IRS And FTB Representatives Share Tax Tips
Monday, March 21, 2011
What should you know before filing your 2010 tax return? What new tax credits are available for individuals and businesses? Representatives from the IRS and the California Franchise Tax Board discuss the changes that went into effect this year, and answer your tax-related questions.
What should you know before filing your 2010 tax return? What new tax credits are available for individuals and businesses? Representatives from the IRS and the California Franchise Tax Board discuss the changes that went into effect this year, and answer your tax-related questions.
Raphael Tulino, IRS spokesperson for Southern California and Nevada
Daniel Tahara, spokesperson for the California Franchise Tax Board
I'm Maureen Cavanaugh. You're listening to These Days on KPBS. When it comes to taxes, there's usually not a lot of depend news, but we found some this year, for instance, you've got a few more days to file this year, taxes are due on April 18th. And there are a variety of new credits and deductions that kick in this year, plus the IRS is restructuring its lean program, just in case you've been caught in a bind owing the government money, I'd like to introduce my guest, Raphael Tulino is IRS spokes person for Southern California and Nevada, Raphael, welcome back.
Tulino: Hi, Maureen, thanks for having me as always.
MAUREEN CAVANAUGH: Daniel Tahara is spokesperson for the California Franchise tax board. Good morning Daniel.
TAHARA: Good morning. Thank you for having me.
MAUREEN CAVANAUGH: You're very welcome. Now, we are inviting our
listeners to join this conversation. Has your tax status changed in any way since last year? Are you taking a home buyer credit or one of the new education benefits? Give us a call with your questions and your comments. Our number is 1-888-895-5727. Or 1-888-895-KPBS. So let's start out, let me ask you, Raphael, why did the did the IRS decide to move the tax deadline to Monday, April 18th?
Tulino: Because Monday, or I'm sorry, because Friday, April 15th, is a holiday in the District of Columbia, it's called emancipation day. And because of that, and that does date back to 1862, because of that, are the taxpayers in the DC area were given a holiday, an extra day, in other words to, do it. And because of that, the rest of the kitchen gets the same treatment. However, if you think about it, the next day is a sixteenth, which is a Saturday, and then a Sunday, so it moves to the next business day, which is Monday, April 19th, and of course it's an extra weekend as I've been saying, tongue in cheek, to procrastinate to get it done. I kid around, of course we get a lot of volume in April, but for those folks who needs those extra couple days, by all means.
MAUREEN CAVANAUGH: So we have the direct of Columbia to thank for that. That's very nice. What's the most common way that people are filing their taxes now days? I heard some really rather incredible statistics about the number of people who are now doing it on Hine.
Tulino: Yeah, if you're doing it on paper, you're definitely the minority. And as of the statistics, that is, that I saw as March 4th, it's continuing to grow up about 7, 8 percent, you and me at home, then about the same status quo versus last year in terms of the hole, but the bottom line is the left year, about 70 percent of America, or all tax returns in America were e-filed. And about 70 percent of those also chose direct deposit for their refund. So more and more as the years go back, we're just doing paperless tax returns. And it's like night and day in terms of how easy it is, to get to a computer, let the software hold your hand all the way through. Of course if you're one of the 60 percent or so who outsource, so to speak, who go to a tax preparer, CPA, tax attorney, enrolled agent, that kind of thing, chances are they're e-filling on your behalf. So no matter who's doing or how it's getting done, the transmission is being done electronically because the transition and ease is just great.
MAUREEN CAVANAUGH: And Daniel Tahara, the franchise tax board, if you were looking for a tax booklet in your mail this season, you didn't find one. What motivated that change?
TAHARA: Well, that's correct. That's mainly due to like Raphael was mentions, the popularity of e-filing. Last year more than eleven million people e-filed their tax returns, which accounted for 75 percent of all returns. So Californians love their e-filling so we decided to not mass mail our booklet. But far people who are still looking for them, we're letting them know that they can get them from our website, STB.ca.gov, or they can actually pick them up from their local post office and libraries as well.
MAUREEN CAVANAUGH: And Raphael.
Tulino: Yeah, IRS, same thing. This is the first year we began the year with or in the last year saying we're not gonna mail them anymore. Why? Because it costs obviously. But also the popularity as e-file, as we evolve, we're evolving away from paper.
MAUREEN CAVANAUGH: Kind of an experiment though, I mean it's like tradition to go to your mailbox.
