A Weight Lifted

Written by: Kyle Hopkins

Each morning when I come in to work at TaxAudit.com I see our mission statement posted on the side of my cubicle: “To provide our Members with the finest income tax audit representation and the best taxpayer education available while minimizing the stress involved in dealing with the IRS or any tax authority.” While I’m in a non-tax role in the Membership Services Department, my team and I play a vital role in minimizing the stress of our members.

Each day I monitor the emails sent in by our customers requesting assistance with everything, from website problems to reporting their audits. Our company policy is to respond to all correspondence within one business day, but I make it my personal goal to have no calls left to respond to by the time I leave each day. To provide the best service and minimize the stress in dealing with the IRS, being prompt in responses to our members is vital. Oftentimes I will call a member back within minutes of receiving their email.

Frequently I hear people say how quickly we handled their problem and how a weight is lifted when they are assured that we will act promptly to take care of their audit issues. It’s easy to forget how much a prompt reply can help and how we all want to feel like someone is there for us when we need them, but I am reminded of it every day.

Recently I handled a call from a member who was very concerned about her notice, which she received late due to a move. While the notice itself was a typical 30-day notice, more than two weeks had elapsed before she received it at her new address. Not knowing exactly what to do, she turned to our website, TaxAudit.com, and found our customer service email address. I received her email, which included her phone number. Our internal system automatically generates an email response to members letting them know that a reply can take up to one business day; on a Friday that could mean they may not receive a response until after the weekend.

The member was understandably worried about losing a few more days with the deadline looming. And she was quite surprised when her cell phone began to ring less than five minutes after she sent the email. When I introduced myself and told her I worked for TaxAudit.com she was immediately relieved that we had responded so quickly. I started an audit report and went over the instructions on what she needed to do to get her case assigned to a tax professional. She was prompt in sending her documents, and when I checked on her case later I found out that an audit representative had been assigned before the end of the day, saving several days towards the deadline.

Every day our Membership Services Team strives to meet the needs of our members and understands that when we receive messages someone is anxiously waiting to hear back. Our members’ peace of mind is important and we empathize with the stress they feel when trying to get their audit process started. To all of us at TaxAudit.com meeting that expectation is an everyday thing, but we also recognize how much of an impact a timely response can have on the confidence and stress levels of our members.

TaxAudit.com gets dozens of comments from customers we have helped every week. Below are just some of the reviews we received last month.

My Audit Representative was very professional and extremely helpful in resolving my 2013 tax inquiries. I do appreciate all his time and assistance in helping me resolve my IRS issues.

Hamid, St. Thomas, VI

 

This is an excellent service, and a bargain. I’m so glad I purchased the service, and I certainly will again in the future. I received excellent service every step of the way. I have nothing but praise for your company and the employees with whom I interacted.

Harold, Tucson, AZ

 

An invaluable service for those who do not have the experience to deal successfully with the IRS. No issue is considered too trivial for their attention and effort. They make sure you are kept in the loop for the entire process and take the time to explain what they are doing and what the next steps are in terms that are easy for the lay person to understand. I highly recommend their services.

Jason, San Pedro, CA

 

I recommend that every person that file their taxes with Turbotax sign up with TaxAudit. TaxAudit gives me confidence, that, if in case of an audit, they will be there to represent me. Thank you.

Luis, Weston, FL

 

My taxaudit experience was very positive. The taxaudit representative was able to resolve my issue quickly and reduced my overall payment to the IRS by 40%.

John, Sterling, VA

 

I am so impressed with the way TaxAudit’s team handled my audit and the results. It was stressful just getting audited, but the outcome was better than I could have hoped for, and the process was simple once my rep took over! I can’t recommend you enough!

Rene, San Ramon, CA

 

When I first got the notice from the IRS I was super freaked out! But, thanks to tax audit I was in good hands. It was a very easy process and I am very pleased with the service we received. I have and will continue to recommend this service to my family and friends.

Mark, Humeston, IA

 

The IRS can be intimidating to a person who doesn’t work with numbers, papers, and forms every day. The TaxAudit professional advocated for us and in the process made resolving a simple mistake extremely easy. I’ll use them again! Hiring them was a great decision!

Jared, Katy, TX

 

First, I am a curriculum designer and seldom provide stellar feedback across the board; I’m trained to find flaws (in my own work as well), if you will. Throughout this process I have been highly impressed with the level of care, thorough explanations, and reassurance that all would be well. While I’d like to say I look forward to working with you again, this is one case (undertaker being the other, I suppose) in which I hope it’s not necessary. But…should the need arise, I know my family will be in good hands. Audit Defense will always be part of our tax prep process and I have shared our story with many already and will continue to do so! What a wonderful experience!

Janice, North Charleston, SC

 

Was grateful we signed up for services, just in case. We were fortunate you were there to help us with the audit and fix errors. Well worth the cost when we originally did our taxes. Thank you for an excellent job.

Connie, Allison Park, PA

 

I will always use and recommend Tax Audit.com, everyone that we dealt with was great! Thanks to everyone for all their help!!

James, Oliver Springs, TN

 

Your company provided much needed peace of mind and the highest level of professionalism during a highly stressful time. Simply invaluable!!

Ivory, Fayetteville, GA

 

This service totally blew me away. One missed document changed the entire tax return and I had no idea how to go about correcting the towering affect. My audit representative’s expertise and gentle guidance made the process simple. He was encouraging and confident through the entire process. I will shout your value to all my family and friends. I so appreciate this service and won’t go a single year without the protection.

Sharon, Stevensville, MI

 

This was a fantastic experience. It is the first time I ever have to deal with this kind of experience and it terrified me receiving that letter from the IRS. I greatly appreciate the re-assurance from my coordinator and audit professional during the entire process. It was more than I expected and could not have had a more pleasant experience. Kudos to them for the great work!!

Luis, Hollywood, FL

Don’t Worry, Be Happy – And Keep Good Records!

Written by: William Daly, CPA, EA

I was assigned a case for a member who had been contacted by the New York State Department of Taxation and Finance (NYS DOTF). The agency had disallowed the member’s Schedule C losses because they believed the member did not conduct his business with a profit motive due to a five year history of losses. The member had a full-time job in the banking industry. At the same time, he was trying to establish himself as a Caribbean music producer.

