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Thread: Individual Income Form 5564 DEFICIENCY HELP!!! California

  1. #1

    Default Individual Income Form 5564 DEFICIENCY HELP!!! California

    ok so here is my question regarding my sisters business of selling jewelry online, she is not that savvy when it comes to law and tax since she has to file her self as individual income, well to make this short, her question is as she explained to me, she has received a form from the IRS FORM 5564 titled NOTICE OF DEFICIENCY - WAIVER
    she would like to know what this form is and what she needs to do. I myself do not understand so i am posting here so maybe someone that has the knowledge can point her to the right direction.

    what form is this and how will she need to file for her tax return?
    I hope im making some since as i have been passed this info. I will try to have her sign on and ask the questions but she does not have internet connection.
    Thanks everyone and looking forward to a reply.

    T

  2. #2
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    Quote Originally Posted by smartrefinance View Post
    ok so here is my question regarding my sisters business of selling jewelry online, she is not that savvy when it comes to law and tax since she has to file her self as individual income, well to make this short, her question is as she explained to me, she has received a form from the IRS FORM 5564 titled NOTICE OF DEFICIENCY - WAIVER
    she would like to know what this form is and what she needs to do. I myself do not understand so i am posting here so maybe someone that has the knowledge can point her to the right direction.

    what form is this and how will she need to file for her tax return?
    I hope im making some since as i have been passed this info. I will try to have her sign on and ask the questions but she does not have internet connection.
    Thanks everyone and looking forward to a reply.

    T
    If she got that notice/letter then it means that she has blown off previous correspondence from the IRS for the stated tax year. It also means that its really too late for anyone other than a tax professional to help her.

    She doesn't need to hire a high priced tax attorney or CPA, she just needs to get the help of a professional with experience in dealing with IRS problems. You can't do it for her.

    Either the IRS is right and she owes the tax, in which case her best bet is to set up an installment plan with them, or the IRS is partially right and she owes or does not owe tax based on her actual tax situation.

    Help her find a local tax pro.

  3. #3

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    hmm you know what, i think she did blown off previous correspondence, well she was out of state and returned with unopened late mail, i just asked her actually while reading your reply, by the way thanks for the quick reply.
    Ok here is what she is telling me, on the 5564 form it says:

    Deficiency - Increase in Tax $646 and on the right
    Penalties - one for $120 failure to file and the other for $100 failure to pay, which she says that could be the case, so IRS could be right. What should she do, does she send payment along with this form or does she just sign the form and wait?

    also how would she contact them for installment plan?

    Thanks so much.

  4. #4
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    If she agrees that she owes the tax and penalties, then she signs the form and returns it with payment. If she disagrees, she needs to see a professional to help her with the appeals process.

  5. #5

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    Quote Originally Posted by Marketeer View Post
    If she agrees that she owes the tax and penalties, then she signs the form and returns it with payment. If she disagrees, she needs to see a professional to help her with the appeals process.
    ok i see, that makes sense, now what if she cant pay the entire amount and wants to come up with a payment plan, how does she inform them or ask? does she just write a letter and send it with the 5564 form signed?

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    Quote Originally Posted by smartrefinance View Post
    ok i see, that makes sense, now what if she cant pay the entire amount and wants to come up with a payment plan, how does she inform them or ask? does she just write a letter and send it with the 5564 form signed?
    I don't understand why you won't do the smart thing and send your sister to a tax professional....but if you insist...

    The first thing she needs to do (and IMMEDIATELY) is prepare a tax return for that year to see if her figures agree with the IRS's figures. Its quite possible that with deductions or credits she might be entitled to receive, that she wouldn't owe as much tax.

    Once that has been done, THEN its time to decide how to proceed with the IRS.

    In the alternative, she goes to irs.gov and downloads form 9465 (Request for Installment Agreement) and send it to the IRS along with the signed waiver agreeing that she owes the money. She needs to send at LEAST the monthly payment amount that she is requesting, along with the letter and form 9465.

  7. #7

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    thanks for your help everyone, I have passed on the information on to her along with this thread and i am sure it will help her a great deal,

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