Where could you email IRS a question?

[JenMO]

There was a thread on this, but I can't find, anyone remember?

[JG EA]

I wouldn't - unless it is a letter ruling.

[Questionguy101]

http://www.irs.gov/help/page/0,,id=120294,00.html

[Jiggers]

A nice service provided by the IRS. It does take time to get a response. But you can e-mail them with a question.

[Koss]

Mixed results

I've only used this once or twice over the years, and I wasn't impressed.

The function is not completely worthless, but its value is limited. You do in fact get a written response from the IRS, which, in some cases, can be used as a basis for waiving penalties, even if the answer itself was wrong.

Research by the media and various agencies over the years has shown that the IRS often gives wrong answers by phone, and the website is no different. In fact, the site begins by saying:

This site was created to answer general tax questions. This is NOT the site for highly complex tax issues...

There is a very high probability that you will get a response that is literally "cut and pasted" from an IRS publication. The site actually tells you this:

To answer you accurately, economically and quickly, we may give you a 'pre-prepared' response, if available. Therefore, you may receive more explanation to your question than requested. Thank you in advance for your understanding.

And if your question is specific and unusual enough that they can't give you a "cut and paste" response, you may get a response that doesn't really answer your question.

I don't mean to be pessimistic, but this is the reality.

If the answer can be found in the pubs or instructions, that's what you're going to get. If the answer can't be found in the pubs or instructions, then there is a very real possibility that the person responding to your message will not fully understand the question.

You'll get a faster, more accurate answer on this board.

BMK

[Koss]

Further Thoughts

The paradox, or the irony, is that most of us on this board are probably more qualified to find an answer than many IRS representatives.

The IRS is an administrative agency that is part of the executive branch of government. They have the task of enforcing the tax law, and to do so, they have to interpret the tax law. But sometimes they interpret it incorrectly. And sometimes this happens at the highest reaches of the IRS. When a call center rep gives the wrong answer over the phone, it's just that--the wrong answer. But even IRS appeals officers and in-house counsel sometimes get it wrong. And that's why we have the courts.

Loosely speaking, as an administrative agency charged with enforcing the tax law, the IRS operates a little bit like a police department, or a health department, or an agency such as the Federal Communications Commission.

When you call or e-mail the IRS with a question, you might as well be calling up your local police department to ask them whether something is legal or illegal. If they can look it up quickly in some handbook, like, say, can you park on a side street between midnight and 5:00 AM on a federal holiday, you'll probably get the right answer. But if it's something more subtle, you're either going to get a wrong answer, an incomplete answer, or they'll tell you to call a lawyer or contact the prosecutor's office. They really don't know, and they're not really expected to know. In complex criminal cases, it is the prosecutor, sometimes in consultation with a detective, who decides what kind of charges to bring. Uniformed police officers aren't given a lot of training on how to interpret the law.

When you talk to the IRS by phone or by e-mail, you might as well be talking to a uniformed police officer. A revenue agent who handles field audits has a role similar to that of a detective, and has more training. But that's not who you get when you call or e-mail.

BMK

[kpangelinan]

Agreed and Agreed!

I've only used this once or twice over the years, and I wasn't impressed.

The function is not completely worthless, but its value is limited. You do in fact get a written response from the IRS, which, in some cases, can be used as a basis for waiving penalties, even if the answer itself was wrong.

And if your question is specific and unusual enough that they can't give you a "cut and paste" response, you may get a response that doesn't really answer your question.

I don't mean to be pessimistic, but this is the reality.

If the answer can be found in the pubs or instructions, that's what you're going to get. If the answer can't be found in the pubs or instructions, then there is a very real possibility that the person responding to your message will not fully understand the question.

You'll get a faster, more accurate answer on this board.

BMK

Agreed!

The paradox, or the irony, is that most of us on this board are probably more qualified to find an answer than many IRS representatives.

The IRS is an administrative agency that is part of the executive branch of government. They have the task of enforcing the tax law, and to do so, they have to interpret the tax law. But sometimes they interpret it incorrectly. And sometimes this happens at the highest reaches of the IRS. When a call center rep gives the wrong answer over the phone, it's just that--the wrong answer. But even IRS appeals officers and in-house counsel sometimes get it wrong. And that's why we have the courts.

Loosely speaking, as an administrative agency charged with enforcing the tax law, the IRS operates a little bit like a police department, or a health department, or an agency such as the Federal Communications Commission.

