Frequently Asked Questions
Common Tax Issues
Employee Status vs. Independent Contractor
Negotiations and/or Settlements of Tax Debts
IRS Appeals/Collections Issues
Independent Contractor vs. Employee Status
Who is an independent contractor?
Employers sometimes treat individuals who work for them as independent contractors.
What is the difference between an independent contractor and an employee?
If an individual classifies as an independent contractor, the employer doesn't take social security and other payroll taxes out of the individuals paycheck, and the employee has to pay that on their own. For all employees with "employee" status, the employer takes the taxes and social security directly out of their paycheck and sends it to the government. To increase taxpayer compliance, the IRS wants as many people as possible to be treated as employees. There are guidelines to determine how employers should classify their workers.
I am an undocumented worker. What can I do?
BLITC can help an individual apply for a taxpayer Identification Number. This is not a Social Security Number. However, a Taxpayer ID number does allow an individual to pay required taxes and to receive tax refunds.
I am an employee and have never filed a tax return and want to now. What do I do?
The employer may intimidate his or her employees and encourage them not to report their taxes, thus avoiding paying payroll taxes that he or she is liable for. If an employee hasn't been filing tax returns each year, they may be afraid to begin, for fear of owing a lot of money, or other punishment by the IRS.
What assistance can BLITC offer on this subject, and what benefits will this assistance bring to the employee?
The BLITC can:
- help employers to determine the proper classification for the people who work for them, so they know how they should be treating the people who work for them as employees or independent contractors
- refer employers to companies that handle payroll and taking taxes and social security out of paychecks, etc.
- help the taxpayer to begin filing past tax returns and to begin filing on a timely basis, if he or he has not been filing tax returns
- help the taxpayer negotiate with the IRS to minimize prior years tax liability, and
- help to set up structured settlement payments so they are not devastated by tax payments.
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What is the Earned Income Tax Credit (EITC)?
The Earned Income Tax Credit is a tax refund benefit for working people. This is money that some low-income taxpayers are eligible to receive regardless of whether they have a tax liability.
How do I know if I am eligible for Earned Income Tax Credit? If I am eligible, how do I get it?
BLITC can tell you whether you are eligible for the Earned Income Tax Credit. We can also help you file for EITC and help you get the money you deserve.
I didn't file a tax return, am I still eligible for EITC? How can I get my EITC?
If not too much time has gone by since the tax return was due, you can file a return now and still be eligible for EITC.
I filed my tax return wrong and I have to pay the IRS. What do I do?
BLITC will help you correct and prepare an amended tax return. We can assist you in applying to pay your taxes, due on an installment plan that works for your circumstances.
Negotiations and/or Settlements of Tax Debts
What is a tax debt?
When a taxpayer owes a debt to the IRS due to an audit or unpaid back taxes.
What assistance can BLITC offer on this subject and what benefits will this assistance bring me?
The BLITC can help you to:
- gather the necessary documents and records regarding how much you are able to pay, etc
- seek a possible reduction in the amount owed by you to the IRS
- negotiate a payment plan that will meet your ability to pay
An important note: a taxpayer with a lot of tax debt can't just declare bankruptcy — bankruptcy does not dissolve tax debts)
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IRS Examinations or Audits
What is an exam or an audit?
This is when the IRS requests a review of a taxpayers returns.
There are several different kinds of exams or audits:
- Some are done by mail
- Some are done in person at an IRS office, and
- Some involve an IRS employee actually visiting the taxpayer's house
The process is as follows:
- The taxpayer will receive a letter from the IRS that they are going to be audited.
- The IRS will generally inform the taxpayer which records they wish to audit.
- The audit will examine records of the taxpayer to determine if the correct amount of taxes has been paid.
(Note: it is possible to get a refund as a result of an audit)
What should I have ready for the auditor, if I get a notice of an exam or an audit?
The IRS will generally inform the taxpayer which records they wish to audit.
I ignored my audit, what can happen now?