Tulino: Yeah, it's true. And I've been asked many times, where do I go? You go on load and down load them of course, is the easiest spot. But then you can also call the IRS, at 1800 tax formal, and have them send to you it. [CHECK] but not to be redundant but as we move away and get electronic on just about everything, paper is becoming a thing of the past in term it is of filing, files as such.
MAUREEN CAVANAUGH: I'm speaking with Raphael Tulino, and Daniel Tahara. And we are taking taxes, we're taking your calls at 1-888-895-5727. Let's start with Claudia call you go from Fallbrook. Good morning, Claudia, and welcome to These Days.
NEW SPEAKER: Good morning, thank you for taking my call.
MAUREEN CAVANAUGH: You're welcome.
NEW SPEAKER: My question is related to the claim of dependency. This is the first year that I will be filing divorce, we have three children, and my former husband claims that this is the year that I get to claim two out of the three children, and he's asking me if he can sell -- if I can sell my claims. She's offering $400 for one additional, and nine helped for two additional. Is this a good idea or not?
Tulino: Well, I would just say this in term was that, that's an interesting, I've never heard such a thing to be quite honest. But as a dependent exemption, you get one per return if your husband or ex-husband claims a child on the return. You cannot claim. If you both do, then the IRS will get that return from you and him and make a determination as to who might get that exemption claim. But the bottom line is, you only get one per taxpayer now matter how you slice it. Part that you're si, I've never heard before, I would just say that you get one per, and that's it. So that would be how that generally works. If you need anymore or want anymore information, I would refer you to requires publication 501 at IRS.gov, and that gives you all the rules and explanations about dependency exemptions.
MAUREEN CAVANAUGH: You want to comment on that at all, Daniel? .
TAHARA: You know what? I actually agree what Raphael was saying, and also for the stateside as well, if you're considering, it sounded like she wants to know whether or not she should claim the dependents or her ex-husband should claim them. For California purposes, the dependant exemption credit would $99 for each dependent. So she would have to waive the option to see -- if it's more beneficial to take the money that her husband is offering or if she'd rather claim the children on her tax return.
Tulino: Right, and it's a civil decision between this particular lady and how that works but just on the federal tax return, you get one per, and that's it, one exemption per human being.
MAUREEN CAVANAUGH: Gotcha, hope that helps Claudia. Let's move to Ali, or maybe alley, in San Diego. Good morning, Ali, welcome to These Days.
NEW SPEAKER: Good morning, thank you very much. I just had a question in regard to my forge. I've owned this condo for four years, and every year I claim it obviously, on my tax, and it helps me a lot. But it's actually my sister on the paper, it's just me, I'm the only owner, but she had put the down payment, and she helps a lot with the mortgage as well so much this past year, she did most of the thing. We go back and forth helping each other that way, but as far as like on the paper, I am the owner. So I've been claiming. This year because she's in a little bit higher bracket, she was knowing she wants to claim upon that condo on this year herself. Will there be any problem in that? Will I get in any trouble in anything like that?
Tulino: We're talking about the mortgage interest from the home and the1098 you get from that information, and property tax? That generally is supposed to be done or paid for by the person who is paying for it, and who is on the title. Just because you say your sister is it helping you, doesn't necessarily mean she's gonna be able to put that on her tax return. So I would be careful and do it yourself, and just air on the side of caution there. Because if she attempts to do si -- you're the one who gets the 1098 correct?
MAUREEN CAVANAUGH: Alley, are you the one who actually gets the 1098 form your bank from your lender?
NEW SPEAKER: Yes, everything's in my name.
Tulino: Yes, then you're the one who should put that on your tax return.
THE COURT: Thank you for the call, we are taking your calls about taxes, the number is 1-888-895-5727. Raphael, what's the average refund amount individuals are receiving this year.
Tulino: As of two weeks ago, it was up over $3,000. And it's a good point that you bring up, because there's something I always mention on the side, as you do your return this year, and consider as those stats came out, it's about 85 percent of refund or returns as for the first chunk of the filing season, are refund returns, and with the average refund being up over $3,00, not a bad idea to consider some tax planning in 2011 to bring the tax you pay closer to what you owe. You don't have to have that size of a refund being given back to you once a year every year from the government holding it for you without interest, so you might consider doing some tax planning for 2011, consider your situation, that way you have your money in your pocket throughout the whole year, as opposed to getting a refund. Not that getting a refund is a bad thing, everybody likes to do that, but you might consider taking a look at thing as you consider 2011 as well.