In our response to the NYS DOTF, we addressed the nine factors listed in the IRC regulations that are used to determine the profit motive of a taxpayer.

First, we looked at “the manner in which the member carried on the activity.” We asked many questions about how he’d conducted his business, and we were able to document much of what he claimed. He provided copies of contracts he’d entered into with various musicians and a copy of a lease for his studio. He sent several e-mail chains between himself and recording artists, recording studio owners and other producers. He also submitted a discography of all of the songs he was listed on as a producer, along with the recording artist’s name and the recording label.

Next, we addressed “the expertise of the taxpayer and/or his advisors.” The member said that in previous years he had partnered with another songwriter with whom he’d had several hit records. Many of the artists that have performed their songs did so throughout the United States, Europe and the Caribbean. The member also produced the names of thirteen other musicians, vocal coaches, and music producers he’d collaborated with over the years.

The member had become educated on the legal side of the music business through an unfortunate chain of events leading to lawsuits for copyright violations. He said he was always looking to make his business profitable and he produced the names of sources from whom he’d been able to obtain ideas and creative concepts.

We then asked the member how much time he was devoting to his business. While he was working in a full time position, he was devoting 15 to 20 hours per week to his music business, which included writing music and the operational aspects of his venture.

Turning to the next factor, “the expectation that assets used in the activity may appreciate in value,” the member was very forthcoming about the possibility of success of any one individual in the music business. He provided the names and songs that had been produced by Caribbean immigrants such as himself. The member was well aware that many artists go through a barren spell before having a hit record. But much to his credit, he never seemed to give up. He was able to document several instances where he had sent demo tapes of his music to various record producers and other music licensing entities.

His music activity was the only activity ever undertaken by the member other than full–time employment.

The next two tests were to examine the member’s history of losses in the activity as well as his amount of occasional profits.

The member was able to demonstrate that before 2011, the music business had been characterized by sales of CD’s and vinyl records. Around 2011, the music business underwent a sea change where retail record stores closed and music became obtainable via Internet download. Many established record companies filed for bankruptcy.

From 2011 – 2012, the member’s business spent heavily on production and promotion costs related to one specific artist. During that period the artist’s career began to take off in the Caribbean music scene. In fact, the artist was selected to perform at the Caribbean Independence Ball held in New York City. Afterwards, the member attempted to formally sign this artist, but the singer refused to sign the recording contract and chose not to honor his side of the agreement. Given the member’s previous experience with the legal system, he decided not to pursue any legal remedies. In addition, during that time, the member stopped working with U.S. record promoters and video directors, and also stopped making CD’s.

The last factor in the IRC regulation, “elements of personal pleasure or recreation,” at first blush, was a difficult hurdle to overcome. The member said that while he actually enjoyed writing music, he did not like other elements of the music business. In particular, he cited the hype over substance of the business, difficulty of the independent producer to access the mainstream music, and the prevalence of many dishonest individuals who do not honor their agreements.

I was very much impressed with the amount of supporting documentation the member provided to us in defense of his case. He provided copies of emails he had sent to various artists, record producers, video directors and the like, demonstrating his hands-on involvement in his business. He was able to clearly illustrate where and why the losses in his business had occurred. The member was attempting to earn a profit in the music business, which has been marked by many changes ─ primarily due to the Internet. In addition, the product of the music industry, the songs and the artists that perform them, have a very short shelf life, often measured in weeks.

I assembled the response to the NYS DOTF and had it reviewed by colleagues to see if there was anything else we could add to bolster the member’s case. Most of my colleagues were equally impressed by the amount of documentation the member had provided.

We sent the response to the NYS DOTF and waited to hear from them. Several weeks later, they responded, allowing the member’s losses ─ not only for the current year, but also for all of the prior years as well.

A few months after the member’s New York case was closed with no changes, the member received an IRS audit notice for this Schedule C activity for the 2012, 2013 and 2014 tax years. We sent in the same response to the IRS that we had done for NYS DOTF. Not surprisingly, the IRS arrived at the same conclusion as the NYS DOTF and issued a “no change” as well.

What made this case different from many others I’ve seen with a history of Schedule C losses was the documentation and the records the member provided to substantiate his position. He took a very active role in his defense by producing documents and answering our questionnaires with very detailed explanations. With my audit defense strategy and his documents, we were a power duo with a hit.

TaxAudit.com gets dozens of comments from customers we have helped every week. Below are just some of the reviews we received last month.

Awesome experience and will definitely use this service again.

Sharon, Honolulu, HI

 

Extremely satisfied. The end results were as described by my representative and everything was done very proficiently.

Blanca, Oakland Park, FL

 

Fantastic service! I’ve bought the TaxAudit protection for a number of years but this was my first time using the service. It was easy to use and my audit representative did a wonderful job keeping me up to date and explaining the situation.

Joseph, Littleton, MA

 

Great experience! Just had to get some key documents and you handled the rest! Very worth the money for the peace of mind of knowing that I was protected and represented when I got a letter.

Roberto, Dallas, TX

 

Great Service. It was a tremendous relief not to have to deal with the IRS.

Jerome, La Quinta, CA

 

Happy to have selected Tax audit protection.

Mark, Morro Bay, CA

 

I am entirely satisfied with TAX AUDIT. I consider it one of the best investments I have ever made!

Stephen, St. Louis, MO

 

I am extremely pleased how my representative and coordinator managed my case – always responsive and in a timely manner, all my questions were answered. I was walked very easily through the entire process. Thank You.

Guillermo, Denver, CO

 

I am very glad I decided to pay the money to be able to not worry about a IRS Tax Audit and have someone else deal with the IRS, the Tax Audit Defense team. Thanks for your excellent help!

Richard, Plano, TX

 

I did not know much about taxaudit.com, I did buy the coverage, but wasn’t sure how “legit” it was. My experience with tax-audit has been very professional and useful and I will recommend it to my friends and family in future.

Muhammad, San Jose, CA

 

My experience with Tax Audit was above and beyond my expectations. My audit representative was proactive, courteous and knowledgeable – he was able to quickly identify the state auditor’s mistake and explained the necessary steps he would take to rectify the error. A positive experience and will remain a customer in the future.

Francisco, Brunswick, GA

 

TaxAudit really had my back. Everything was done in a timely and professional manner to my extreme satisfaction. I will definitely recommend them to everyone I know. Thank you TaxAudit!

