Hard Act to Follow

Written by: Jonathan Crosby, EA

I received a new case in July. It was your typical Letter 566 exam questioning the member’s Employee Business Expenses. I did a quick review of the return and learned that the member had reported ten W2’s for income of $5,338, which seemed quite low compared to the $20,098 that he’d reported as unreimbursed employee expenses on his Form 2106. I knew this was going to be an interesting story.

During the initial call I discovered that the member was retired and trying to break into acting. He explained how he had to go to all these auditions, 21,635 vehicle miles worth, while also incurring additional expenses such as office supplies, pictures, dues etc. He also told me that most of the expenses listed on the return were estimated, and there were no receipts. Any receipts that he did have had been lost in a flood. As we discussed his ten various acting jobs, some of which didn’t pay more than $46, I began to formulate a strategy. Based on the member’s income level, I knew he wouldn’t qualify for the “starving artist deduction,” which allows for an above the line deduction for “certain business expenses of performing artists.” In fact, these expenses were not actually unreimbursed employee expenses associated with any of the ten various employers, but rather job search expenses associated with the procurement of those 10 acting gigs.

I immediately got the member to start recreating his mileage log, obtaining third party verification, and digging up any receipts he could find to validate some of his expenses. I also asked him to put together a statement attesting to the loss of records with any specifics he could provide about the flood. Weekly phone calls to keep up the momentum finally paid off when on September 15, 2014, I was able to send out the response, and then again on November 10, 2014, when the IRS sent the letter 3581 announcing that they did not make any changes to the tax reported on the original return. We won the case, and the member was thrilled.

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

“Very satisfied” doesn’t say half of the gratitude I feel toward TaxAudit.com. The IRS made a mistake, and I was freaked out. Your people were solid and professional, and once I knew my IRS problems were in good hands I calmed down and got on with my life. The resolution was in my favor. I have engaged an accountant now, but I will still engage TaxAudit just in case! Thank you so much for everything.

Janice, Westlake, OH

 

My audit representative and her team made the process as easy and pleasant as could be. Learning that one is being audited is very stressful no matter how confident one is about the filing process. My audit representative was professional, courteous and friendly throughout the prolonged (on the IRS side) process. Her confidence was contagious! I hope that I will not need your assistance in the future but if I am I hope that my audit representative will be there to assist me. I am so glad I purchased Audit Defense and will continue to do so in the future. Thank you all. Happy Thanksgiving!

Shepard, Branford, CT

 

My audit representative provided timely status updates and was patient in explaining process for providing the additional records I needed. This was a great service when any dreaded IRS notice arrives.

Clarence, Las Vegas, NV

 

Anyone that receives a letter from the IRS can probably identify with the feeling of dread I felt. I had never received one before. I reached out to Tax Audit and they took care of me every step of the way. The process was smooth, understandable and thorough. I have had the service for years and will continue to use Tax Audit. It put my mind at ease and helped me deal with what could have been a serious situation! Go Tax Audit!!

Andrew, Liberty, SC

 

Having an audit can be a daunting task. However, with the support of TaxAudit, the process went smoothly and was resolved quickly. Best of all I owed no taxes!

Bill, New Braunfels, TX

 

I am very pleased with the services of Audit Defense. I have enrolled for about 5 years, and this is the first time I have needed their services. After receiving IRS notice in the mail that I owed money from tax return filed over two years ago, I was distraught. Then, I recalled I had signed up for Audit Defense and contacted them immediately. They walked me through documents they would need, and once I provided, they took it from there, and within a little over a week, they figured out stock sales had not been reported to the IRS properly by my banking institution, and in the end, I should be getting a small refund, vice paying several thousand dollars more to the IRS. I am 100% satisfied with Audit Defense, and this one incident sold me on protecting myself in the future with their services.

Jack, Southern Pines, NC

 

I would give the service I received a 5 star rating.

Daniel, Opa Locka, FL

 

You have made this experience bearable and less stressful. Don’t know what I would have done without your assistance. Exceptional professionalism and customer service.

Mary, Upper Marlboro, MD

Our 10 Million Dollar Tax Notice

Written by: Sherry Board, EA

This is an older case, but I wanted to share the story because I believe it is the largest dollar amount we have ever “saved” a member here at TaxAudit.com. It was August of 2006 when our member received a notice for a proposed balance due of $10.3 million. He had traded and sold precious metals and gems during the year, and there were hundreds of transactions. But when he prepared his tax return he reported all of the hundreds of transactions as a single line item on his Schedule D form instead of reporting each transaction individually. All of the items were listed on his broker statements, but he did not send the statements in with this tax return when he filed because he was unaware that this is what is required by the IRS when you combine multiple transactions into one line item on your tax return. The IRS could not match up what was reported to them by the brokers with what the member had entered on his tax return, and the computer-generated CP2000 notice for $10.3 million in unreported income was the result.

We spent hours working with the member and double-checking the excel spreadsheet he prepared with the hundreds of transactions from the broker statement. Finally, we came up with the correct amounts of securities sales and net proceeds. We submitted our response to the IRS in hopes of getting a favorable response. A month and a half later we received a recomputed notice with a balance due of approximately $6,700, which included penalty and interest.

The member was very thankful for our services. He sent us a huge box of Harry and David goodies that we enjoyed for months.

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

This was my first time actually using the audit defense though I have purchased it in the past. From the beginning, the staff at TaxAudit were extremely helpful. They let me know exactly what I needed to send them and how to acquire the documents I needed. Every question that I had was always answered in a manner that I understood, quickly and conveniently. I don’t plan on being audited again for a little while, but you can be sure that if I do, I know that I will have the people at TaxAudit to help me out. Thank you very much for all your help!!