MAUREEN CAVANAUGH: So you can spread it out a little bit more over the whole year.
DEFENDANT: Yeah, well, it could be an extra 250 a month in your pocket, as opposed to getting it in one big chunk. Last year, I'll just throw a number at you, the government treasure refunded about 340 billion with a B back to tax payers, so a lot of folks have money coming back to them, and that's okay. Just a thought for those listening who might want to consider some planning.
MAUREEN CAVANAUGH: And there are terror a number of unclaimed refunds that the IRS is holding too.
Tulino: Unclaimed, we go back every year and this is a story, and this is for 2007, basically what we're saying is you did not file a tax return for 2007, we've got some money for you, but you've got to file a return in order to claim a refund that could be coming your way based on your situation for 2007. If you don't do so, then as of April 18th 2011 coming up next month, you forfeit to the treasury by law because three years have gone past. So if you haven't filed in previous years, perhaps you didn't meet the filing requirement by law you had a part time job, and other things that happened in your life, then you might consider filing, you might have a refund coming back. In California it's about 129 million that are owed to thousands of taxpayers, of that one billion, nationally, that's sitting there, waiting for folks to file and claim for the tax of 2007.
MAUREEN CAVANAUGH: And Daniel Tahara, I think perhaps it is I common thing that one might get a return from the federal government but actually owe a few bucks to California. How does that work?
TAHARA: Oh, well, it depends on the circumstances, for myself most of the time, I actually get a refund from the federal government, and then also I actually owe fer state purposes. And for those reasons, it could just be defenses between what's taxable by California, and what's taxable by federal. A lot of times I'll have income that's not taxable for federal purposes of but is taxable for California purposes. Or there wasn't enough withholding so I'll end up owing a little bit of money.
MAUREEN CAVANAUGH: Right. What's the average refund here in California?
TAHARA: The average refund last year was just under a thousand dollars.
MAUREEN CAVANAUGH: Uh-huh. That's not bad. And is California also -- do you also have a backlog of refunds for people who basically evaporate filed?
TAHARA: Not actually those who haven't filed but also those who filed their returns, and from the time they filed a return, and from the time their refund was issued to them of course they actually changed addresses. So we're actually holding $15 million in refunds that we can't get to people so much we're asking people if they didn't get their refund last yore or they dope don't remember, to give us a call, [CHECK]
Tulino: And that's the same for the government. We cannot every year on November run the same thing. These are [CHECK] returns that have been filed that we have a bad address. And what usually happens is, in the following year, the taxpayer with that address files, and the computer notes that correct address and kicks out the refund then. But I similar situation, I suppose the bottom line is, believe it or not, it's your money as a taxpayer, and you should get your refund. You should pay no more and pay no less, so those processes are in place for now do so.
MAUREEN CAVANAUGH: We're taking your tax questions and comments at 1-888-895-5727. We've got a full basic of calls 678 let's go to Paul in San Diego. Good morning, Paul, and welcome to These Days.
NEW SPEAKER: Good morning, I'm calling, actually, with a question for the franchise tax board representative. My wife and I purchased a home last year after the expiration of the federal tax credit, and had applied for the first time home buyer California credit, which the paperwork was filed by the escrow company, we still haven't heard back about whether or not we actually received it, and just wondering if we could expect can to hear back before filling this year, and if not, how that affects us, do we carry it forward to the next year.
TAHARA: Okay. No problem. Actually what we're doing right now is our area that's handling all those applications right now, they are a lot bit backlogged. We received over 20000 duplicate applications. So they did let us know, they're hoping to get through all those politics and get them processed by the end of this month, and then they'll start send think out notification to everyone who applies. I can actually give you a phone number right now, where you can actually give them a call, and they may be able to give you a status update. But if you have a opinion, the number to call would be 8887924900, and press option one. It is important to note, you will want to wait to receive that notification letter from us, because if you claim the credit without receiving the authorization from us, it'll -- it will deny that credit for you. You'll have to wait for the approval.
MAUREEN CAVANAUGH: Okay. Thank you for that. And Andy as a similar question calling from Chula Vista. Good morning, Andy, welcome to These Days.
