[bluefin88]

A friend told me it is always better to just ignore letters from IRS. I owe taxes from 1099
Income in 2006. I never claimed it, I had no 1099 to send in for it. Now they say I owe
Over $7000 on 18,000 dollars of income. They included a monthly payment form to fill out.
Should I go for the monthly payment or ignore? I have NO income at the present time.
What could they do to me. (no assets either) If someone out there has dealt with IRS,
Please let me know what you experienced. Thanks

[donf]

Never, never ignore the IRS. They will bury you in an instant if they believe your are playing them for stupid.

There is nothing you can do to escape income tax plus penalties if you owe the debt.

However, you can contact them as quickly as possible and disagree with them which causes everything to be reset-so to speak.

Tell them you believe that if they look at the return for the tax year they will see that the 1099 MISC income was included in your total income for the year because you did not know what else to do with it.

Ask them if you need to file an amended return for that year and would they help you to fix your error.

You will be very surprised to find that they are willing to help.

[mike_edwards]

If they think you did not report on purpose, perhaps put you in jail for fraud comes to mind. This is not like other debts since you have a legal obligation to report income.

But if you have a house they can take the house, if you work latter they can garnish most of your paycheck.

So you want to work with them.

[AtlantaTaxExpert]

All the above advice is solid, but you must first get the IRS to send you a copy of the Form 1099-MISC to determine from WHERE this income came.

Once that is established, you can then determine if the income noted on the Form 1099-MISC is valid. It may NOT be valid.

Virtually anyone who has access to your SSN can submit a Form 1099-MISC to the IRS claiming that you earned income from them.

The IRS accepts such Forms 1099-MISC at face value unless you dispute it.

[IntlTax]

If you have no income or assets, you may want to investigate an offer in compromise which may allow you to pay much less than the amount the IRS calculates as due.

[MukatA]

Call IRS or ignore letter?
Do not ignore the letter. Do not miss the dates. Ignoring or missing the dates means that you accept what is stated in the IRS letter.