tech for a gimme.
  What I am going to do is send a letter telling them that I do have the proof that said in 03 my tax home was ******* and I  would be happy to send that info to them if they would just ask me for what they really need. This letter is going to the agent that is doing the audit , the Commissioner of the Revenue , and the attorney General . I dont reallly think that they will care what I have as proof or who sees it , as long as I dont just give up and turn over, never have never will.
sighhh... then just mabe to stay off the radar , I will make out a check , but at least I tried.
RR

Offline Already Gone

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Re: IRS & You
« Reply #3 on: May 30, 2006, 10:30 »
That's the best thing you could do - stay off the radar.
I've been hearing this from HP's for 19 years now.  Actually, you are not nearly the first one to be pinched in an audit.  You're just the first I've heard of that got hit with the "no tax home" argument.
I don't know you, but I can guess pretty accurately what your exact situation is.  Tell me if I miss anything.
1. You don't have enough mortgage interest, property tax, state income tax, medical expenses, and charitable contributions combined to itemize deductions on your 1040.
2. You itemized because you managed to come up with enough Unreimbursed Employee Business Expenses to put your itemized deductions over the top.
3. The amount of UEBE's was huge, otherwise they wouldn't have even exceeded the 2% of your AGI.  (You can only deduct the amount above 2% of AGI)
4. The ONLY WAY in the whole wide world that you could have that much Unreimbursed Employee Business Expense was to write off the government rate per diem as an expense, and claim your actual per diem as a reimbursement.  Basically claiming the difference between the gov't rate and your actual diem as a deduction.
5. You did this because someone told you that you could, but you didn't read the actual instructions as to how to substantiate expenses.  (If you had read and understood those instructions, you never would have taken the deduction)

If they wouldn't have nailed you for the 'no tax home" business, they would have gotten you on the per diem "writeoff".  Even though there are plenty of HP's and (sadly) quite a few tax professionals who tell you that this is legal, it is not.  I'm not going to bother explaining the rules at this moment, but you fell for a gimmick that the IRS does not allow.  The reason that so many people get away with it is simple; they only audit about 1.5% of the individual returns.  That means that you have a 98.5% chance of getting away with anything that the computer does not flag for an anomaly.  Honestly, I'm totally shocked that the IRS doesn't automatically audit every HP tech every year.  Even though they don't, I have always listed my occupation as "technician" just to be safe.

All I'm going to say right now about the Unreimbursed Employee Business Expense, is that if you are getting per diem and still claiming this deduction you are almost surely lying.  I don't care to sugarcoat that statement even if I knew how.  It's just the truth.  It's hardly worth the few bucks in taxes that you save to risk getting nailed for tax evasion.  Even though the consequences to you were nowhere near that severe, I'm betting that they still suck enough to make you wish you had never taken that deduction.

So, the best way to stay "off the radar" is to pocket the profit that you make off of per diem (you KNOW that you do, so don't BS me by saying that you don't) and leave it at that.  The IRS will leave you the hell alone as long as you don't get greedy by trying to make that profit look like a loss on your tax return.
"To be content with little is hard; to be content with much, impossible." - Marie von Ebner-Eschenbach

atomicarcheologist

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Re: IRS & You
« Reply #4 on: May 31, 2006, 06:54 »
radrat,  You should try the IRS Advocate.  877 777 4778.  They are very upfront.   Good luck.

radrat

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Re: IRS & You
« Reply #5 on: May 31, 2006, 07:47 »
geesh BC you make it sound so dirty!!
and like I said I have done nothing agenst the law here. I Follow THERE rules. Im not the one that made there tax law but I do follow it. I dont take the difference in the diem rates either , as you say it wouldnt be very smart. I only use the deductions that Im allowed to, hence them not finding a numerical proplem. I have heard in the past, peeps doing some strange stuff and getting away with it on the road with there taxes but I really do fly low on there deductions only taking what I should and what is leagal.
Thanks AA for the number.
RR