NEW SPEAKER: Hi, thank you. My question is very similar. I bought a house last year as well, ever the federal tax credit for the state credit. And I actually received a phone call back because I owe some state taxes from the franchise tax board, and they told me that where the credit's gonna be applied, they'll apply the credit after you pay the taxes that are outstanding. And I was a little confused by that, because I would have assumed that the credits would be applied then, anything outstanding would be taken into account because the credit's gonna be larger than what I owe the state. And I didn't know how that was gonna work.
TAHARA: You're actually -- I have not heard that benefit. What I could do, is actually -- I'm interested, could be I get your number off the air? And what I'll do is I'll personally check into that for you, and I'll give you a call back, because I've never heard of that. And I'll work with you, and get you an answer to help you out U.
MAUREEN CAVANAUGH: Andy, stay on the line, and one of our producers will [CHECK] I'd like you, if you would, Raphael, to give us a little -- some pack ground on this home buyer credit. It expired last year, but I know that there are so many people who wanted to take part in that. How does that work?
Tulino: Oh, boy, we had three iterations on the home buyer credit, on the federal side. [CHECK] had a long time resident credit, and as we sort through them, we're certainly weeding through all the paper. Because we require taxpayers who are gonna get up to $8,000, to submit documentation. Therefore filing a paper return. So those credits worked accordingly. And there so many nuanced situations and scenarios and Q and As that I've heard of, that I've been part of, in terms of posting to the IRS website, I would just refer anybody who's thinking about it, or wants to know about it, go to IRS.gov, and search first time home buyer credit, questions that come up [CHECK] but the bottom line is this, there was the first time home buyer credit in 2008, and that has to begin to be repaid in 2010, because that was up to $7,500, and you're paying that back in installments of $500 for 15 years, so essentially it worked as an interest free loan, so that repayment begins this year for those tax payers who took that credit, the recovery act in February brought the $8,000 credit, you must repay that, if you live in your home for less than three clears as your maybe home. So you need to be in your home for three solid years as your principle residence in order to not pay that $3,000. And then the [CHECK] November of 2009, and that was up to $6,500, and what's a long time residence? Is somebody who's lived in their main home for five consecutive years of the last 8, if they moved and bought a house in these parameters, I believe it was november through april of 2010, they could qualify for that credit. So I don't want to go on, because there's so much there, but you get the idea that we have had three different iterations of it, and there's a lot of parts of it that are working for a lot of tax papers who took any within of these three credits.
CAVANAUGH: Now, you mentioned the software that a lot of people are using, right? Can you use software to help you true these, or do you need something more.
Tulino: For purposes of the first time home buyer credit, you can use software to work you through it. But we're requiring you to mail it. We want the documentation, the paperwork, the HUD One statements, for example, that proves that you bought the home, because if we're gonna give $8,000 to taxpayers times X million we want to make sure we're giving legitimate tax refunds, to tax payers who are legitimate first time home buyers, and that way we give only those who are supposed to get them. So we're requiring the paper. And real quick, the first time home bare are credit, what's a first time home buyer? For that law, it was basically somebody who has not owned a main home thee years prior to the purchase of the home they bought, that qualifies for that credit.
MAUREEN CAVANAUGH: My guests are Raphael Tulino, he's from the IRS, Daniel Tahara is from the California tax franchise tax boards. Thank you for that. And we're taking your calls at 1-888-895-5727.
Tulino: I was gonna say when I came in, I was listening to you talk to the lady about military issues.
MAUREEN CAVANAUGH: Yes.
DEFENDANT: For those who are certain members of government and military member, they have for the first time home 53er credit, through April of this year, they were given an extra year to qualify for that credit. And good point to mention here in San Diego, in terms of our military population. If you are considering as such, [CHECK] April 30th, 2011. Either buy the home or enter into a binding contract to buy the home in order to close later on, I believe two months after that. But military member fist you're still out there, and listening first time, you still that extra year just to throw it out there.
MAUREEN CAVANAUGH: Very good point.
MAUREEN CAVANAUGH: It's time for us to take a break. We're gonna take a short break. We have a lot of people on the line, we're gonna take your phone calls, right after this. You're listening to These Days on KPBS.
