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Tips For Calling The IRS

calling about tax fines and penaltiesOne of the fun things about being self employed is the taxes. I say that in the most sarcastic way because anyone who has ever had the opportunity to be their own boss understands how confusing and difficult IRS rules truly are. When you add multiple streams of income or money from things like rental property or dividends, it gets even more exciting.

I wasn’t really surprised when we got several notices after filing our taxes. It seems no matter how careful we are with keeping track of our business income and expenses, and even with hiring a CPA, the IRS always finds something wrong with our tax return. This year, one of our three notices was for a late corporate filing with a fine of $195! I knew I had the proper documentation to prove otherwise, so it was time to make the call. Speaking to the federal government is not for the faint of heart, so here are my tips for calling the IRS.

Have All The Proper Documentation

The reason I was so confident about calling the IRS was because I had a copy of the from we sent in to request an extension to file our corporate tax return. Those are due on March 16th, and our return was filed at the end of March, but I had the extension and the certified mail tracking to prove it was received before the deadline.

I first called in the evening and got right through to a representative who told me she would be happy to review the documentation after I faxed it. I offered to do it from work the next day because I don’t have a fax machine at home. Nope, you have to fax it to the representative while they are on the phone. I would have to call back the next day. Strike 1

Make Sure You Have Hours

I called the next day from work, where there is a working fax machine. However, since it was the morning, the wait time to speak to a representative was 15-30 minutes. Well, that certainly puts a damper on seeing patients who have appointments, so I put the IRS music on speaker phone and asked the front office to come get me if someone picked up.

At almost exactly 30 minutes, someone did answer. My front desk staff told them I would be right there. It took maybe 30 seconds to get to the phone, but the representative had already hung up. Strike 2

I called back, and we did the same dance. At 29 minutes and 53 seconds, a representative picked up and luckily, I was able to answer, only to find out I was at the extension for forms in the 940’s and my form was an 1120. He transferred me to another department where the expected wait time was 15-30 minutes…..Strike 3

Patience Is A Virtue

After 1 hour and 8 minutes of holding on that second call, I finally got to speak to a representative in the correct department who gave me a fax number for my documentation, which I sent immediately. However, the fax did not go through because the IRS line was busy. The representative seemed at a loss because she said the line was open and asked me to fax it again. Thankfully, she received the fax that second time.

Then, she asked if I could be put on hold again while she verified. I admit that I almost lost it. I had three people waiting on me and the staff was giving me the evil eye to get moving. I asked if that was necessary, and she told me I could mail the information or call back. OK, I’ll hold.

When All Else Fails, Be Human

After another ten minutes, she cleared my fine for the late filing, but she made me aware of another $400+ fine that was on its way for late filing of payroll deposits. I just can’t win!

I think I turned into a bumbling idiot at this point because I ranted on about how I really tried very hard to comply with all the deadlines and rules but his was my first year of having to do all the corporate stuff by myself, and does the IRS ever cut anyone some slack?

Not my finest professional moment, but to my surprise, she came back and forgave the whole $400+ fine except for $21. I have no idea really what this fine was all about because I haven’t even got the notice yet, but I’ll take $21 over $400 any day! Home Run!

I Understand Why People Just Pay The Fines

After spending over two hours on the phone or on hold with the IRS, I totally get why someone might just pay the fine or worse, stick their head in the sand  and do nothing instead of trying to get through the labryinth that is the Internal Revenue Service.

Since I saved about $600 by calling, it was totally worth my time, but I do work in a place where someone can monitor the phone for me, and I can use the work fax for things like this. How many people don’t have access to a fax or don’t have the ability to call during work hours? I was not about to mail in documentation because not getting  the mail is why this whole process started.

I have one more notice that was a penalty for $42 that I don’t understand, but to get with my accountant and figure it out would cost much more than the fine, so I’m just going to pay it and be done.

Don’t Ignore the IRS

I think lots of people just stick notices in drawers and ignore the whole issue, but correct or not, tax bills never go away. They continue to accrue interest forever until you pay or resolve the issue. The IRS can garnish your wages, clean out your bank accounts, and put liens on your property. Don’t stick your head in the sand regarding IRS fine and fees!

I feel a bit sorry for IRS agents. They are understaffed and hated or misunderstood by most of the country, but their service practices certainly don’t help. If my office sent out bills for things that were already paid and made patients prove they didn’t owe them, we would have been out of business years ago, but what can you do?