When you call or e-mail the IRS with a question, you might as well be calling up your local police department to ask them whether something is legal or illegal. If they can look it up quickly in some handbook, like, say, can you park on a side street between midnight and 5:00 AM on a federal holiday, you'll probably get the right answer. But if it's something more subtle, you're either going to get a wrong answer, an incomplete answer, or they'll tell you to call a lawyer or contact the prosecutor's office. They really don't know, and they're not really expected to know. In complex criminal cases, it is the prosecutor, sometimes in consultation with a detective, who decides what kind of charges to bring. Uniformed police officers aren't given a lot of training on how to interpret the law.

When you talk to the IRS by phone or by e-mail, you might as well be talking to a uniformed police officer. A revenue agent who handles field audits has a role similar to that of a detective, and has more training. But that's not who you get when you call or e-mail.

BMK

Agreed!

[kpangelinan]

Love this board....

I use two tax forums and this board and TTB have been by far, my greatest asset in looking for direction (sometimes just flat out straight up answers).

I try to give back as much as possible on here if I can help as a way to help repay as well as be a faithful buyer of the book each year.

[JenMO]

My question - Why is IRS sending the making work pay credit to 4029 exempt individuals? I thought maybe if I asked the question to them, they would look into their software. Perhaps I'm wrong, but my software won't calculate if 4029 is indicated and if you look at the earned income worksheet, it specifically says do not include income exempt from SE. Now clients are receiving MWP money included with their refunds, and I'm getting calls. I think we should send money back. Any other's had experience with this?

[Koss]

Schedule M

From what you've said, it does sound like the IRS software is not working properly.

About two years ago, I contributed to a thread on this board that addressed this issue with respect to the Additional Child Tax Credit. The question was the same, and the conclusion was the same. A net profit on Schedule C is not considered earned income for purposes of the Additional Child Tax Credit if it is exempt from self-employment income.

This point is easy to overlook, because the applicable instructions on Schedule M, and also on Form 8812, simply tell you to enter your "earned income." On both forms, this phrase is immediately followed by the words "see instructions," in parentheses.

On Schedule M, the instructions actually tell you not to include income that is exempt from self-employment tax. But on Form 8812, the instructions do not say this explicitly. They refer you back to the worksheet for the Child Tax Credit, and to IRS Publication 972, Child Tax Credit.

To answer your original question, or rather your meta-question, or your question about your question...

I don't think the folks who respond to e-mailed tax questions would know how to escalate the fact that the IRS software is incorrectly calculating the Making Work Pay Credit. You'll probably get the "right answer," since it's right there in the instructions for Schedule M. But if you ask them why the IRS is computing the credit, they'll tell you to call IRS customer service to address that specific taxpayer's account.

If you really want to see the issue addressed, you need to take a different approach.

On the individual taxpayer level, you could try the practitioner hotline. Those reps are very well trained, and if they recognize the error, they might be able to fix it, and adjust the taxpayer's account, right over the phone. And then your client can send the check back, or if it's been cashed, send the money back.

As for addressing it as a systemic issue, you might want to send a snail mail letter to the National Taxpayer Advocate, or even the Commissioner of Internal Revenue.

Fixing this kind of problem involves people who work in a department of the IRS that has no contact with the outside world. You're talking about IT staff, or computer programmers, who also have tax knowledge. Many are accountants who also have computer science degrees. Their job is to write software that does what the tax forms do. And these people don't take phone calls, or read e-mail, from taxpayers or tax professionals.

Good luck!



BMK

[Koss]

Form 8812

As I mentioned in my post above, I was involved in a thread back in 2009 that dealt with whether Schedule C income that is exempt from self-employment tax would qualify for the Additional Child Tax Credit.

Some may be skeptical of the anecdote that I am about to relate. For obvious reasons, I am not going to disclose the name of the person involved. So you can take my word for it, or not...

I am among the few participants on this board who routinely includes an e-mail address in the signature of all of my posts. I respect others' decision not to do so. But this factoid is an important part of my story.

Back in May, 2009, I received an e-mail message from an employee of the Internal Revenue Service. The originating e-mail address had the domain name irs.gov.

Here's the complete thread:

Subject: exempt 4029 Amish and additional child tax credit
Date: Wed, 27 May 2009 13:48:52 -0500
From: name.redacted@irs.gov
To: koss@usakoss.net

I have read the comments between you and another from The TaxBook. I'm still unclear to who is right. Taxpayer is Amish, self-employed income, Form 4029. Preparer did not claim credit, but based on the forms and worksheet, he is entitled to the additional child tax credit. Preparer states that Amish is not because he didn't pay self-employment tax.