Leslie, Harker Heights, TX

 

Taxaudit.com was professional and reassuring during a difficult process. I will always get your service and will recommend to all my family and friends.

Elaine, Senoia, GA

 

When I received the letter from the IRS I was very concerned that I had filed something incorrectly. Using TurboTax is very simple but there were different circumstances for that particular years taxes. I was very glad I had purchased protection through TaxAudit. I immediately logged in and requested help and received it immediately. From the first contact to the last contact, everyone was very helpful, experienced and attentive. My issue was resolved in approximately 7-8 weeks. I couldn’t be happier with the outcome. I will continue to use TurboTax for my tax filing with the utmost confidence that TaxAudit will be there to help if needed. Thank you for your services.

Debbra, San Antonio, TX

Five Hundred and Sixty-Six Days

Written by: Ame Galloway, EA

It started off as any normal CP75 starts off. A simple notice asking for proof of Filing Status, Dependents and Earned Income Credit. These types of IRS notices are never easy to handle, and I didn’t expect it be. But I wouldn’t have guessed it would take five hundred and sixty-six days to resolve it.

The first thing I had to do was prove that there was a qualifying relationship between the member and the dependents she’d claimed. Because the member was the aunt and not the mother, obtaining the birth certificates for everyone concerned proved to be quite a task. She had to order new birth certificates from PA, and three months went by as we waited for them to arrive. The relationship was established, though, piece of cake.

Next we were on to residency. The school for two of the children provided a letter showing that they had lived in the home for five months of 2013. The address listed in the letter matched the address on the Department of Social Services Income Support Application for the beginning of that same year, which further supported the claim.

Rent receipts and utility bills were submitted, but the money order receipts were not accepted because the IRS said anyone could have purchased them. Head of Household was denied and we conceded because it did not change the bottom line owed by the member.

We sent the information regarding the income of other adults residing in the home and proved that the taxpayer had both lived in the home and had the highest AGI in the household. But the IRS still was not satisfied. The examiner’s response letter said, “To qualify as a dependent you must verify that you provided for the majority of that person’s support and that the person lived with you for over six months.”

Meanwhile, so much time had lapsed that the Notice of Deficiency was issued and the case was transferred to another unit. The taxpayer was able to obtain additional medical records for the children, which we submitted to the IRS along with another detailed explanation of why the children qualified as dependents of the member.

Then months went by with no word from the IRS. As I was not sure if the medical records would suffice, I continued to ask the member for a copy of the lease agreement that she had not yet submitted to me.

Unfortunately, the audit process had taken so long the member was unable to continue to pay the rent. The $8K refund from the prior year’s taxes that she had been expecting had not materialized, and we learned that her current year refund had been taken by the IRS to cover the tax deficiency from the audit. The member’s sisters were unable to make ends meet, and without this money for the household they were forced into shelters with the children. The member tried her hardest to keep everyone together and had even stopped going to school so that she could work more hours. She put her possessions into storage and moved into a hotel. I continued to press her for the lease agreement and another two months went by without the document.

I submitted a form to the Taxpayer Advocate Service explaining the member’s hardship and asking for assistance. Weeks went by before I finally received a response letter, and then I finally received the lease agreement from the member – by this point it was 16 months after the initial request for documents proving residency. I sent the new information to the advocate, who said she would forward the information to the IRS.

When I called to follow up the advocate informed me that the examiner had disallowed the case because no proof had been provided for the six months of residency. “The only thing we can do is appeal the decision,” she explained.

I asked if she had provided the lease to the examiner and she answered, “Certainly I did.” But three days later I received a letter from the auditor that contained no reference to the lease agreement, so I contacted the advocate and asked to speak with her manager.

Another 26 days went by before the advocate’s manager finally returned my call. We went over the history of the case and the hardships the taxpayer had experienced due to the drawn out audit process. I explained that no one lives their lives thinking that they are going to be audited and that they will need to prove that someone lives with them. We reviewed all of the scattered pieces of evidence that proved that at different times in 2013 the children had lived at the same address as the taxpayer. “It is illogical to think that these children lived anywhere else,” I argued. The advocate’s manager promised to forward the items herself to the correct IRS examiner for me.

One month and five days later I received the ultimate phone call from the advocate. Appeals had ruled in favor of the member and the member’s refund of over $9K would be going out by mail.

Resolving the case had taken five-hundred and sixty-six days from beginning to end. Persistence paid off once again.

TaxAudit.com gets dozens of comments from customers we have helped every week. Below are just some of the reviews we received last month.

My audit representative was fantastic. He helped me throughout the entire process, and for a first time audit was frightening. However, his calm and systematic approach is the way I operate, so I couldn’t ask for anything else. Thank you.

Robert, Aurora, IL

 

I will recommend TaxAudit to family and friends.

Frank, Rockville, MD

 

My audit representative did a fantastic job of helping me through this process. She was very professional articulate and understood acutely the steps necessary for complete resolution. She explained things thoroughly, and communicated constantly as we worked through the matter. I would recommend her highly to anyone needing assistance.

Sean, Cedar Rapids, IA

 

The small amount that I pay each and every year for this assistance and protection makes “tax time” much less stressful. Everyone that contacted me was exceedingly courteous, knowledgeable and polite. Hats off to my audit representative who was most impressive in accurate and timely customer support. Five stars!

Scott, Milford, DE

 

My audit rep was the most helpful and continuously updated me on the status of my case. Very funny too lol. Over all I had a great experience, although I was anxious at first but he really helped me out.

Claire, Miami, FL

 

My audit representative was terrific to work with – she explained everything in simple terms and went the extra mile to make sure I understood everything that was happening and what to expect from the IRS review. Great service and great people for very low cost. I couldn’t be more satisfied with the service. Thanks so much.

Robert, Stonington, CT

 

I was extremely pleased with the level of service I received. I thank you guys for a job well done.

Cesar, Atlanta, GA

 

All the representatives were helpful, courteous, professional and personable. They made the experience of dealing with the IRS a pleasant one. We were pleased.

Needham, North Myrtle Beach, SC

 

I’m impressed with how organized and very informative the support has been provided to my case.

Darjadi, San Diego, CA

 

My audit representative could not been better. She calmed this worried tax payer in only moments and stepped me calmly through the process always letting me know what the next step would be. She gave me peace of mind. This is the first time I’ve had to use TaxAudit and it was more than worth its cost.

