frivilous return?

by Mitchell Frost
(New York)

I am a minster and have not yet received my tax refund for my 2009 return.

The IRS requested to see my W-2 because my withholdings were very high compared to my income. This is because the church withholds extra from my paycheck in order to pay on my social security and medicare tax. This is so I don't have to send in estimated payments each quarter for SS and medicare tax. I did send them my W-2 as requested.

I very very much need the money from my tax return and am afraid I will not see it. I was sent a letter from the IRS that stated I filed a frivolous return. The letter stated reasons why it is illegal not to pay taxes. I have no idea why this letter was sent. I filed my taxes the same way in 2008, and received my tax refund without any delay.

I am also afraid I will be assessed penalties by the IRS for the frivolous return! Tax professionals and other ministers have viewed my return and claim it was filed correctly.

Not sure what I should do?

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Comments for frivilous return?

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Jul 13, 2010
Frivilous return?
by: Phil Collins

Dear Mitchell,

First, I would suggest take a deep breath and while doing so know that this is probably not as serious as the letter says. Second, I would do some searching and asking around to find an experienced Enrolled Agent to talk to. An Enrolled Agent is a tax practitioner who has passed the IRS exam and has expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals. Usually an experienced Enrolled Agent can handle a situation such as yours better and less expensive than a CPA because they are usually more involved the IRS and often know the IRS auditors and have established a reputation with the IRS. They can represent you before the IRS and you will not have to actually face and talk with the IRS.

Jul 15, 2010
Tax Experts can help
by: Marcus in Texas

Can't add anything to the recommendations from Phil Collins. Time to call in an expert and have her / him intervene with the IRS. If that doesn't work, maybe it would be prudent to contact a member of the local congressional delegation and make them aware of the problem and of the position taken by the IRS.

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If you want to DIY your payroll, I highly recommend you look at using Gusto! It is very user friendly and their support is awesome! Plus they know how to set up and maintain payrolls for churches and nonprofit organizations.

Note: I am a "partner" of Gusto, but as I have told you before ... I never recommend anything that we or our clients have not tried and love =)

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