After writing the blog about the trouble we are having with my father and the IRS (read it here), I have been overwhelmed by the response. People have offered encouragement and tips, expressed outrage, and have even shared their own IRS horror stories. I am so grateful to all of you who have commented, shared my blog on Facebook and Twitter, and sent me private messages of support.
What I didn't talk about in the last blog is our attempts to resolve this issue with the IRS. When my dad moved in with us after finding out about his terminal neurological disorder, I helped him apply for disability. Not long after he started receiving benefits, the IRS put a levy on his social security benefits and started taking $300.00 a month. We didn't know about his tax problem at the time, so my brother and I sat down and talked to him about it. He said the original tax bill was somewhere around $50,000. We found out that he sent them a check for $25,000, but could not afford to pay the entire amount. Due to his medical condition, he had started to make bad business decisions and had trouble keeping track of his finances including things as simple as balancing his check book.
I told him that the tax bill needed to be taken care of, so if the IRS was taking $300.00 a month, that would help pay it off. After that first year, the IRS increased the amount they were taking to 70% of what my dad was getting, causing some financial problems for him, and also for my husband and myself since we were having to pay more of his care costs.
In the meantime, my brother called the IRS to find out what was going on with dad's case. They asked him fill out a power of attorney which was standard and then fax it to them while he was talking to them the next time. We got the necessary paperwork and filled it out putting my brother and myself on the power of attorney to be able to act on dad's behalf. This was in 2007.
My brother called the IRS back and faxed the paperwork while he was talking to them on the phone as they requested. They only gave us minimal information even with the power of attorney and said it would take several months to process it, so we needed to call back. We told them we needed all the paperwork concerning our father's case, so we could get the matter resolved. They said we would have to wait until the power of attorney was processed. We waited several months and called back. They had no record of our power of attorney, so my brother faxed it again and sent them certified copies by mail, but we got the same story every time we called. This nightmarish circle continued for over a year. No matter how many times we mailed or faxed powers of attorney, they were never recorded or approved.
We decided to get a certified tax specialist involved who is actually an Enrolled Agent -- a CPA who has to take a special test administered by the IRS. These people can act on your behalf with the IRS. She was very experienced and accepted my father's case. When she contacted the IRS to get his paperwork, she ran up against the same problem. No matter how many times she sent in a power of attorney, it kept disappearing. They never registered her power of attorney. She eventually dropped our case.
We have continued in that same circle with them saying they want us to fill out a power of attorney and expense/earnings report, but they never get approved or processed, and you can NEVER speak to the same person twice. This last year, my brother lost his mind on the IRS person he talked to, threatening a lawsuit, and they started sending the paperwork. It still took a year and numerous phone calls to get all of the paper work we needed to take to the new CPA.
On the last report we received, we were relieved to see that my brother was finally listed as having power of attorney. When they pulled this last trick and started taking 100% of my dad's funds, leaving him with no money to live on and no money for us to move him into the facility he needs for his care, my brother called to try to talk to them about this issue. The person he talked to told my brother that he didn't have power of attorney. My brother told him that he did, and that he was listed on the paperwork we received from the IRS as having power of attorney. They IRS employee said that he didn't and hung up on him.
I tried to call since dad was here. I could have him talk to them and tell them they could talk to me. When the IRS employee got dad on the phone, she started grilling him for information until he got so upset and confused he turned red and couldn't talk. I took the phone from him and tried to explain to the woman that they were taking 100% of his benefits and that he needed care. I told her I had a letter from UC Davis explaining his medical condition and his need to be placed in a care facility. She said she didn't want to see it because it wasn't important. She directed me to fill out a power of attorney, and threatened to hang up on me for being upset and raising my voice.
It has finally dawned on us that they don't want to resolve the issue as long as they can keep taking his money. The people you talk to at the IRS are not authorized to resolve anything. They are there to gather information and try to get more money. Their offer to resolve tax problems is just a bunch of smoke and mirrors to keep you running around in circles filling out forms they never process while they continue to take your money. You have to hire professionals to actually fight them, but they don't leave you any money to pay for it. We were told to contact the tax advocate who helps when the IRS is not cooperating. They told us to fill out a power of attorney.
What started out as a $50,000.00 tax bill that my father paid $25,000.00 towards has ballooned out of control. With interest and penalties assessed by the IRS, they now say he owes almost $250,000.00. When we figured out the money they have taken from his disability benefits and the $25,000.00 check he sent them, he has paid close to $100,000.00. The $250,000.00 is what they say he still owes for a grand total of about $350,000.00 for that initial balance of $25,000.