Julie, Menlo Park, CA

 

I will always purchase audit defense every year because this service was so amazing.

Nick, Papillion, NE

 

When I received the notice from the IRS, I was afraid. The notice stated I owed $18,000! Once I contacted Tax Audit, my audit team calmed my fears and handled everything. The team resolved my issue and I will be referring Tax Audit to family and friends!

Cassandra, Brockton, MA

 

While no one wants to be audited, having your service made is a lot less stressful. Thank you all for you help and assistance.

James, Spring, TX

 

I have now used your services for two different tax years and can’t imagine fighting this on my own! Outstanding job!

Cary, Round Rock, TX

 

This service is worth every penny, and your team is A+. Thank you.

Adam, Medway, MA

 

A painful experience with the IRS was made tolerable with your assistance. Thank you.

Steven, Amarillo, TX

 

This was extremely stressful until you took over. You are amazing. Thanks for everything.

Angelica, El Paso, TX

 

When I received the letter from the IRS I was nervous and confused. After communicating with my Representatives and them explaining the process, I began to understand what was going on and started to relax. Throughout the entire process I have felt guided and informed. Also, the first time I had to deal with the IRS and it ended with a great outcome. Thank you all for your assistance.

Michael, Richton Park, IL

 

I have had a great experience with both the coordinator and audit representative assigned to my case (IRS audit). I am so glad that I have purchased this service when filing taxes. I am extremely pleased with the ease of communication and professional service provided. I would definitely recommend that everyone pays the small extra fee for this service–what a small price to pay for a peace of mind!

Olga, Clarksville, TN

One MBA

Written by: Jonathan Crosby, EA

The file arrived on my desk on January 27, 2015. It was a correspondence audit out of Philadelphia, and it concerned the member’s Schedule C business expenses. On first review I wasn’t feeling overly optimistic about our chances of success. The reason was that the member had reported travel expenses in the amount of $2,163 and an expense of $18,900 that was described as “One MBA.” There was no income or any additional expenses reported on the business schedule. Knowing that educational expenses incurred to qualify for a new trade or business are not deductible ─ and that the IRS for the most part denies MBA expenses ─ I wondered how I was going to approach this case with the member and the examiner.

After consulting with the member and discussing with him the Federal tax regulations contained in Sec. 1.162-5 Internal Revenue Code, Expenses for Education, he agreed that his situation did not fit the definition and qualifications for deducting MBA expenses. He was ready to concede, while I felt that his case was worth fighting for. The member’s initial intention in obtaining his MBA was in fact for maintaining and improving his skills in order to enhance the business that he was running, which would make the expense deductible. I decided that the strategy would be to move forward under the assumption that the taxpayer did qualify for the deduction under Sec. 1.162-5, and as along we could validate the expense we would have a good shot at winning it.

I began by having the taxpayer recreate his travel expenses, which were all incurred for the purpose of his education. I also asked him to furnish proof of payment for tuition expenses.

The response was submitted on February 04, 2015, to IRS Exam, and on March 23, 2015, I received the coveted Letter 3581 that said, “We are pleased to tell you we did not make any changes to the tax reported on your return.” The taxpayer was extremely grateful, as he was facing had we lost a tax liability of $7,403 plus penalties and interest. I was thrilled that I had won another difficult case.

TaxAudit.com gets dozens of comments from customers we have helped every week. Below are just some of the reviews we received last month.

Although my case was clearly a computer error, I felt pressured by IRS to pay immediately. If I didn’t have the professional help and support from TaxAudit.Com, I probably have paid when I really didn’t owe anything. Thanks TaxAudit.Com!

Isaac, Everett, WA

 

My audit representative was very helpful in my audit case. She helped to save me over $2000 in a tax error. I’ll make sure to buy Audit Defense every year since this is great service and offers peace of mind.

Tracy, Fremont, CA

 

For the first time I have had to go through an audit, I could not have been happier having my representative. The experience was wonderful.

Walter, Brandon, MS

 

Great people to work with. Very professional. Talking with them made me feel like I could trust them and expect the best service possible.

Terry, Melbourne, FL

 

Great service, good aspirin for IRS headaches.

Adriaan, Windermere, FL

 

I had a great experience with my audit team. Everything worked out to my advantage and I was very happy with the outcome.

William, Nicholasville, KY

 

I was so worried when I got the notice from IRS but after talking to the tax audit team I felt completely relieved that my situation will be handled professionally and the outcome was superb. You have an outstanding team and I will not hesitate to recommend Tax Audit team to anybody confronted with the same dilemma I went through. More power to your team and God Bless.

Romeo, Dunnellon, FL

 

I was very happy I had chosen TaxAudit, it helped me to address my case very easily with no stress given the short time I had to respond and my busy schedule. Thank you TaxAudit team.

Jorge, Mountain View, CA

 

I will always use Turbo Tax service and highly recommend the use of TaxAudit when necessary. I first went to an IRS office and they were to busy to help me, their phone service suggested that I go back to their offices and desperation motivated me to turn to TaxAudit. Your services took over and I am so pleased with the service you provided. That you very much.

Marcia, Winchester, CA

 

I would not think of filing taxes without buying TaxAudit.com. I’ve had three situations where the government had made a mistake, and the service saved me hundreds of dollars by figuring out the error. Way to go!

Pamela, Annapolis, MD

 

I would recommend that everyone take advantage of this service each year. In this day and age with the IRS being more aggressive and more difficult to deal with this service is priceless!

David, Tinton Falls, NJ

 

My audit rep was a great source of relief for us! She told us exactly what to do and what to expect. It all went down just as she said. She took the stressful situation and made it come out right.

Sandra, Sherwood, AR

 

My audit was handled in a very professional manor. My audit representative made the audit a pleasurable experience, if you can say that in the same sentence. He was relentless to answer every single question and when he replied the answers were clear and to the point. He would often answer the next question before I could ask it. I am a banker working as a controller in Switzerland and in my opinion my audit representative not only met my expectations but managed to surpass them. In my environment we deal with complex government regulations but he managed to explain the IRS complexity and requirements easy to understand. I would recommend my audit representative and the services he represents at taxaudit.

