Really Really Old Chargebacks

[Corduroy Frog]

Just had a lady with a $3200 refund. $2500 was charged off against a tax liability from 2001 and 2002. She is single now but was married then.

IRS has not provided any details. We don't know whether her ex-husband had a payroll tax liability or 1040 liability from that time frame. IRS has not explained the charge-off as to how much was tax, penalty, interest, etc.

How is the best way to find out? Can they provide information that old? I think there is a form which must bear a user fee, but not sure it goes back that far. IRS certainly didn't have any qualms about going back "that far" to collect.

[Koss]

Refund Offset

I'm not sure you'll be able to deal with this sort of thing with any standardized form.

I don't think the IRS retains tax forms that far back. They may not even be required to retain a transcript. On e-services, you can't get a transcript for anything over three years old.

Form 4506 says that copies of tax returns are "generally available for 7 years from filing before they are destroyed by law."

2001 and 2002 are probably gone, unless they were filed late.

But they have to produce something. And your client may be able to pursue innocent or injured spouse relief.

My guess is that all you'll get is a Notice of Deficiency.

That should tell you whether the liability arises from a Form 1040, or from a Form 941, or from something else. And it may have some additional details.

The IRS may not be required to produce anything else.

A Notice of Deficiency is almost like a judgment. It's not exactly the same, but the effect is very similar.

If you are sued in state court, and you lose, the court enters a judgment against you. Then you have a certain amount of time to appeal. If you do not appeal, the judgment becomes final and enforceable. At that point, the judgment itself is sufficient to prove that you owe the money to the other party. The other party is not required to retain any documents or evidence that were used in the lawsuit. The court clerk may retain some records, but only for a certain period of time. And something such as live testimony from a trial may not be in the record if a transcript was never ordered. The record of the case becomes stale, and over time it can decay or evaporate.

A IRS Notice of Deficiency is very similar. You have 90 days from the date of the notice to file a petition in the US Tax Court to challenge a notice of deficiency. Once that period expires, you have forever lost your right to challenge the accuracy of the notice.

But your client may still be able to pursue innocent or injured spouse relief.

I would probably start with the practitioner priority line, or with the Taxpayer Advocate.

BMK

[joanmcq]

You can get an account transcript that old by calling practitioner's priority (may be available on e-services, but I'm not sure). I did an OIC for personal and payroll tax liabilities abut 6 years ago and got account transcripts going about 15 years back (there had been actions that extended the statute) that showed all of the penalties, interest, and original taxes. They may have to mail them to you, but the info is there.