CAVANAUGH: I'm CAVANAUGH, you're listening to these days on KPBS. We're taking you tax question at 1-888-895-5727. My guests are Tulino from the IRS. Daniel Tahara is spokesperson for the California franchise tax board. Let's go to Stephanie right off from San Diego. Good morning Stephanie, welcome to These Days.
NEW SPEAKER: Thanks very much, my question is my father wasn't doing very well last year, so he came into my home, and I looked after him, and paid all the expenses. Is there a way that I can recoup some of the expenses or make a claim for him?
MAUREEN CAVANAUGH: As a dependent?
NEW SPEAKER: That's what I was wondering. I know you can for a child. But can you for a parent.
Tulino: Yes, you may under the qualifying relative rule, and I would refer you to the other lady I mentioned, I believe, public 501, Stephanie, if you can get to the IRS website, down load publication 501, and maybe spend 5 or 10 minutes reading about the qualifying relative, if you satisfy the four tests there, and it sounds like you might, [CHECK] that might be able to put on your tax return for your cad.
MAUREEN CAVANAUGH: Does that carry over to a dependent for state tax purposes Daniel?
TAHARA: Yes, I was actually gonna agree with Raphael, and if she has any other questions, she can actually go on our website, [CHECK] carry over as well.
MAUREEN CAVANAUGH: Terrific. Thank you both. And another caller, now Cliff in San Diego. Good morning, Cliff, welcome to These Days.
NEW SPEAKER: Thank you. In 2009, I closed my sole proprietorship, and sublet my leased offices. I sustained a loss on that sublease in 2010. Can I claim that without filing a schedule C, that is as an ordinary loss?
Tulino: Cliff, I do not know right off the top. That kind of a question, I might think you might want to refer to a CPA. But in lieu of doing research, which is not easy to do on live radio, I can't really think right off the top, if that's something you can do. I know -- I'm tempted to say may be. It sounds like you can. But I would have to know more and I'm not gonna postulate here. I'm sorry I wish I could 28 you more. If you go to the IRS website, I believe -- let's see. The instructions for schedule C, and then publication 927 I'm thinking is [the|ed] -- I wish. I'm drawing a blank. Cliff, I'm sorry. Yeah, you got it.
MAUREEN CAVANAUGH: Okay. Wow, these things are complicated.
Tulino: It is. And it requires some thought. And I -- obviously we can't do this on live radio.
MAUREEN CAVANAUGH: I understand. Got it.
Tulino: I'm sorry, cliff.
MAUREEN CAVANAUGH: Andy is calling from San Diego. We're taking your calls by the way at 1-888-895-5727. Andy's calling from San Diego. Good morning, Andy, and welcome to These Days.
NEW SPEAKER: Good morning, thank you for taking my call.
MAUREEN CAVANAUGH: Yeah.
NEW SPEAKER: I have a question about the opportunity tax credit. I'm a veteran and I'm receiving the 2011 GI bill which covers some of the tuition and also gives me a housing allowance. Now if the tuition, you know I'm paying out of pocket, but the housing allowance, does that count toward as an income where I have to owe money in order to get that credit or because that's counted separately, can you explain that?
Tulino: The American opportunity tax credit is what you're talking about issue the $2,500 that came in the recovery act of 2009. Off the top, Andy, I'm not so sure I know all the nuance of whether that's part of it, like the gentleman before, I'd have to research that off the want to, but that credit is available for you for the first four years of postsecondary education, it's up to $2,500, 40 percent of it is refundable, so even if you owe no tax, you get [CHECK] once it's within reduced to 0, then you request get up to 40 percent back to you in the form of a refund. But once again, I'd have to sit and take a look at that, right off the Tom, I don't have an answer for you, I apologize.
MAUREEN CAVANAUGH: Raphael, there are a lot of education related benefits that are available to taxpayers this year. There is, as we're mentioning here, the American opportunity credit. What are some of the others.
Tulino: Tuition and fees came back in the December 17th law that was enacted last year, about four months ago. And that was retroactive for all of 2010, and 2011, and that's above the lineup, so to speak. You don't have to itemize in order to get it, up to $4,000 in expenses for higher education pay forward you by yourself or for a dependent. There is the student loan deduction, you can take, there's a lifetime learning credit, Americomp credit as I mentioned was basically the old hope credit put on steroids, so to speak, expanded and increase, and available for more people to get it. There's the teacher deduction. Let me mention that because that was important. That was also brought back retroactive for 2010 and 2011. That's for teachers, full time educators, who spend money out of their own pocket, up to $250, you can deduct those supplies that you pay for your tax room, up to $250. That's also on the front side of the return, so you don't have to itemize to get it. So IRS publication 970, tax benefits for education, IRS 970 details everything, and there's a whole lot. There's even mirror. There's an employer reimbursement, how that's worked when your employer pays to you go to school. So there's a whole slew of information in that publication.
