MW 'I won't let the government walk all over me': The IRS says I owe $14,000 for not declaring my Social Security. What now?

By Quentin Fottrell

'I will take the IRS to court, if I must'

"I have been sitting here waiting, worrying and wondering how they can do this to older widowed women." (Photo subject is a model.)

Dear Quentin,

I have been a widow for over six years. What is upsetting is how the government wants such a huge amount at tax time. This year's taxes are even worse. I received a letter from the Internal Revenue Service telling me that I owed them $13,838. They accused me of not reporting what I had received from Social Security.

I jumped through all their hoops, responded to them with all my documentation and I am now waiting for their response. That was two months ago. I have been sitting here waiting, worrying and wondering how they can do this to older widowed women. I had thought the government would actually hire a lot more agents, not the opposite. I will take the IRS to court, if I must.

I won't let the government walk all over me. The other thing is this: When the very first stimulus checks came out, mine was in both my name and my late husband's. As an honest person, I returned it. I did just that and waited and waited. I finally called the IRS, and it took me two weeks of calling before I actually got to speak to a real person. I am still waiting.

Senior Citizen

Don't miss: My husband and I are giving my sister $30K each year. Will we owe the IRS gift tax?

You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.

It sounds like a larger amount should be withheld from your Social Security benefits each month.

Dear Senior,

The IRS deals with millions of inquiries.

It may be that you can't do this alone - and you shouldn't have to. You've been through a lot, and you sound overwhelmed. Don't take it personally. Even knowing that you are just one of millions of taxpayers feeling left out in the cold, it can be frustrating.

No one is out to get you, even if you feel that way. Under President Joe Biden, the IRS targeted wealthy households and brought in more than $1.3 billion in overdue taxes over the course of about a year. If you have not received your updated stimulus check, it was likely due to an old-fashioned glitch or oversight at the IRS.

For stimulus payments, also known as economic impact payments, that were issued in 2020 and 2021, it is now late to file a new or amended tax return to claim them. The final deadline for claiming the last payment, the 2021 Recovery Rebate Credit, was April 15, 2025.

But your feelings are noted. One possible explanation for the letter from the IRS: President Donald Trump's tax overhaul during his first term resulted in larger retirement payments for some, so if you did not change your withholding, you would likely end up owing more money.

Related: The IRS is pulling back on audits - but not everyone can breathe a sigh of relief

Taxpayer Assistance Center

The Trump administration started to lay off nearly 7,000 new workers from the IRS earlier this year, including many who work in enforcement. This does not make your task any easier, nor does it help the hardworking employees who remain at the agency.

The Brookings Institution, a nonprofit public-policy group based in Washington, D.C., put it bluntly in response to reports that the administration would cut the IRS workforce by half: "A hamstrung IRS is a gift to rich tax cheats and a headache for honest taxpayers."

Brookings went on: "That reduction in auditing capacity is a disaster for revenue. It's called the Internal Revenue Service for a reason - cutting the IRS is synonymous with cutting government revenue."

Back to your dilemma: Social Security benefits can be taxable. "Your benefits may be taxable if the total of (1) one-half of your benefits, plus (2) all of your other income, including tax-exempt interest, is greater than the base amount for your filing status," the IRS says.

Contact your local IRS Taxpayer Assistance Center by calling 844-545-5640 to schedule an appointment. (Note that IRS offices are closed on federal holidays.) Answer all of the prompts and you should be directed to an in-person appointment. You can read more here.

It sounds like a larger amount may need to be withheld from your Social Security benefits each month. There's no shame in asking for help with this from a friend, family member, a certified public accountant or a tax attorney.

The IRS's tax withholding estimator allows you to estimate your federal income-tax refund, take-home pay and tax due. This is all affected by the amount that is withheld from your Social Security checks in anticipation of the taxes you will owe.

Related: Will the IRS write off $60,000 lost in a romance phishing scam?

Mind-boggling process

You can download this form and select the percentage of your monthly benefit you wish to have withheld, which can be 7%, 10%, 12% or 22% of your monthly benefit. "Only these percentages can be withheld," the IRS says. "Flat dollar amounts are not accepted."

Navigating the IRS and Social Security can be a complex, mind-boggling process. "The U.S. tax code isn't designed for you and me. It's hard to understand and even harder to work with," MarketWatch columnist Brett Arends wrote in this column.

"Even the 'progressive' features of the tax code, supposedly designed to help the poorest people in America, are a joke," he added. He wondered how many clock watchers or retirees "have a professional qualification in tax planning? Or a tax accountant on speed dial?" The answer: not very many.

The people who work at the IRS are doing their best under the constraints of a 163-year-old institution. They are overworked and, arguably, underpaid: The average annual salary for an IRS agent is $72,000, according to Indeed. If it can't be an IRS agent, let that person who helps you be your accountant.

For you, one friendly face may be all it takes.

Related: I've been happily married for 25 years, but I made a big financial mistake

More columns from Quentin Fottrell:

'We are acquaintances, not friends': My neighbors need somewhere to stay after a house fire. Do I say yes?

'My retirement is going to be a disaster': I'm 59 and have $45,000 in my 401(k). I earn $72,000. Am I doomed?

I have early Alzheimer's and my husband has stage 4 kidney disease. We just inherited $50K. How can this help us?

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-Quentin Fottrell

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October 05, 2025 09:41 ET (13:41 GMT)

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