Victor, Weesen, Switzerland

The Case of the Missing Homebuyer’s Credit

Written by: Cheryl Panattoni, EA

I just closed a case that was related to an audit I handled a few years ago. Back then, as I was reviewing the member’s return for the 2010 audit issue, I noticed that she had never applied for the first time homebuyer credit, even though she qualified for it. The credit was worth $8,000, and I advised her to amend her 2009 tax year to claim it. As long as she held on to the home for 3 years and used it as her principal residence she would not have to pay it back.

The challenge was that the IRS examiner was denying the credit because the member had paid property taxes on a vacation rental (timeshare) in 2009. This, he believed, showed that she’d had an ownership interest in a principal residence during the three-year period ending on the date of purchase of the new principal residence, which disqualified her from being eligible for the credit. The case was further confused because the member had inherited a home that she and her partner had lived in together before she died suddenly.

I was assigned the member’s second case in early July of 2013. I sent out the first response on July 23, 2013, and even though we received a confirmation that the letter was received, we did not receive an answer denying the credit until March of 2014. We sent another response in April of 2014, and our second denial arrived in August of 2014. This time the IRS claimed that the member had sold the home prior to the 3 year holding period.

The issue was even further confused by the fact that the member had transferred the inherited property into a trust and had sold the property for a loss prior to the 3 year mark. We had to submit Form 5405 to indicate that she had sold the property for a loss, along with a copy of the trust documents listing the member as a sole beneficiary.

In September of 2014 we submitted a letter for a Small Case Appeal. I followed up to confirm the IRS had received it, but at some point later they lost the file. Finally, in May of this year I put in a request for help with the Taxpayer Advocate Service (TAS). I had to submit the case to the TAS office twice and make numerous follow up calls.

Yesterday I received a call from the advocate that IRS had closed the case, allowing the credit and granting interest in the amount of $1,515.42. The member will receive a refund of $9,515.42. Needless to say, she is thrilled with the result.

TaxAudit.com gets dozens of comments from customers we have helped every week. Below are just some of the reviews we received last month.

My audit representative was very knowledgeable and courteous. Her guidance and support was very helpful in getting the case dismissed. She also contacted me to make sure I was aware of the next steps and what to expect. It was much appreciated.

Sherif, Osprey, FL

 

I must say my case was handled very professionally, I was kept up to date at all times, the information portal was easy to use, and most importantly, my case was satisfactorily resolved. I have been paying for Tax Audit services for 10 years and this is the first time I needed to use. This one case that you resolved for me paid for the service five times over what I paid in in the last 10 years. It is a better investment than the stock market. Thank you.

Philip, Utica, MI

 

I highly recommend TaxAudit.com, you’ve earned my trust.

Bradley, Naples, FL

 

My audit representative was outstanding. This was a long process and she kept me informed every step even if just to tell me that we hadn’t heard from the IRS. I trusted her completely and her guidance proved to be spot on. I will never file a tax return without Tax Audit.com.

Dorothy, Dallas, TX

 

My audit representative did an outstanding job representing me and advising me on my Tax Audit Situation. Everything worked out well with no penalty.

Lee, The Villages, FL

 

Great service. I wouldn’t submit my return without signing up with TaxAudit.

Herbert, Tucson, AZ

 

I am completely satisfied with the service provide by TaxResources, Inc. I would not want to file any tax form without their protection.

Donald, St. Paul, MN

 

I am extremely pleased with the way my issue was handled by my tax audit coordinator and my tax representative, who treated me like a valued client, was knowledgeable, professional and guided me through the process expertly. My tax representative was easy to talk to, responded quickly to my inquiries, was very professional and knowledgeable and I was confident in her professional approach to a resolution to my tax issue. I received a prompt resolution and was kept informed at all times. I am very pleased and will continue to take a membership with Tax Audit. Thank you.

Rose, Mattituck, NY

 

I feel very comfortable and very satisfied with excellent quality of service provided to resolve my Tax Audit Issue from IRS. My audit has been completely resolved with my satisfaction.

Moreno, San Jose, CA

 

I thought dealing with the IRS was going to be the ultimate nightmare – considering 2 audits were triggered. However, my audit representative saved me all the headaches and helped me resolve my issues in a timely manner – hard to find words to describe how much I appreciate the help from the TaxAudit team. Thank you!

Catalin, Folsom, CA

 

I was very impressed with the quick response once I reported receipt of letter from IRS. My representative made this a painless experience and helped alleviate a lot of “IRS anxiety”. Thank you!

Wanda, Pearl River, LA

 

I’m not sure how I would have made it through this stressful time without the help and patience of my agent. She was wonderful and really helped to ease the pain of being audited by the IRS. Thanks again!

Stephanie, Houston, TX

 

It was a great relief to have the TaxAudit.com representation and I was very grateful to my representative for all the advice and time he spent on my case.I will purchase Audit Protection every year and will recommend highly!

Sheila, Calabasas, CA

 

My wife and I were selected for a full research audit by the IRS. The entire process lasted eight months, and we’re still waiting for the final letter from them confirming that they’re finished. We greatly appreciated all the help we received from our audit representative during this lengthy process. He was always available to answer our questions, and provided really good guidance throughout.

Christopher, Columbus, OH

 

Tax Audit and my representative was very helpful and save me A LOT of time. I do not know what I would have done with this full audit if it had not been for having the TaxAudit service. I will defiantly buy this service every year when I file.

Daniel, Wilmore, KY

 

The ability to hand the matter off to a representative was invaluable. If it wasn’t for the representation, I would have just written off the refund because it wouldn’t be worth the stress. TaxAudit.com really came through.

Michael, Spokane, WA

 

We are very pleased; the audit team took over and handled the situation for us entirely. They changed the situation from a charge of approx $4,000 to a credit of $15. And we were spared the headache of dealing with the IRS!

Myron, Wakarusa, KS

 

You are AWESOME! My Dad was afraid he’d have to deal with the IRS all by himself, but having you there to help him was great. You took care of his tax issues and gave him peace of mind – WONDERFUL!!!

Michael, Ocklawaha, FL

Not All Pay Is Treated Equally

Written by: Jonathan Crosby

In March of this year I was assigned a case for a member who received a notice from the IRS. It was a CP2000 Automated Under Reporter Notice. She had received $81,514 for performing a fellowship for a nonprofit research organization, and the IRS now claimed that the income was subject to self-employment tax. She was being assessed an additional tax liability of $12,323, including penalties and interest.

