When no return is filed the computers in the sky (IRS)
compute a tax return for you as if you were single with
yourself as one exemption.=20 It does this by adding up all
the 1099s, W2s, etc it has for your social security number
for that particular year. If no tax is due or less tax than
your withholding in their possession, you will not hear from
them since the computer only generates info on people it
thinks owe money and most likely automatically generates a
letter to those applicable individuals.

However if they have 1099s, W2s etc the total of which
result in a tax due that is greater than your withholding
you will receive a letter requesting a return.

Since you received a letter, it would at least indicate that
they have information (correct or otherwise) you might owe
tax. Stock sales, Independent Contractor 1099 Misc being
issued, W2's that were forgotten as it does get confusing
etc might be the cause. Look carefully at your IRS letter
as it might contain a listing of what income they have
reported under your social security number.

If you think them wrong simply write and say your records
indicate you had insufficient income to file in the year in
question. This will not go away. I respectfully suggest
you either call them or answer the letter and get it cleared
up.

Good Luck

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"Mike Ballard" <dont_w[at]nt_spam.org> wrote:

- quote -

I would just send them back a letter stating what little
income you had and that you did not meet the filing
requirements for that year. Always keep copies of your
correspondence.

Gary W. Lundgren, EA
Proactive Taxpayer Advocates
Former MN Revenue Officer

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"Mike Ballard" wrote:

- quote -

If IRS had enough in 1099/W-2 documents on file, the notice
would have proposed computed tax. It's unclear what
deductions off bank interest might reduce to $800 AGI,
though, but they don't have enough total 1099s to compute a
tax on those alone. They're computer-sampling for
situations where an employee may have been self-employed, or
other situations. On any nonresponse, IRS then can manually
review all the computer data over several years, public
record data, maybe even google these days. In your case, it
would at least show you worked; you then had money in the
bank to live on; no unemployment comp means you quit; then
you found another job. So they should see no need here to
spend real time on the thing with further contact. It's
still better to send a simple response, citing merely
insufficient gross income. A computer is asking you. It
doesn't care if you get mad at it!

Fred F.

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Mike Ballard wrote:

- quote -

From a purely "selfish" viewpoint, I'll bet there will come
a time in your life (say, when applying for a loan or some
other benefit) when you will want to be able to "prove" that
you are in compliance with tax filing requirements.

MTW

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Mike Ballard at dont_w[at]nt_spam.org wrote:

- quote -

The IRS has very clear instructions on who does not need to
file. Generally, if your total income is less than your
personal exceptions and standard deduction, you don't have
to file. It is not clear from the information you gave
whether that was true or not. Was any income leftover after
deducting these two things? If there was $800 left after
deducting these things, you did have to file. Adjusted
gross income is the number you get before you deduct your
exemptions and deductions.

- quote -

If you don't check with them when they ask, they may reach
out and touch you in a very harsh way. Congress gave them
the power to do that.

- quote -

As Don Corleone says, just before having someone blown away,
don't take it personally. Its just business.

- quote -

File the return. You are challenging an 800 pound gorilla
to a fight over a trivial situation.

All freely provided advice guarantee correct or double your
money back

Frank S. Duke, Jr. CPA
Cincinnati, OH USA

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Mike Ballard <dont_w[at]nt_spam.org> wrote:

- quote -

Yes, unfortunately that would not be a good idea.

- quote -

This is what I would do. If there is a local IRS office, I
would take the return there and submit it over the counter
and get a receipt for it.

--
To reply to me directly, remove the CLUTTER from my email address.

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Mike Ballard wrote:

- quote -

Filing requirements are based on gross income not adjusted
gross income. In addition, is it possible you may have
overlooked an item of income that puts you over the filing
threshold?

--
Alan
http://taxtopics.net

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Mike Ballard wrote:

- quote -

Filing requirements are based on gross income not adjusted
gross income. In addition, is it possible you may have
overlooked an item of income that puts you over the filing
threshold?

--
Alan
http://taxtopics.net

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"Mike Ballard" <dont_w[at]nt_spam.org> wrote

- quote -

Actually, they are checking in with you. They have no real
idea of your "change-of-life situation" until you file or
otherwise respond to their inquiry.

