Numbers to call:
- (800) 829-1040 General tax questions
- (800) 829-3676 Ordering forms and publications
- (800) 829-1954 Tax refund hotline
- (877) 777-4778 National Taxpayer Advocate
History:
For years, the IRS offered free assistance to the public over the phone. Traditionally, the lines were very busy, especially towards the April deadline.
Advantages:
You get free “first-hand” information. It’s anonymous: you are not asked for your name or any other personal information, and they do not keep track of the conversation, except for their internal quality control purposes. Depending on how paranoid you are, you still may not want to call from your home telephone, just in case they use Caller ID, and you start calling them names (never a good idea, by the way!)
Warning: The IRS is known to give incomplete, inaccurate, and even plain wrong answers on more than occasional basis. In the official 1040 booklet for 1996, they claimed to have achieved “an accuracy rate of 93% in answering tax law and account questions.” (Of course, the accuracy of this 93% number is also questionable!) Even 7% mistake rate that they admit is still pretty high: 1 out of every 14 questions!
The “wrong advice” policy:
They promise to cancel penalties if they gave you and you relied on an incorrect answer. Aren’t they nice?! They basically say: if we screw up, we won’t punish you for that! Thank you!
Catch #1: You are still responsible for the additional taxes and possibly interest. Only penalties will be cancelled.
Catch #2: You have to prove that you in fact were given an incorrect answer.
Your defense #1:
ALWAYS write down the employee number of the person you spoke to. They must introduce themselves with a 7-digit number when they answer the phone. Politely ask them to repeat the number and record it before you ask your question. Make sure you have all 7 digits (first two identify city they’re in, and the last five – the person). Immediately after you finish the conversation, write down the date and time of your call, your exact question, and their exact answer. Without this record, the IRS will not accept your claim that you received bad advice from them.
Your defense #2:
Call 3 times and ask the same question. You will talk to 3 different persons. If their answers match, relax. If they don’t – beware! You will be better off consulting an independent tax expert. It’s better to get the correct answer before rather than after (trust me!)
Good luck! (You may need it)