Refund Delays – IRS Letter 5447C

Apr 17, 2018

From Dust to Transfer

EXPECT DELAYS

  Many taxpayers filing from overseas receive a letter from the IRS instead of an expected tax refund. Why? They see your name and social security numbers, but NOT the foreign based income that you are reporting. You are simply reporting world wide income in compliance with the demands of the tax code. You are also confusing the IRS. They normally expect earned income to be reported to them by the employer on form W-2. Because your employer is not located in the United States, they don’t report wages on form W-2. The equivalent in Israel is form 106, but oddly enough this data is reported to the Israel Tax Authority rather than the IRS.

For even more information, see this video: https://www.youtube.com/watch?v=rC8VsHW8n-o

The typical response letter from the IRS is coded 5447C. You must respond to this letter. If you don’t, then the IRS will not process your tax return and you certainly will not receive a refund.

The letter itself provides the instructions. Call the number listed +1-267-941-1083. They open 6 AM NY time, which is 1 PM Israel time. For shorter wait times, either call right when they open or in the evening hours.

Have the following documents / data points in front of you when you call:

1. Letter 5447C
2. Your current year’s tax filing
3. Last year’s tax filing
4. Date of birth (you probably know this anyway)
5. Your mother’s maiden name
6. Your maternal grandmother’s first phone number (just kidding)

Assuming that you pass the test, the IRS representative will stamp your case as PASSED. Your return will probably be processed and your refund will be issued. Sometimes don’t do what they say they will do. Best thing is to wait 30 days and then call IRS accounts at +1-267-941-1000 and ask them for verification. If they posted your check, great. Otherwise, ask the IRS representative what the devil happened (nicely) with just a tinge of righteous indignation. You will probably need to submit documents.

Submitting Documents If you flunk the oral examination then you will move on to the written examination. This means that you re-submit your form 1040 in writing and include original signatures. Also include proof of income (form 106 with English translation) and proof of identification (US passports and SSN cards). Allow them 6 months to process this, but it could be even slower (sorry!)

If you follow all instructions and contact the IRS at least three times and they still don’t do what they promised they would do, then you can and should contact the taxpayer’s advocate office for assistance.

Hope that helps!

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Many taxpayers receive identity verification notices from the IRS, and in most cases, the process is straightforward and can be resolved without much difficulty.

You have the following options to verify your identity:

Option 1: Verify through the IRS using your ID.Me account

 

Option 2: Use the IRS Document Upload Tool

    • Please note when they ask for the access code answer "no" and put in the notice/letter type 5447C

    • Alternatively, we can upload the documents on your behalf. (Please note additional fees apply.)

For both options 1 and 2:

    1. Allow at least 30 days to process.
    2. You can then check your status on IRS Where's My Refund or request that we pull your transcript.

    Option 3: Call the IRS

      1. Phone number: 1-267-941-1083

      1. When calling the IRS please note that there could be long wait times. We recommend the best time to call is as close to 1PM Israel time as possible, when the lines first open.

    When speaking with the IRS agent:

      • Let them know you are calling in response to a Letter 5447C letter for tax year 202x.

      • Provide the control number as it appears on the first page of the letter.

      • Be prepared to answer any question they ask from the first 2 pages on both tax returns, including:

          • complete address

          • filing status (Head of Household /Married Filing Separately / Married Filing Joint/ Single)

          • refund amount.

      • If you are unsure of an answer you may ask the agent where it can be found on the return.

      • Know the dates of birth for you and the children on the return

      • Know your mother's maiden name

      • If they ask about W-2 income, tell them since you live outside of the US your income isn’t reported on a W-2, but rather the equivalent form 106 instead.

    They hopefully will not ask any more financial questions.

    If your identity is successfully verified during the call, the IRS will typically inform you immediately. Your refund should then be released within approximately 6-9 weeks.

    Documents Required in All Cases

    Regardless of the verification method you choose, you will need:

      • a copy of the 5447C letter you received

      • the first 2 actual 1040 pages of your 202x and 202x tax returns

    Additional Documents for ID.me or Document Upload Verification

    If you are verifying online through ID.me or using the IRS Document Upload Tool, you will also need:

    Two clear copies of acceptable identification, as listed in the IRS letter (for example passport and license).