Thank goodness all my tax issues are resolved for last year and here’s to hoping it’s better in 2015. You can always hope, right?

What is your best IRS story? Have you ever had to call the IRS?






About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.


  1. Thankfully I have not yet had the pleasure of speaking with the IRS directly. And I hope I never have to.

    • If you can get through the hold time, they are actually pretty nice, but I hope you don’t have to lose the time it takes to get through.

  2. Sorry to hear about the hassle Kim! We’ve never had to deal directly with the IRS like this, but I fear it’ll likely happen at some point. We met with our CPA last week and will be moving to being an S-corp, which brings with it more paperwork – and more opportunity to catch the ire of the IRS. On the bright side, I guess we’ll get to save more for retirement.

    • I think being an S-corp is the best way to shelter more money, but it does seem to bring more tax issues. I’m glad I have a CPA to figure out all the things I don’t understand, but I don’t know how you can help it when they lose a form that was delivered by certified mail. I imagine a giant black hole!

  3. Oh gosh don’t get me started on the IRS. I have a whole post coming up about it, but they adjusted my return to say I only paid 3 quarterly taxes, not 4. I was on the phone for an hour with them and they still can’t find my payment. It’s now on to the “hard trace” division….who knows when I’ll get the rest of my refund.

    • Again, I’ve never heard of them losing payments. They really must be overstaffed. I always thought anything with money attached would make its way through.

  4. I recently had to call the IRS because they lost one of my quarterly tax payments. It took some time as the first person I talked to had no idea what they were talking about!

    • Wow, I’ve never had them lose a payment. That’s pretty sad when they can’t even take money correctly.

  5. I feel fortunate that I have never had to call the IRS. I have always successfully submitted my return with no drama. I think it helps that I am always organized and have all my ducks in a row. I hope to never have to call the IRS!

    • I am super organized too, but there always seems to be something that gets lost in transit or overlooked. I think selling off my practice in two pieces over the past couple of years red flagged us, even though we have been very conservative with our deduction and have paid a ton in taxes. Hopefully we won’t get an audit!

  6. I think most business owners at some point have to either make the dreaded call to the IRS or get audited. It’s definitely not fun, especially all the run-around you get, but like you said, patience and having good documentation help immensely. I do feel for their call center employees because I am sure they are greatly short-staffed and deal with many irate people. They get everyone’s ire and they are the ones who make the tax code and rules. Glad you got one penalty reduced and I can’t blame you for just paying the small one!

    • Most of the representatives I’ve spoken with are very nice, but it’s a thankless job. I’m sure more people probably are yelling and irate than in most other type of customer service. I hope they at least get paid well.

  7. I just got a notice from the state of california with something similar from 2013. Dreading that call since they said I owe around $300. Hoping it’s their error but what a pain!

    • Sadly, I think the state might be worse than the IRS. At least the IRS does pick up the phone eventually. When I’ve had to call the state, they have a message saying there is not enough staff to answer phone calls!

  8. That sounds SO frustrating! My husband is self-employed, and his taxes are far more complicated than mine are. He pays an accountant, and it’s certainly worth it. Do you do your taxes all on your own?

    • No, I have a good CPA, but I guess with the various types of income and deductions we have, it’s open season. I’m not sure any accountant can keep the IRS from losing documents…

  9. I had to make a payment plan with the IRS 6 years ago for a lot of money (long story that involves an IRA distribution from an estate). Back then, they had staff to answer the phone. Now most calls go unanswered based on what I’ve heard*. Everyone was nice when I called, very nice in fact. Of course I also wasn’t a jerk and just wanted to pay my bill and cross it off my list. If you can go see them in person, that’s definitely what I recommend for a more complicated issue.

    *I’ve been on USAJobs looking for other federal jobs, and the IRS is at the point where they can only fill positions internally. They can’t go after debt in Texas unless it’s over a million or something which is great if you are a tax cheat but bad if you just want some customer service.. Yikes “Penny wise and pound foolish”

  10. IRS being a government organisation is tend to delay the work.Patience is what you need the most here.Even being soft spoken to them pays alot.Always remember,look at the brighter side.IRS and only IRS will help you with your retirement fund and you have be patient to get yours ! My dad tried to get things done quickly but things don’t work according to him,so just be there,keep calm and do the correct thing !

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