Taxation & Estate Planning

Client - "Ummm….I was supposed to get paid at work today and my boss told me that I wasn't getting a paycheck. I don't know why the IRS took my paycheck. But I haven't filed a tax return in a few years. They never even gave me any notice that they were going to take my paycheck. Now how am I going to pay my _____________?"

Me - "Have you moved since you filed your last tax return?"

Client - "Yeah, we moved since then. What's the big deal?"

Me - "You didn't happen to send them a Change of Address did you?"

Client - "Why in the %@#%^& would I want to do that?"

The answer is, of course, that if you don't file a tax return and then you move, the IRS has no idea where you live. Now don't get me wrong. I'm not defending the IRS here but we need to use a little common sense.

Yes, yes they have sophisticated computer systems and databases, and you can bet your bottom dollar they COULD find you if they wanted to. But the law doesn't require them to put much effort into warning you that a levy (garnishment) is imminent. They simply need to send notice to your last KNOWN address. This quite often, is not your current address. So you're cruising along through life thinking that IRS thing hasn't blown up maybe it never will.

Well, I'm here to tell you that these things can pop up when you least expect them. So the moral to this story is twofold. 1. File your returns even if you owe money that you can't pay.

2. File a Change of Address form (Form 8822) whenever you move.