Old Guys Rule

When it comes to Social Security, that is.  So saith the Social Security Administration’s (SSA) Inspector General, who recently stumbled across the fact that something like 6.5 million folks, age 112 or older, have active Social Security Numbers!

The audit, released in early March, concluded that SSA lacks the controls necessary to find out about death information from the records of SS Number holders who exceed “maximum reasonable life expectancies.”

Needless to say, therefore, numbers assigned to long ago decedents have been used to open bank accounts, and/or by illegals to apply for work permits.

“It is incredible that the Social Security Administration in 2015 does not have the technical sophistication to ensure that people they know to be deceased are actually noted as dead,” quoth Senator Ron Johnson (R-Wis), Chairman of the Homeland Security and Government Affairs Committee.

Nice – the Inspector General made four recommendations for resolving the discrepancies and improving the accuracy of the Death Master File “to prevent future misuse of these SSNs.

And you had better keep the Revenooers aware of your “last known address” lest they unsuccessfully try to contact you about some dough you owe them.  So says the Seventh Circuit of Appeals, which places that burden upon you, and you alone!

Indeed, the Court has held that IRS did not abuse its discretion when it mailed a deficiency notice to the last known address of a taxpayer after it had been informed by the Postal Service that mail to the taxpayer at that address was undeliverable.  IRS had no duty to seek out address info where the taxpayer filed no tax returns from 2001 through 2007, moved seven times during that period, and never notified IRS of his new addresses.

IRS sent a notice of taxpayer Gyorgy’s 2001 tax deficiency in March 2004 to his address on Octavia Street in San Francisco, the address reflected on his most recently-filed tax return for the year 2000, and the address in the IRS computer system.  Then they sent deficiency notices to the same address for the years 2002 through 2006, notwithstanding the fact that the USPO returned them marked “not deliverable as addressed” and “unable to forward.”  Eventually, IRS gave up and took no further steps to locate the taxpayer or re-issue the notices, and assessed all of the deficient taxes and liened Gyorgy’s property.

Bottom line, concluded the Court, is that IRS has no obligation to send taxpayer notifications to possible new addresses provided by third parties on W-2 or 1099 Forms.  The taxpayer has the sole burden to keep IRS up to date of his whereabouts.

CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters.  You should consult your CPA regarding the implications to your own particular situation.

Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno.  He can be reached at 831-7288, welcomes comments at jquinn@ashleyquinncpas.com, and invites readers to consider his other commentary at http://blog.nolo.com/taxes.

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