MAUREEN CAVANAUGH: Daniel, I wonder, I know that the state tax follows Federal taxes pretty -- as much as they can, when it comes to these deductions and so forth, is there anything specific though in California's taxes this year that perhaps people might overlook or not realize that they might look into it when it comes to deductions or requesting or tax credits?
TAHARA: Well, the one thing for California residents, and this is actually I know a big issue for federal purposes as well, is the earned income tax credit. I know California has really been make concerted effort to make sure that we let everybody know, although it's a federal credit, a lot of people in California qualify for it, and they're not taking it. And it's a big deal, because it can help out individuals that make lower income with a credit up to so we want to let people know that even though it's a federal credit, maybe sure that you take it, because it can help you out.
MAUREEN CAVANAUGH: Yeah, that sounds -- why do people not realize that.
Tulino: The ITC is something we administer every year, [CHECK] 20 to 25 percent of taxpayers who are eligible for earned income credit don't claim it, for reasons they think it's just too complicated, they don't know about it, [CHECK] give you a number, last year in San Diego County it was up over four hundred and 50 million in this credit that was claimed just by San Diego County taxpayers. About five billion in California, and about 50 some billion nationally. And this [CHECK] for working, very having earned income. It maxes out at 48263 of a family of three or more children. You and get a piece of that, up to five 666, as Daniel mentioned, then you can get it for think is, you can get it for a family with one child, or a family with two child, [CHECK] can bottom line is, that is also a refundable credit, once your taxes have been reduced to 0, the rest is given to you in the form of a refund, and sometimes that refund anybody quite significant. So EITC is often overlooked. [CHECK] something called the savers' credit, I believe it [CHECK] for air joint return, and you're saving toward your retirement via an IRA or a pension plan such as a 401K, 403 B, you can get a piece known as the savers credit, that will help you save -- off set the cost, [CHECK] couple of things out there, and of course one other thing is, don't miss out on anything.
MAUREEN CAVANAUGH: Right.
Tulino: Don't miss out on the credit reduction that you owed to either lower your bill. Or get a bigger refund.
MAUREEN CAVANAUGH: Get a bigger refund.
Tulino: Yeah, sure.
THE COURT: 1-888-895-5727 is the number to call. We're taking your tax questions. Richard is calling from assistant district attorney. Good morning, Richard, and welcome to These Days.
NEW SPEAKER: Good morning, thanks for taking my call. What my situation is, is I just got out of the Navy in July, I reenlisted and got a bonus for it, but I only served two years out of the four years that I was supposed to serve. So I had to pay back two years of that, but I already paid taxes on those two years that I paid. Is this a way for me to [CHECK].
Tulino: Combat zone pay is generally nontaxable.
NEW SPEAKER: No, it was not in ray combat zone, I actually paid [CHECK].
Tulino: Tax automobile. The only nontaxable income I know in the mill stare side right off the top is if you are in a listed combat Zen, and those combat zones are detailed in IRS publication three, the [CHECK] here on the radio.
MAUREEN CAVANAUGH: Okay, Richard.
NEW SPEAKER: Okay, thank you very much.
THE COURT: Thank you. Helen calling from Oceanside. Good morning, Helen, welcome to These Days.
NEW SPEAKER: Hello, thank you for taking my call. I am a native of New York City, and I have a problem in that I've lived in the UK for the last 17 years till 2009. And I'm having trouble finding information as to someone who's lived out of the country on my husband's pension, and we kept our finances separate. I always serve -- I paid my taxes giving all of the tax money over here that was necessary, and my husband took care of the UK taxes. And we never intermingled. I'd like to know if there's any -- I get a pension from England now on his death, and I'm wondering if I pay income tax on my pension that I get over there.
MAUREEN CAVANAUGH: Right, Helen, let's get a response to this.