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Re: IRS & You
« Reply #6 on: May 31, 2006, 09:03 »
RR, it's not just you.  Actually, I see you as a sort of victim in this case.  You did what you thought was right, and now you have to write a check.  If I'm pointing any fingers here, it is at those people who convince unsuspecting working folks to pull those stunts.
I think you know who I'm talking about - the person who claims that he doesn't have to pay taxes to the US Treasury because lives in the Republic of Florida, or the guy who tells you that you can write off the per diem you didn't get, or the fool who thinks that he can work at one job for 3 years on per diem as long as he takes one month off per year.
Alright if these people want to gamble against totally stacked odds.  But, they suck in so many other unsuspecting people, and we know which ones get boned in the end.
"To be content with little is hard; to be content with much, impossible." - Marie von Ebner-Eschenbach

Offline Roll Tide

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Re: IRS & You
« Reply #7 on: May 31, 2006, 10:52 »
RR,

I think I see the problem. They have a grey area:

Quote
If you satisfy only two factors, you may have a tax home depending on all the facts and circumstances.

and only they can determine where you fall.
THE IRS = theirs

I was appreciative for the link, based on my taxes in previous years. While not in exactly the same boat as BC speculated (no per diem) I was in similar circumstances over "tax home".

Keep us posted, especially if Advocate does a good job. Sell them a Nukeworker banner ad!
« Last Edit: May 31, 2006, 11:11 by Rennhack »
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radrat

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Re: IRS & You
« Reply #8 on: May 31, 2006, 10:08 »
Well the letters went out today to above mentioned peeps.
BC Thanks for seeing my view of this situation , I read the review over and over agian and yes I do meet 2 of the 3 criteria stipulated in that review and thats a solid. As far as I  was told how it works is, now that your in the line of fire you will end up paying somthing. Like I said I will not give up without a fight and yep, I just might have to cut a check but at least I got to say my peace.
Unfortunitly I wont be able to post for a few days, Going to my next job so I will get there saterday , keep the posts going I still wanting more peeps to tell me if they have run into anything like this.
Roll Tide
when I get settled where Im going I will give them a call and I will mention the site banner to !
RR

Offline SloGlo

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Re: IRS & You
« Reply #9 on: Jun 02, 2006, 09:52 »
  When I got the responce back there was never once a mention of the material that I sent and oh ya we dont feel that you had a tax home so your not elegible to itemize (even though I did meet 2 of the 3).

unfortunately, meeting 2/3 only says you may have a tax home.  3/3 means you do have a tax home.  1/3 means you do not have a tax home.  according to the irs, you may have a tax home, but you will pay the additional tax calculated by them.  nutting personal, it's only biz, ya unnerstand.  their biz.  btw, it's also their court.
quando omni flunkus moritati

dubble eye, dubble yew, dubble aye!

dew the best ya kin, wit watt ya have, ware yinze are!

radrat

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Re: IRS & You
« Reply #10 on: Jun 04, 2006, 10:23 »
SloGlo
I understand what I said 2/3 is a solid , and what I ment to say was that if they needed proof of the 3/3 I have that for them to . and ya I understand that it there club and Im just a member in it . It cant hurt with the letter and all and if it gets the attention it needs thats a bouns , if it doesnt then at least I tried.
thanks for the input though.
RR

radrat

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Re: IRS & You
« Reply #11 on: Oct 30, 2006, 06:59 »
well its been a long and arduous wait but the wait is finally over. I know its been a while and Im glad to see that this subject hasnt been kicked off .
 I Just got a letter in the mail that states " we have reviewed your paperwork and have not found fault in your tax year 2003 and there will be no changes to the preperation of the recived forms."
 In otherwords they have looked at all my paperwork and found in my favor that my tax home was where I said it was and that I was doing the paperwork correctly.
I guess thats it , thanks for holding on to see what happened. thanks for all your input.
RadRat

Offline Rennhack

Re: IRS & You
« Reply #12 on: Oct 30, 2006, 09:19 »
That's great news JR.