If you ignore the notice of an exam or audit, out of fear that you are going to have to pay more money than you can afford these are some of the things that can happen:
- you can lose some of your rights
- your situation can become more serious
- you may not have the required records needed
- you may later improperly report your income or deductions
What assistance can BLITC offer on this subject?
The BLITC can help the taxpayer to understand the audit process, and to resolve any issues that arise. The BLITC can attend the audit with the taxpayer.
With proper and professional advice, the taxpayer will not pay more taxes than they should and they may be able to pay LESS than the IRS initially asks for.
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IRS Appeals
What is an appeal?
If a taxpayer has gone through an audit with the IRS, and the taxpayer disagrees with the findings, they may file an appeal.
Will I have to pay more in order to appeal the audit to the IRS?
No, you may fear that you will end up paying MORE to the IRS, or will be punished in some other way, but this is not always the case. The representation provided to you by BLITC will be free of charge.
I don't agree with my auditor? Can I appeal the audit?
Yes. The BLITC can help you to determine if there are grounds for appeals, and can help you with the process absolutely free.
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Collections
What is a collection?
When a taxpayer has gone through an audit, and the IRS has begun to seize bank accounts, property, etc. in order to collect the money owed.
What help can I get from the BLITC offer on this subject and what benefits will this assistance bring to me?
- Stop the process while a proper review of the file can be made.
- Help you to cooperate with the IRS, rather than fight the IRS.
- Negotiate payment arrangement rather than the seizure of your assets.
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Innocent Spouse Relief
What is innocent spouse relief?
You may be eligible for innocent spouse relief if your spouse has incurred a tax liability separate from you. The BLITC Taxpayer Representatives can help you make this determination.
What assistance can BLITC offer on this subject, and what benefits will this assistance bring to me?
A divorced person may be able to receive special consideration (Innocent Spouse Relief), and can be excused from tax liability if it can be shown that they are not responsible for the error or fraud on the jointly filed tax return. The BLITC can help you to file the correct forms, and to negotiate this process.
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Obtaining a Taxpayer ID or Social Security Number
What is a taxpayer ID? How can I get one?
A taxpayer identification number allows you to file your tax return in the United States even if you do not have a social security number.
The BLITC taxpayer representative can assist you in filing for a taxpayer identification number.
I want to pay my taxes but do not have a social security number? What can I do?
You may fear detection by Immigration and Naturalization Services (INS), or fear that you will owe more money than you can afford to give to the IRS, especially if you are an independent contractor. The BLITC can advise you on how to obtain a taxpayer's ID, and help you with the paperwork.
Filing taxes does not trigger detection by the INS. You can begin to have a record of taxpaying, which you will need when/if you apply to become a U.S. citizen, or apply for Temporary Protective Status. You can also receive tax refunds, etc.
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Back to Our ServicesClient Complaint Procedure
1. Any client or applicant for service has a right to complain about the manner or quality of service or about the program’s failure or refusal to provide the service. A sign explaining how to make a complaint will be posted on the door to the program (Morison 117).
2. A complaint may be either oral or written. An initial complaint shall be made to the Clinic Director, who will consider the complaint promptly and attempt to resolve it. If the complaint is not resolved to the satisfaction of the complainant, the Clinic Director will provide to the complainant a copy of this policy, in English and Spanish translation.
3. If the complaint is not resolved by the Clinic Director, a complaint may be made orally or in writing to the Executive Director, who will consider it promptly and attempt to resolve it.
4. If the complaint is not resolved by the Executive Director, a complaint may be made to the Chairperson. The complainant shall have an opportunity to submit an oral and written statement to the Chairperson, and may be accompanied by another person. Upon request, the Executive Director will arrange for a staff member to transcribe a brief written statement, dictated by the complainant, for inclusion in the complaint file.
5. After the Clinic Director, Executive Director and Chairperson have attempted to solve a complaint, and a satisfactory resolution has not been the conclusion, the complainant will be referred to another LITC. A record showing the complaint process will be kept on file.
6. A file containing every complaint and a statement of it disposition shall be kept by the Clinic Director and made available for examination. The file shall include any written statement submitted by the complainant, as well as a documented record of the process.
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