Tulino: It sounds like two things. One, we have tax treaties around the world can countries around the world. So if you pay tax somewhere, you might get eye United States credit. If you're taking taxes in the UK. That said, I would definitely recommend that you consult a tax professional based on that question to get the information that you need and the service you should get. It's pretty technical, when you're talking about foreign tax law, and pensions and such, as she's saying. Credit you pay in the UK, you can get a credit on your US tax return here, because I'm almost sure we've got a treaty with the United Kingdom. Depending on the country, of course. But you get the idea.
MAUREEN CAVANAUGH: Could Helen walk into an IRS office or get somebody on the phone, considering that the April 18th, date is looming quickly, could she do that or would it be better to go to a professional?
Tulino: Based on the complexity of her question, I definitely recommend probably seeing a certified public accountant. I didn't quite get her question, but it just sounded like base on the complexity, yeah. The other things is, based on the extension, and this is worth mentioning for everybody else. If you cannot file your taxes by April 18th, that's okay. You could take an extension, it gives you six months through October 17th. How do you do that? It's easy. There's a little quarter page form, you fill it out, mail it, and you can do it electronically, request it, the key about the extension to file is exactly that. It's to file and not necessarily to pay. So if you owe or you think you owe, you want to have a payment in by April 18th, good faith estimate, 90 percent, using last year as a guide, not a bad idea, just send something in, that way you avoid penalties and interest accruing on your account, if you miss the April 18th deadline to pay because there's no extension for that. After that, then take the 60 months if you need it, that way you have time to get your stuff together and take advantage of all you can. Legally of course.
MAUREEN CAVANAUGH: Yes, legally. Daniel, a lot of people have been through very hard times in the last couple of years. I'm wondering on the California side of this tax question, is the state offering any kind of assistance or credits to people who lost their jobs in the last year?
TAHARA: Well, we do understand that times definitely are tough, and we want to let people know that if they're dealing with tax debt from previous years or they're getting done with taxes this year, and they realize they owe money and they just can't pay it, we want to let people know, give us a call, we can work out with payment arrangements with them in some instances. We can delay collection actions and offer temporary tax relief as well, so we want to let people know that there is something available, we can help you by looking at your account and you know what options are available and help reduce some of that stress.
Tulino: Same with the IRS. Same posture. We realize, we're continuing, we began it in 2009, a lot of struggling tax payers out there, who can't pay for the first time, for example. They owe and they realize, gee, I can't take care of this. Be proactive, let the IRS know. We definitely want to help, not be a hinder, and we understand and realize that a lot of taxpayers are in that situation. But we need to know from the taxpayer, in order to be flexible and take care of things.
MAUREEN CAVANAUGH: And it's my understanding that the IRS has even revised the way it imposes liens.
Tulino: Fundamental changes in the lien process, including doubling the threshold, help for small business and such. We announced this last month, and we want to make sure that we can still administer tax at the same time without hurting that without helping the tax payer continue to do their business, for example, so the lien, it's slapped on their account doesn't prevent them from doing as such. So fundamental changes there. The IRS website has that information, if you go to IRS.gov, and click on the news room, the news release there from last month that you can see all the different stipulations and things we've done to make the lien process change so it's beneficial to the tax payer as well as the IRS.
MAUREEN CAVANAUGH: I have one last, really quick question for both of you.
Tulino: Yeah, sure.
MAUREEN CAVANAUGH: There's a woman on the line who says she gets an error message on turbo tax because she's in a same sex marriage. Will a same sex marriage be something that will be considered by the IRS?
Tulino: Yes, we have made changes. Real quick, the main change in that is if you're a registered domestic partner in the state of California, Nevada, Washington, you must split your income, and it might not be a bad idea to either hire a tax professional to do a tax return or take the extension and consider the time down the road, if you need to file a same sex tax return. I know Daniel can mention the state issue, but on the federal issue, that's the main point. You can find that information in pub 555.
MAUREEN CAVANAUGH: Daniel, yes or no?
TAHARA: There is actually a difference for -- like Raphael mentioned, for federal purposes. But for state importances we actually do recognize registered domestic partners, same sex marriage.
MAUREEN CAVANAUGH: We have to end it there. Daniel, thank you so much, if you two gentlemen are nice enough, I think we'll have you back 'cause there are a lot of people left on the line. Thank you so much, Raphael and Daniel, thank you.
Tulino: Any time.
MAUREEN CAVANAUGH: KPBS.org is the place to go if you have comments you've been listening to These Days on KPBS.