This was the perfect case for me, as I had recently learned about a 1960 IRS ruling (revenue ruling 60-378) and a 1987 notice (notice 87-31 [1987-1 CB 475]) in which the court held that fellowship and scholarship grants should not be treated as income “derived from a trade or business” for self-employment tax purposes unless teaching or other services are a condition of receiving the award. Armed with this knowledge, I asked the taxpayer the appropriate questions to ensure that she met the qualifications summarized in the court case. I was happy to learn that she had not been required to perform teaching or other services. I asked her to get a letter from the organization attesting to her participation in a non-profit fellowship research program. This was the document we needed to prove our case that she was not subject to SE tax.

Once I obtained the letter along with the member’s Form 1099-MISC, I wrote a response quoting the court ruling in my argument. On July 02, 2015, I received notification that the inquiry was closed with no change to the taxpayer’s original return. Needless to say, the member was extremely relieved and grateful for our service.

TaxAudit.com gets dozens of comments from customers we have helped every week. Below are just some of the reviews we received last month.

My audit representative was very knowledgeable and professional. He gave me the guidance and feed back needed to deal with my IRS issue/concern! Thank you!

Luther, Colorado Springs, CO

 

Can’t put into words how the team reduced the pressure and anxiety that one has with such an experience.

Glenn, San Ramon, CA

 

Our rep was GREAT!!! She was very friendly, personable, knowledgeable, clear in her explanations, and overall just a pleasure to work with!!!

Michael, Alta Loma, CA

 

I am completely satisfied, and grateful, for the prompt and professional process TaxAudit.com handles issues with IRS Notices. I am especially pleased with my audit representative and his thorough and prompt communications and processes in resolving the case. I have been involved in issues for the past three years with the IRS and we figured out why the issues were occurring and resolved flaws in the reporting of my 1099s to the IRS. I cannot thank all of the TaxAudit.com staff enough for relieving the stresses of handling IRS issues.

James, Brandon, FL

 

I was very apprehensive. The TaxAudit.com team explained the process and walked me through how they thought the process would work. They immediately contacted me when it appeared a scam artist had reached out to me. I cannot be more pleased with the quality and service of my representatives.

Charles, Foster City, CA

 

Insightful, impressive, and responsive. Thank you, TaxAudit.com.

Cheryl, Great Falls, MT

 

Much better than I could have ever imagined. Worth every penny!

Robert, San Marcos, CA

My Story of Perseverance and Commitment to Our Members

Written by: Brett Rosser

I was assigned this case in April of 2013. At the time it was an office audit, and it was being conducted by a Tax Compliance Officer (TCO). As I went through the two banker boxes of documents, bank statements and the members’ QuickBooks file, I found that many of the documents were in Chinese. This was due to the fact that the members’ business is importing products from China. I reviewed the documents with the TCO over a period of about six months before she told me about her pending retirement. While she advised me to expect a no-change report, she never did send it, and the case was transferred to a new TCO.

The new examiner contacted me to request more information about the reported income and said that the previous auditor had made quite a few adjustments, resulting in a balance due of about 116K. The new TCO refused to review some of the support documents and made adjustments solely based on the QuickBooks file, which was known to be incorrect. One major obstacle was the Chinese documents, which had to be verified. The member hired a third party to complete an income analysis, identify the numerous transfers, and try to lower the almost 200K in additional income the auditor was applying to the current report with a new balance due of 269K due for this two year audit.

During the analysis the firm completed pro-forma returns so that I could show the auditor what the correct adjustments should have been, but these just seemed to confuse the TCO even more. We were able to get some of the expenses adjusted, but for every step we took forward the auditor seemed to change her focus, make assumptions, and make unfounded adjustments. In my last meeting with the TCO she said, “this is all over my head,” and soon after that the case was transferred to a Revenue Agent (RA).

The transfer took place in January of 2015, twenty months after the case had first been opened. The new RA was equally confused until I met with him to explain the member’s business, the history of the case and the associated records. The RA questioned some of the actions that had been taken previously on the case by the TCOs’. He said he appreciated the effort that had been put into creating the pro-forma drafts. He suggested that the amended returns be signed and submitted so he could accept them. Within a week, the amended returns were sent to the auditor, and three weeks later I received a report that matched the amended returns.

This case proved to be challenging due to the nature of the member’s business, the lack of expertise of the TCOs’, and the transfers of the case within the IRS. After more than two years, finally the case has been closed and the member’s tax liability went from a high of $269k to a final number of $23K. The member has expressed his appreciation and gratitude for the efforts we made on the case and the final results we achieved.

TaxAudit.com gets dozens of comments from customers we have helped every week. Below are just some of the reviews we received last month.

Our Tax Representative made follow-up contact with us following the IRS review of our case to apprise and advise us on how to proceed in bringing our case to closure with the IRS. Our tax representative greatly eased our anxieties and diminished our stressors because the Power of Attorney authorized her to communicate with the IRS. My husband and I greatly appreciate our rep’s advice and expertise, as well as the service she performed on our behalf.

Jeanette,Starkville,MS

 

My tax representative was super awesome. I couldn’t have had a better (albeit scary) tax situation. Our rep was patient, helpful, very informative and kind. Super awesome. Give him a bonus and a trophy. Awesome.

Tia, Woodbury, NJ

 

Tax Audit Defense was brilliant. This is the highest value tax service. I will continue using Tax Audit Defense until I no longer have to file taxes.

Amy, Los Angeles, CA

 

My reps were great. I felt very confident that they researched my situation throughly and professionally. Even though they concluded that I did indeed owe the IRS, they offered suggestions for me to avoid my errors in the future.

Paula, Pensacola, FL

 

I was really impressed with everyone and the service was great – I really can’t believe how professional the whole service was and is.

Peter, Winnetka, IL

 

Thank you so much, TAC, for your Amazing service, for your support, help, consideration and professionalism! I am Extremely Satisfied for the Service you and your team provide in my case! I will definetely highly recommend tax audit service because of the way you handled my case! God Bless You!!!!!!!

Janice, Venice, FL

 

My representative was extremely knowledgeable and patient with me through the audit process.

Brodgerick, Katy, TX

The IRS Does Have a Heart

Written by: Vanessa Elkins

When tragedy strikes sometimes life’s lessons hold the answers. This story begins when one of our Members received a CP2000 notice from IRS on February 23, 2015, with a proposed balance due of $1,858.