Offline SloGlo

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Re: IRS & You
« Reply #13 on: Oct 30, 2006, 09:20 »
it's yer birthday.... congrats..... it's yer birthday!!!! ;D
quando omni flunkus moritati

dubble eye, dubble yew, dubble aye!

dew the best ya kin, wit watt ya have, ware yinze are!

Offline storm13

Re: IRS & You
« Reply #14 on: Jun 13, 2011, 04:33 »
Hey, look at me, a new guy dredging up a 5-year old thread...

I had a question/observation about this subject.

Early on in the thread, there was a suggestion about getting a lawyer and an Offer In Compromise as a possible option.  I'm wondering if that's really an option for someone in the nuclear field.  In the process of an Offer In Compromise, the IRS will generally file tax liens on your property until the payment terms are satisfied.  Would that not impact security clearance?

Just a question, and sorry to be dredging up the past.

Storm13

Offline Rennhack

Re: IRS & You
« Reply #15 on: Jun 14, 2011, 02:56 »
Early on in the thread, there was a suggestion about getting a lawyer and an Offer In Compromise as a possible option.  I'm wondering if that's really an option for someone in the nuclear field.  In the process of an Offer In Compromise, the IRS will generally file tax liens on your property until the payment terms are satisfied.  Would that not impact security clearance?

Just a question, and sorry to be dredging up the past.

The security portion of poor credit is in relation to your ability to be compromised/bribed into a security risk situation.  If you are working things out with the IRS, they probably wouldn't be too worried about you.

hatrai07

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Re: IRS & You
« Reply #16 on: Jun 14, 2011, 11:08 »
Here is a personal security vs IRS issue that came up with me. 

I was going to be denied access at a plant due to a >500k lien against me by the IRS. Security told me that I could agree to a payment plan and I would be ok.  I had been fighting with the IRS for several years on this issue and told security that I felt I would win ultimately.  Bottom line was I had to give up the fight to work at the nuclear plant and pay or resign before I was denied access.  I resigned rather than be denied access.  2 years later I won my fight with the IRS and owed nothing.  Fortunately, I could work my craft outside of US commercial or I would have been screwed for a half million bucks.

Offline storm13

Re: IRS & You
« Reply #17 on: Jun 14, 2011, 11:24 »
I suppose that reinforces Rennhack's interpretation that if you're "working things out" with the IRS, you're probably ok.  Since you were actively "fighting" the IRS, it cost your security clearance.  Just shows that with the IRS, it's "guilty until proven innocent" rather than the other way around.

Thanks guys. 

FYI, my questioning came in part because in my current non-nuke career I am (among other things) a payroll accountant and I see how the IRS can affect normal employees.

Offline traveltax

Re: IRS & You
« Reply #18 on: Jun 19, 2011, 02:43 »
More jobs that require licenses or security clearance are becoming contingent upon your status with the IRS and state revenue agencies. I have a few nurse clints that have lost their practice licenses over delinquent accounts and unfiled returns. As you all have pointed out, if you are actively engaged in addressing the delinquency, adverse employment actions are less likely.
Joseph Smith EA/MS Tax
Enrolled Agent, Admitted to Practice Before the IRS
TravelTax TravelTax Canada
www.traveltax.com info@traveltax.com

hatrai07

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Re: IRS & You
« Reply #19 on: Jun 22, 2011, 09:53 »
"if you are actively engaged in addressing the delinquency, adverse employment actions are less likely."

Actively engaged in the path THEY think you should be taking not just actively engaged in exercizing your rights.  You have more rights than setting up payments or submitting offers to compromise.  Plus not all delinquencies are delinquencies.  The IRS ( as well as other creditors) do make mistakes but in our business you are guilty until proven......no, hold that thought...  you are just guilty.

Offline Rennhack

Re: IRS & You
« Reply #20 on: Jun 22, 2011, 03:52 »
Actively engaged in the path THEY think you should be taking not just actively engaged in exercizing your rights. 

Not true.

 


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