2. OUR HISTORY
We support children, individuals and families in areas of education, health, housing, finances and community beautification.
KYCC was established in 1975 to support a growing population of
at-risk Korean American youth in Los Angeles.
Today, KYCC is the leading multiservice organization
in Koreatown, serving our diverse community.

3. OUR SERVICES
Quality programs and services that meet the evolving needs of our diverse K-Town community.
KYCC is comprised of 7 different service and program units.

4. COMMUNITY ECONOMIC DEVELOPMENT (CED)
Comprehensive financial support services to help manage finances, increase income, reduce expenses, provide small business technical assistance, and build wealth
Bilingual economic development specialists
Serves over 12,000 individuals and families annually to access benefits, reduce expenses, and build savings and reach personal financial goals.
Our Small Business Program leads free workshops on how to start and grow a business in our community.
COMMUNITY
ECONOMIC
DEVELOPMENT
(CED)
KYCC’s Community Economic Development Unit services guide working families to financial security by helping them build savings and credit, increase income, and reach their financial goals.
The services that we provide include…
Volunteer Income Tax Assistance (VITA): free tax preparation which in 2016, completed 12,000 tax returns, returned $14 million in refunds to our community, and worked with over 200 volunteers.
Tax Time Savings program: for this year, our clients saved about $50,000 in total.
Consumer Advocacy (e.g., Telecom):through which we served about 150 clients this year.
Small Business Assistance helped get loans of $280,000 this year for our clients
Lending Circles: 50 clients borrowed $40,000 in microloans and all of them successfully paid them back.
Financial coaching and education
Finally, The Low Income Taxpayer Clinic has been around since 2015 and since then, we have helped more than 300 taxpayers in consultations and in cases before the IRS. And in 2016, the Clinic decreased the tax liabilities of our clients by almost $140,000.
So if you have any questions about tax or about finances in general, please contact one of the staff in the Community Economic Development Unit!

5. Dealing with an Income Tax Dispute?
Taxes 101

6. You have rights as a taxpayer: The Taxpayer Bill of Rights
The Right to Be Informed
The Right to Quality Service
The Right to Pay No More than the Correct Amount of Tax
The Right to Challenge the IRS’s Position and Be Heard
The Right to Appeal an IRS Decision in an Independent Forum
The Right to Finality
The Right to Privacy
The Right to Confidentiality
The Right to Retain Representation
The Right to a Fair and Just Tax System
The IRS adopted the Taxpayer Bill of Rights in The Taxpayer Bill of Rights did not create new rights but placed all of the rights scattered throughout the tax code in one section.
In 2012, the Taxpayer Advocate Service conducted a survey and only 46% of those surveyed new that they had any kind of rights with the IRS; and further, only 11% knew what the rights were.
All IRS employees are responsible for (1) knowing, (2) observing and (3) protecting these 10 rights in their dealings with American taxpayers.

7. Does the IRS have time limits?
The IRS does not have forever to audit or collect taxes.
IRS has:
Three (3) years to audit, after a return is filed. I.R.C. § 6501.
Ten (10) years to collect tax, after a tax is assessed. I.R.C. § 6502.
These periods are extended where there has been fraud, evasion, or an agreement to extend.
Other things can extend the ten year period, e.g. a Tax Court case or filing an Offer in Compromise.
To find out the expiration of the 10-year period, you can call the IRS and ask for the “Collection Statute Expiration Date” or “CSED.”
Assessment is the date that the tax becomes due. Sometimes this is described as the date that the tax is “recorded on the books.”
If you file a return, this occurs when the return is due.
If you file late, then it occurs when the return is filed.
If you are audited, it occurs once the audit is officially completed, and any opportunities for appeal have closed.
A single tax year can have several different assessment dates for different portions of the tax, e.g. the amount report on a return is assessed when the return is processed, but if an amount is later determined through an audit, that portion that arises through the audit will be assessed when the audit is finalized.

8. What if I get audited?
Send the IRS documents to prove your tax claims:
Make sure documents address the correct year.
Look for official documents—e.g. receipts, school/medical records.
In most cases, the burden is on you to show that the IRS is wrong.
An IRS examination is not a time to cut corners.
If you can, consult with a CPA, attorney, or Low Income Taxpayer Clinic (LITC). They can either provide advice, or take the case for representation.
If the IRS says you owe money, you can appeal the decision to the IRS Appeals Office or file a petition in U.S. Tax Court.
We have provided more information about Low-Income Taxpayer Clinics at the end of the presentation.

9. What if the IRS still disagrees?
The IRS will send you their determination, and then you can appeal to the IRS Office of Appeals.
If you want to appeal, do not sign and return your copy of the examination report.
Either tell them that you disagree, OR
Do nothing, and the IRS will issue a 30-day letter, telling you that you have 30 days to respond.
At this time, you should send a letter requesting an appeal. The letter should include:
Your name and address,
The year at issue, and
Why you disagree with their decision for each claim.  

10. What if I lose my appeal?
If the IRS continues to disagree (or if you do nothing), the IRS will issue a Notice of Deficiency.
This Notice tells you that you have 90 days to file a petition in U.S. Tax Court.
The 90-day period cannot be extended.
The IRS will assign your case to an attorney, and you will communicate with the attorney to settle.
If you cannot settle, you will present your case to the Tax Court judge.