There was nothing unusual about the notice. The IRS was questioning retirement income, gross versus taxable. It was the taxpayer’s circumstance that caught my attention and made the case very sensitive in nature. You see, the Member’s husband had just passed away on February 3, 2015. For the next 20 days the Member’s life began to become a nightmare. She discovered that her husband had cancelled his life insurance policy and she was forced to default on all her bills. She had no idea how she would even be able to buy groceries. The Member did not work throughout the course of their marriage and had no other source of income outside of the Social Security she would receive from her husband. When she received this notice she panicked and was extremely upset as she began to explain her situation to me.

What the Member really needed at that moment was to unload all of her troubles, so I quietly listened as she shared her deepest concerns with a total stranger. As she spoke, she was finally able to calm down. It was then that I explained the notice and all of her options. Next I requested a Power of Attorney and all supporting documents. It became very clear as I reviewed the documents that the notice was correct. I starting wondering, “How in the world can I help this Member?” Then I remembered my Grandmother’s story. The exact same thing had happened to her when my Grandfather passed away. She had called the IRS and explained her situation to them and they cleared the matter up for her. I thought about it and decided to give it a try. The worst thing that could happen would be that they would say no to my request.

I called the IRS and explained the taxpayer’s situation and asked if there was anything at all that could be done to help this Member. He asked me for the date of death of her husband. I provided this information with a copy of the death certificate. As he reviewed the file he determined that the total income belonged to the deceased. He then told me to explain to the Member that she would need to wait for the next notice. He would not provide any additional information to me on that call.

When the Member received the notice she called. She was extremely excited and asked, “Is the notice really true?” She had received a new notice with a zero balance due. She could not have been more satisfied with the outcome and thanked me over and over.

This case reminded me once again that when it seems as if there is no help for the Member and they are facing dire circumstances, you can dig a little deeper and go that extra mile. You never know what victory may be waiting for you around the corner.

TaxAudit.com gets dozens of comments from customers we have helped every week. Below are just some of the reviews we received last month.

Everything was outstanding! Expert knowledge and handled situation quickly and completely. Made all aspects of dealing with this IRS interaction painless and worry free.

Christopher, Hollister, CA

 

I love TaxAudit. I have been audited 3 years in a row and saved thousands of dollars. I am so grateful. Your service is fantastic! I am a member for life. Thank you.

Janet, Fiddletown, CA

 

The professional staff and audit lead were extremely knowledgeable and their expertise was evident in their continuous oversight, IRS auditor interface and overall case conclusion – which lead to a positive an accurate final outcome. Excellent service was provided and I could not have done this without the help of Tax Audit!

Matthew, Goodyear, AZ

 

I have never been so glad that I purchased a protection service before! I will continue to use the audit protection through TurboTax!

Jeffrey, Old Town, FL

 

I was happy working with your team and I will always call on tax audit if I ever need help.

Benjamin, Brooklyn, NY

 

I have purchased the additional coverage for years and I’m so glad I did. Everyone was professional and educational. Thank you so much!

Becky, Mission Viejo, CA

 

Although I was not being audited, my tax professional answered all my questions and helped me with the correct response. He even offered to look over my amended state return to make sure I did it right. This was above and beyond!

George, Glendale, CA

There’s Never a Good Time for an Audit

Written by: Arnold van Dyk, Esq.

Over the past year I dealt with a case that was somewhat difficult and unique, both because of the tax issues involved, as well as the personal issues that the members were going through.

The members were under audit for two separate years, and the case was initially assigned to one of our outside representatives in Texas. After the examination there were several adjustments, but the two largest ones were:

  1.  Almost $200,000 adjustment for underreporting income.
  2. Disallowing more than $100,000 for a theft loss deduction the members claimed on their tax return.

A Notice of Deficiency was issued, with adjustments totaling nearly $150,000. This was the amount the I.R.S. was asking them to pay.

When I first spoke with the member, he was very concerned, and even asked me if he was looking at potential jail time. I tried to calm him down and asked him to give me an explanation of the two main issues on the Notice of Deficiency. He gave me the following explanation:

  1. For the underreported income, he had received “loan payments” from a very wealthy friend. All these funds were used in the course of the business. The problem the IRS examiner had was that there were no loan repayments occurring. The examiner believed that these funds had been received as payment for some type of goods or services.
  2. For the theft loss deduction, the member said he’d had gold bullion coins in excess of $100,000 that had been stolen. He did submit police reports, and had tried to establish the value of the coins from a guidebook of U.S. coins. But the examiner did not accept the taxpayer’s valuation because there were too many discrepancies in the description of the actual coins he claimed to have had.

We decided to file a petition with the Tax Court to dispute the claims, however, shortly after filing the petition, the member called me with some horrible news − he had been diagnosed with brain cancer. The doctors told him his prognosis was not good. I told him to focus on taking care of his health, and we would do our best to take care of the IRS issue for him.

After this call my interaction with the member was limited. I left him messages with status updates as needed, but I did not hear back from him. A few months later his wife called to let me know that he had passed away. She was somewhat distraught, obviously because of her husband’s passing, but also because she did not know how she could possibly pay the amount of money the IRS claimed she owed.

Fortunately, their case was assigned to a very sympathetic I.R.S. Appeals Officer. She looked at all the facts of the case and considered all the issues and arguments we had made on the issues. She removed the adjustment for the unreported income entirely, and allowed almost half of the theft loss deduction the members had claimed. This brought the final agreed upon settlement amount to less than $23,000 of tax due. The member’s wife was very happy and relieved. While the member was not able to share in this good news about the outcome, I hope he knows that we did everything in our power to help him and his family in this difficult situation.

TaxAudit.com gets dozens of comments from customers we have helped every week. Below are just some of the reviews we received last month.

My audit representative was fantastic! She is responsive, a very good communicator, and clearly understands the tax law. I would highly recommend her to anyone!

Patrick, Cumberland, RI

 

My audit representative was very patient and informative. I was 100% confident that she was well versed, experienced, and educated. I had no doubt that my audit from the IRS would be resolved correctly and to my best legal advantage. I felt as though she really cared about my tax audit, that I understand the process and reasons for the audit. She guided me through the process and was helpful in where to get the information that she needed to complete the audit process from our end. I could not have been more satisfied with her service, expertise, and professionalism.

