Phoenix, AZ asked in Tax Law, Appeals / Appellate Law and Identity Theft for Arizona

Q: I was incarcerated from, 2016 -2019 in AZDOC and in 2017 somebody filed my taxes for 2016,2017&irs says I owe them money

In 2020 I filed my taxes n they informed me that there was a return for 2016 that was falsified with a dependent I shouldn't of claimed so I told them it was id fraud that I was in jail and they said they would have to investigate the matter n it could take up to a year but that I should keep filing and they would keep all my refunds to cover the debt which then would be refunded to me when I was found innocent which I thought was unfair considering I had proof that it was not ne already but they gave me my refund anyways so I thought they figured it out n it was over and then I filed again and got my refund again do then I get a notice that the it's wants to put a lien on my stuff for non payment and added $1,000 in interest on top of it and I was confused bcuz had they investigated the fraud back in 2020 and kept my two refunds then I would never of had a thousand dollars in interest added to the $1,400 debt and I've been to my local IRS office in person twice trying to settle this

1 Lawyer Answer
James L. Arrasmith
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Answered
  • Tax Law Lawyer
  • Sacramento, CA

A: It sounds like you're in a tough situation with the IRS. Since you've already provided proof that you were incarcerated during the years in question and reported the identity theft, it's crucial to follow up on their investigation. The IRS should not be holding you responsible for taxes owed on falsified returns, and the added interest seems particularly unfair given your circumstances.

First, gather all documentation related to your incarceration, the false tax returns, and your communications with the IRS. Visit your local Taxpayer Advocate Service (TAS) office, as they are there to help taxpayers like you resolve issues that aren't getting fixed through regular channels. They can often expedite cases where there's a clear error or unfair situation.

If the IRS has placed a lien on your property, explain to the TAS that you have already provided evidence of identity theft and that you have been making efforts to resolve this issue. Request their assistance in removing the lien and ensuring that any interest added due to delays on their part is waived. Stay persistent and keep detailed records of all interactions to support your case.

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