- quote -

You're a smart guy, do you want a government employee to do
the math on a return they prepare for you?

- quote -

Yes.

- quote -

That'd work.

- quote -

That may also work.

Filing the return establishes the record. I'd mail in the
return.

--
Paul A. Thomas, CPA
Athens, Georgia
taxman at negia.net

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- quote -

Owing tax and being required to file are two different
things. You are required to file if your total income,
BEFORE deductions, is above a certain threshold (which
varies from year to year), regardless of whether or not you
owe any tax.

- quote -

They may do that. The IRS knows about most of your income,
including bank interest, but they have no way of knowing
about most of your deductions. So they will add up the
income they know about, subtract only the standard
deduction, and bill you accordingly. You will be much better
off if you just send in the return.

- quote -

Yes, very dumb. Never ignore the IRS. They are not going to
give up. It will only get worse.

- quote -

Yes, that's what you should do.

Bob Sandler

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"Mike Ballard" <dont_w[at]nt_spam.org> wrote:

- quote -

In my opinion, it is never good to just ignore an IRS
inquiry. Answer them explaining your situation. I am a
little confused, though, with what you said. What
deductions did you have in arriving at adjusted gross
income? Are you self-employed and had business expenses or
what? No one ever has W4 income, by the way. Form W-4 is
filed with an employer telling them how many withholding
allowances you are claiming. Also, IRS may be curious as to
how you lived with such little income for 2 years.

Wayne Brasch

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"Mike Ballard" <dont_w[at]nt_spam.org> wrote:

Before we get into your specifics, a general observation.
Unless you fashion yourself Don Quixote, ignoring the IRS is
NEVER a good idea. They don't just say, "Oh well, he's not
answering us, so we'll just fuggedaboudit."

- quote -

I assume here that you weren't working.

- quote -

This statement doesn't compute. "Deductions" don't come
into play until after AGI is determined. If you had taxable
income after deductions and personal exemptions, you
probably owe tax.

- quote -

Perhaps a few cocktails will control my crying.

- quote -

If you really don't owe anything you don't want to go this
route. Why cause yourself a lot of unneeded troubles?

- quote -

Yes.

- quote -

I'll take door number 3. Fill out the questionnaire. The
IRS has documents which show you had enough income to owe
tax.

--
Phil Marti
Clarksburg, MD

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Mike Ballard wrote:

- quote -

IRS requires you to file if your total income is more than
certain threshold amounts. You mention you had
"deductions" before getting to the 800$ AGI. What kind of
deductions? These may not matter in determining if your
total income compels you to file.

Did you perhaps have business income to which you applied
those deductions? (You did mention no W4, i.e. W2, income.
If so, that business income may be the trigger that put you
over the top for having to file.

Yes, I'd just go ahead and file anyway. May cost a 37 cent
stamp, but it's the easy away.

ChEAr$,
Harlan Lunsford, EA n LA

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"Mike Ballard" wrote....

- quote -

...................
- quote -

Some times the system has insufficient information to arrive
at the conclusion your clearly aware of, A reply on the
Questionnaire might be sufficient.

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A couple years ago I quit a job. For the following tax year
I had no w4 income. I did a run-through with turbotax and
my deductions covered bank account interest earned leaving
me with a gross adj income of $800. I owed no taxes and had
no refund so did not file.

Two years later (i.e., recently) the IRS sent a form letter
with questionnaire directing me to either file, fill out a
return and file or specify my reason for not filing. That
irks me, like I'm supposed to check in with them or
something when I have a change-of-life situation.

So I'm torn on principle between just ignoring them or
complying. I (think I) know it's not smart to mess with IRS
but OTOH I feel like it's none of their damn business why I
didn't file - I wasn't born just so I could report in to IRS
about every change in my life. If they have something on me
I'm unaware of then let them figure it out and bill me.

All things considered, think this (throwing the letter away)
is a dumb approach? Or should I send the completed return I
prepared but did not file? Or should I just write on the
questionnaire "$800 adj gr income; no taxes owed"?

Mike

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