Subject: Exempt 4029
Date: Thu, 28 May 2009 02:55:08 -500
From: koss@usakoss.net
To: name.redacted@irs.gov

Do you want a short answer or a long answer?

:-)

The short answer is: My conclusion is that he is NOT eligible for the credit.

Here's the long answer:

The Additional Child Tax Credit is authorized by IRC 24(d), as an extension of the Child Tax Credit. This code section allows a portion of the credit to be refundable. The refundable portion is calculated using a rather complicated formula that is difficult to follow in the text of the law. In plain English, the refundable part of the credit is the LESSER of:

(i) 15% of the amount by which the taxpayer's "earned income" exceeds $10,000, or
(ii) the total social security taxes paid by the taxpayer during the year.

This section of the code defines "earned income" by referring the reader to the definition that is used in IRC 32, which is the code section that authorizes the Earned Income Credit...

IRC 32 defines "earned income" as wages and salaries, plus "net earnings from self-employment," as this term is defined in IRC 1402(a).

Section 1402(a) is the code section that authorizes self-employment tax. That section defines "net earnings from self-employment" as "income derived by an individual from any trade or business carried on by such individual." This section then goes on to define "trade or business" by referring the reader to IRC 162, but provides a list of exceptions. For purposes of self-employment income, the term "trade or business" does NOT include "the performance of service by an individual during the period for which an exemption under subsection (g) is effective with respect to him."

Subsection (g) of IRC 1402 is the section that exempts the Amish from self-employment tax.

So...

Earned income, as this term is defined for purposes of the Additional Child Tax Credit, does NOT include self-employment income that is exempt from self-employment tax.

This is buried in the minute details of the instructions for Form 8812.

The instructions for line 4a of Form 8812 direct the taxpayer to enter his earned income, but refer him to the instructions on the back in order to determine what is and what is not considered earned income. On the back of the form, there is a chart which states that anyone who is self-employed should use Pub. 972 to figure the amount to enter on line 4a.

Your taxpayer is self-employed. His self-employment income is exempt from self-employment tax, but he is nevertheless self-employed. Therefore, Pub. 972 must be used to determine his earned income.

Wading through Pub. 972 will lead you to a lengthy worksheet on page 8 (of Pub. 972). On line 2b of this worksheet, the taxpayer is directed to enter the net profit from Schedule C, but the instructions for this line of the worksheet also say: "Do not include any statutory employee income or any other amounts exempt from self-employment tax."

Carefully following the instructions for Form 8812 and the worksheet found in Pub. 972 leads to the same conclusion as my reading of the Internal Revenue Code. For your taxpayer, on Form 8812, the amount entered on line 4a is zero.

BMK

Subject: Exempt 4029
Date: Thu, 28 May 2009 05:30:22 -0500
From: name.redacted@irs.gov
To: koss@usakoss.net

Thank you, this is what I need.

Yep.

Believe it or not, a staff member at the IRS was looking at The Tax Book message board for help.

Looking back at the the text of the e-mail message from almost two years ago, it now appears that this rep was dealing with a case where the IRS had computed the Additional Child Tax Credit, and the preparer was telling the IRS that they were wrong.

And that's exactly what JenMO is trying to do with respect to the Making Work Pay Credit.

BMK

[Koss]

Wow!

Sweet mother of Abraham Lincoln...

Here's the original thread, from February, 2009, that prompted the e-mail message from a staff member at the IRS:

http://www.thetaxbook.com/forums/showthread.php?p=75104

Guess who started that thread?



BMK

[Mike Mac]

I used the "email your question" service to the IRS is regard to a unique situation that I brought up on the this board a couple months ago. It was in regard to the parsonage allowance for a retired minister client of mine who is currently serving a long-term jail sentence. The question revolved around a couple of points (what would be viewed as a "temporary absence" and if the retirement funds were still being used for the upkeep of the home of his wife and children could the deduction still be taken).

I did get a response after about six weeks and it did not seem to be a cut and paste job. I'll dig it back out and post it so people who have not tried it can see a real example.

Mike

[JenMO]

Yes it was me, again, different "give-away". I'm sending back checks marked VOID with explanation and copy of worksheet where it says not to include income exempt from SE. Don't know if it will make an impression. Why doesn't the IRS software work as well as ours?

[kpangelinan]

Cool....

Sweet mother of Abraham Lincoln...

Here's the original thread, from February, 2009, that prompted the e-mail message from a staff member at the IRS:

http://www.thetaxbook.com/forums/showthread.php?p=75104

Guess who started that thread?



BMK

Wow...cool.