11. Should I petition the Tax Court?
Petition the Tax Court if you believe that you were legally entitled to the claims on your tax return.
Research the tax rules for the claims you made, or consult with a CPA, attorney, or Low Income Taxpayer Clinic (LITC).
Do not file a petition if:
You expect the Court to make an exception to the law, e.g. you were technically married but filed as single.
You cannot prove your claims, but want the Court to forgive the taxes because you cannot afford to pay.
You can choose Small Case or Regular Case Tax Court.
Small case is easier for petitioners without an attorney.
You cannot appeal a decision from Small Case Tax Court.
If you can’t afford to pay the taxes, you will address this later with the IRS’s collection office. You can request a payment plan, or other payment alternative. This is addressed later in the presentation.

12. Are there other options if I disagree?
After an Audit is complete, you can still request Audit Reconsideration.
To do so, file an Amended Return, Form 1040x, or just send information about why the IRS should reconsider your claims.
You must have new information to submit.
You can file an Audit Reconsideration request at any time, but you will not get a refund unless it’s before 3 years from the date the return was filed, or 2 years from when the tax was paid.
You can also sue the IRS for a refund in Federal Court.
Must pay the taxes owed in full before filing a suit.
Again, must file within 3 years from the date the return was filed, or 2 years from the date the tax was paid.

13. What happens if I can’t afford to pay?
Bad News:
The government can file liens, levy bank accounts, and garnish wages without a court judgment.
The IRS can levy all property and income unless it is specifically protected:
E.g. Supplement Security Income (SSI) and other means-tested benefits, like General Relief or SNAP benefits, are protected from levy, but
Pensions and Social Security retirement benefits are not protected.
Liens are reported to credit reporting agencies, which damages credit.

14. You have rights if you can’t pay right away.
Good News:
The IRS generally has 10 years from the date of assessment to collect unpaid tax debts. After that, if it’s uncollected, the debt goes away.
Taxpayers have rights! You can make monthly payments, or offer a lower lump sum to settle a tax debt.
The IRS must consider hardship circumstances.
The State of California cannot levy federal government payments, like Social Security.

15. You have different payment options.
Installment Agreement
Can do this over the phone or online, or by mail.
The IRS charges a fee to set it up, as much as $225.
The IRS will want you to pay the full amount within 72 months.
If you can’t pay within 72 months, you must prove that paying the full amount would create a hardship.
Offer in Compromise
Must file a detailed financial report and financial proof.
The IRS will expect you to liquidate or borrow against all assets (e.g. house or car) to satisfy the debt, except in special cases.
“Currently Not Collectible” status
If you have no assets and low income, the IRS will stop collecting until your circumstances change. Penalties and interests accrue.
Installment Plan
Cost is $225 for a standard agreement, $107 for direct debit from a bank account, and $43 if you qualify as low income.
It is cheaper to set up payment agreement online.
Interest and penalties continue to accrue
IRS might still decide to impose a tax lien.
They can also levy your property if you default.
All tax refunds will be kept by the IRS while you’re in the plan.
The IRS usually can decide whether or not to accept an installment agreement. However, in a specific set of circumstances, they might be required to accept a proposed payment plan. This is true where:
The amount of tax owed is $10,000 or less
You have filed all returns and paid all taxes shown on the return for the past five years, and you’ve never had a prior installment agreement
You’re financially unable to pay the agreement in full when it’s due
The full liability will be paid within 3 years
And you agree to comply with all filing requirements and pay all taxes due while the agreement is in effect

16. What about bankruptcy? Certain taxes can be discharged in bankruptcy.
There are limitations:
Some taxes are not eligible at all, e.g. payroll taxes for an employer.
Three-year rule: The tax must have been due 3 years prior to filing for bankruptcy.
Two-year rule: All relevant tax returns must have been filed 2 years prior to filing for bankruptcy.
240-day rule: Taxes cannot have been assessed in the past 240 days.
Cannot have willfully evaded the tax by fraud.
May not be able to discharge if you filed the returns very late.
While a bankruptcy petition is pending, collections are stopped.

17. What can I do about identity theft?
Signs of Identity Theft:
Someone has already filed a return using your SSN;
The IRS is trying to collect for a year that you didn’t file a return; or
There was income reported to the IRS that you didn’t earn.
What to do:
If the IRS is asking you to verify your identity, follow instructions.
If the IRS is unaware of the ID theft, file Form 14039, Identity Theft Affidavit, along with proof of ID, a police report, and other proof of the crime.
Don’t forget California! To alert the California Franchise Tax Board, file FTB Form 3552 along with all your evidence.
If you fail to inform the Franchise Tax Board, they will likely contact you later about the same unreported income or unpaid taxes that arose out of the ID theft. The IRS does not communicate to the Franchise Tax Board that someone has been a victim of ID theft. That is the taxpayer’s responsibility.

18. How can I avoid tax problems?
Find a good tax preparer!
Check their qualifications and make sure they have a PTIN.
Check their business history through California Tax Education Council (CTEC): or (877)
Make sure you know all fees BEFORE they prepare the return.
Don't use someone who charges a percentage of the refund.
Make sure your preparer offers to e-file.
Make sure the refund will be issued to you. Don’t take a quick loan!
Never sign a blank return.
Keep a copy of the return and proof of all deductions, dependents, and claims for at least three (3) years.
Be careful who files your taxes. If your tax preparer makes a mistake, you may still be held responsible.

19. WHERE CAN I GO FOR HELP?
VITA (Volunteer Income Tax Assistance) for tax filing help. Call (800) to find the nearest site.
If you get a letter from the IRS, contact the KYCC Low Income Taxpayer Clinic at (213)
Contact the IRS’s Taxpayer Advocate Service if you’ve already tried to resolve your problem with the IRS. Call

20. Questions? Need Assistance? KYCC LITC (213) 232-2700