Jeffrey, San Antonio, TX

 

My audit representative did an excellent job in replying to the inquiry from the State of Missouri Department of Revenue. In short order, she prepared the necessary documents to support the deductions claimed. The State quickly closed the case without any adjustments. I highly recommend the professionals at TaxAudit.com!!!!

James, Ballwin, MO

 

Easy to use, good service that gives peace of mind.

John, Oklahoma City, OK

 

Everyone was courteous and professional. My audit representative was polite, professional, and reassuring. I will continue using Turbo Tax and include Audit Defense on future tax returns. This was (albeit brief) an awesome experience. Thank you.

Phyllis, Aldan, PA

 

Having somebody to represent me from a tax audit is very stress relieving knowing that everything will be settled, done in a timely manner, and in a professional way! Thank you for all your help!!!

Jennifer, Carlisle, PA

 

I could not have been more pleased with the service and responsiveness of your representatives. This is a most professionally provided service and well worth the annual fee.

William, Minnesott Beach, NC

 

I’m so thankful for taxaudit.com. Any questions we had were answered, our concerns were addressed, and all along I had the ease of knowing that in the end we would do the best we could given that we had qualified representation. Well worth the money. It was so hassle-free I was completely amazed.

Brian, Houston, TX

 

Our audit representative was great. All of our audit issues were resolved without a hitch.

Mark, Santa Ana, CA

 

TaxAudit has eliminated the anxiety I once felt about dealing with the IRS or State agencies. I would NEVER be without TaxAudit. It just might me the best money I have ever spent. Thank you TaxAudit. I no longer fear a letter from the IRS.

Sharon, Savoy, IL

Today was a Gentle Reminder of Why I Love my Job

Written by: Karen Luckart

My daily job can be routine and sometimes not so routine. Correspondence from the IRS can be unsettling, to say the least, for our members. Recently, a case came across my desk that was one of those “not so routine” cases. I was able to lend an ear to a person in need, and it made my day.

In the midst of making a series of routine first contact calls, I dialed a number to make an introduction. When a woman (our member) answered the phone, I was greeted with a shaken and broken tone. I introduced myself and explained why I was calling. The woman on the other end of the line began to cry. While reminding myself not to cross “that personal” line, I asked if everything was okay.

Normally, people are shaken up because of the unknown regarding the audit notice they have just received. But this was different. And then, just like that, out came a whole lifetime of moments and memories. The member, still crying, shared with me the loving life that she’d had with her “brilliant” husband. She described him in detail − what he looked like, what his voice sounded like. She told me how they had moved from their house by the beach to their house in the mountains because of his love for architecture. He’d enjoyed restoring houses to their former glory. As I listened, I could hear her smile as she described more details about their life together and the memories they’d shared.

As she continued with her story, her voice began to exude sadness and she started to cry once again. She described an urn that she was holding in her hands and explained that her husband had just passed away at the beginning of the month. She had just received his ashes about a half hour before I called. I apologized for my timing.

The member continued to talk, telling me about her husband’s cancer and untimely demise. She said the audit could not have happened at a worse time. I tried to think of something to say to her, something that we have been trained to say. But I had nothing; instead, I just listened. By the time she reached the end of her story, she seemed to be at peace. When I got off the phone with her, I had to get up and walk away from my desk.

Today, I could not be more grateful that I had the pleasure of being on the receiving end of this phone call. The woman just wanted someone to listen to her. It was a good reminder that when we pick up the phone, one hundred percent of the time, the person on the other end just wants to be heard. At times it is easy to forget to be personable because the calls and interactions can become somewhat routine. People can be frustrated, rude, or whatever the situation may be. And sometimes, on days like today, moments like this remind me of exactly why I love my job.

TaxAudit.com gets dozens of comments from customers we have helped every week. Below are just some of the reviews we received last month.

2013 was the first year I used TaxAudit. Because of my experience I will use it every year from now on.

Joseph, Alta Loma, CA

 

My audit representative was really great to work with. Even down to the fact that she adjusts her work hours on the west coast to accommodate clients on the east coast. I expected to work with someone that knew how to correct the problem and she certainly was that, but the part of the service that made me the happiest was the communication. Getting audited, even knowing that I was not wrong, is a stressful event and my representative kept me 100% in the loop, always accurately communicated next steps and always delivered on what she said. Her ‘bed- side manner’ was fantastic!

Adam, Reston, VA

 

Audits are extremely stressful and intimidating. Having an intelligent, compassionate audit rep relieved a lot of my stress and made it as easy as possible.

Melissa, Artesia, NM

 

My audit representative handled my case extremely well. The process took over a year to resolve and he did an excellent job keeping me abreast of the processes which were complicated and took over a year to resolve due to IRS work loads. I am extremely pleased with my experience with Tax Audit.com and find it foolish not to have the protection afforded by paying for this service. I could have never navigated this myself with the IRS. Thank you TaxAudit.com!

Wayne, Beverly Hills, FL

 

How scary to get a letter from the IRS. Our audit support team walked us through every step of the way and we were able to provide all the required supporting documents. The day we got the letter stating no additional paperwork had been requested and the IRS had not made any changes to our refund we were over joyed. Our Audit support team was an excellent partner during this process and money well spent.

Tammie, Wartrace, TN

 

Saved me a ton of headache and thousands of dollars! Lots of peace of mind knowing someone qualified was fighting for me. My audit representative even fought them on the last $10 or so, which probably created extra work for him but he suggested we do it anyway. After I got off the phone with him today I signed up for the yearly plan so I know I’m covered in the future. Thanks for making this scary, pricey situation vanish.

Dennis, Brooklyn, NY

 

Signing up for the service was one of my best decisions. All I had to do after receiving a notice from the IRS was to provide documents requested by the TaxAudit personnel and she took care of everything else. I will continue to purchase this service when I file my tax returns.

Soonkyu, Fair Lawn, NJ

 

My local representative was extremely helpful and obtained excellent results with my audit.

David, Goodyear, AZ

 

This process was very well organized and professional. My audit team member was wonderful. She persisted with the IRS and got a resolution in my favor. Tax Audit worked so well I went back and purchased it for previous year’s taxes. Thanks again.

Victor, Suwanee, GA