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I try to add tax blog articles weekly on tax topics that may be interesting to you. Please browse. If there is a topic you would like to see here or would like to more information on, please contact me.
Carefully Designate What is Being Paid . . .
If you owe back taxes and do not specify on your payment which tax and tax year you are paying, the IRS (and State and local agencies) can and often will allocate payment to their benefit. Case in point Melasky. Couple owed taxes for 2009 and earlier years. Couple hand delivered a check to the IRS office for 2009 taxes. Before the check could be processed, the IRS levied (seized payment) on the Melasky’s bank account. The seized payment was applied to the earlier tax years. As a result of the levy, the hand delivered check for the 2009 taxes bounced. The Melansky’s sued the IRS in Tax Court and lost. In short, designate what you are paying when making payments to the IRS. Payments made for the wrong tax year can yield painful results. . . .