Ryan, Middle Island, NY

 

I wish to thank TaxAudit.com for making this process smooth and as painless as possible.

Ivan, Lincoln, NE

 

Dung T was an amazing and calming advocate I would always want in my corner. TaxAudit.com gave me a stress free process I will recommend to friends and colleagues again and again.

Awam, New York, NY

 

I could not have made it through this ordeal without the kind and professional manner in which my audit representative assisted me. His knowledge as well as his patience were beyond my expectations. Thank you!

Carol, Millington, TN

 

Our audit rep was OUTSTANDING. He did a great job. Kept us informed and gave us peace of mind during the audit.

Cris, Temecula, CA

 

It was good to have an expert to deal with the IRS.

Arthur, Washington DC

 

My audit representative was terrific from start to finish. She really walked me through the process and made me feel like she was working for me to bring about a positive result. I would not hesitate to recommend Tax Audit service to my friends and family. I felt like I had a whole team of professionals working for me and all for such a reasonable fee. Thank you.

Donald, Brooklyn, NY

 

Never happy to see an IRS audit letter in the mail; but extremely happy to know that add-on to the Turbo Tax process was indeed a legitimate and value-added purchase. Will be sleeping better for many returns to come. Thank you!

Terry, Ennis, TX

 

This was my first experience, and the manner in which it was handled was outstanding. I will continue using TurboTax and purchasing the Tax Defense service as in the past.

Miro, Taylors, SC

 

It was like working through a problem with a friend instead of how the IRS makes you feel like a criminal. I highly recommend using the service. I have never received more one on one personal service from anyone even face to face. THANK YOU!!!

Robert, Union, OH

 

I wanted to cry when I got the letter from the IRS saying a owed a ton of money. But thanks to the team at tax audit, I got money back instead! Pleasant experience working with my coordinator and representative. I’ll always be a fan of TaxAudit.com

Anthony, Wappingers Falls, NY

This Month’s Champions

Written by: Donna Masciovecchio, Membership Services Manager

Here are the “core values” stories from the final group of Membership Services Representatives, Team Diamonds. Each shows a commitment to providing our members with the very best customer service available while treating them with empathy and respect during a very stressful situation.

April Arseneau

There have been so many times when I have gone above and beyond to make sure that the person I am helping receives everything I have to offer them. I do my best every day to provide a level of customer service that I would expect from a company. That is exactly how I think of it… What would I want from the person who is helping me on the phone?

I use the knowledge and skills that I have to provide the best customer service to every person I speak with, whether it is an external customer or an internal peer. So, with that being said…

Every day I try to be a champion, to commit, have empathy, to service, have respect, provide knowledge, and do it all with integrity.

Every day I am the best champion I can be for TaxAudit.com!!!

Tanya Turner

I always try to exercise empathy, respect, and integrity, not just at work but in everyday life. In August I received this feedback from a customer:

“She was very professional, courteous, and clearly explained the process to me. She is one of those rare people who have the ability to develop an immediate connection with people who are in a stressful situation. As a retired VP of a Fortune 500 company, I would hire her in a heartbeat − any company would be fortunate to have her in their workforce. I say this knowing that I have nothing to gain other that the satisfaction of recognizing superior service from her this morning − which just happens to be my birthday (guess this is the IRS’ idea of a birthday greeting.)”

I don’t agree that I am a “rare” person. I just simply believe in the saying, “Treat people how YOU want to be treated.” For me that means I treat others with compassion, respect, and FAIRNESS.

Keeping these traits and qualities in mind when dealing with customers, ANYONE, can be a “rare” individual.

Haley McClellan

TaxAudit.com is not only a company that provides a sigh of relief to our members by defending them against the IRS, but we are each individual champions at ensuring our members feel at peace and have a clear understanding that we are here to serve them. We all utilize strengths, such as COMMITMENT, RESPECT, and KNOWLEDGE, but for me this last tax season, my greatest accomplishment was implementing EMPATHY.

It’s important to me to step outside of my “box” and place myself in the member’s shoes, especially when answering questions like, “Do I have to talk to the IRS?” and “Should I be worried?” It’s easy for us to take for granted that we aren’t personally experiencing what the member is going through, but we should remember that they are calling us to bring us into their situation to be a part of the resolution.

One member I helped was in a huge panic, and just providing words of affirmation and compassion and ensuring that we are here to help by dealing with the IRS on her behalf was enough to make her feel much better. She responded to our survey with this comment:

“Thank you for what Haley and all you folks do. For those of us who honestly file a return and live in fear of being bullied by the IRS, Haley and the TaxAudit.com folks gave a new meaning to getting a good night sleep. God Bless You All.”

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

I could not be more happy and impressed with the service I received from Audit Defense from outset to completion, my Audit Representative was professional, reassuring, efficient, compassionate, timely and very patient.

Raafat, Nottingham, MD

 

Purchasing TaxAudit.com was a great decision and worth every penny! I will continue to buy it every year when I complete my tax return using TurboTax and have recommended it many times to my friends and coworkers. I am a CPA myself, but I don’t know if I would have had the expertise or experience to have successfully resolved my tax audit as well as my Audit Representative. He was a pleasure to work, responsive, diligent and extremely effective. Thank you TaxAudit.com!!

Richard, Duluth, GA

 

My audit representative was extremely patient with me and he provided a high level of expertise. He helped me to understand all the issues and guided me through the process in a way that was professional and straightforward.

Stephen, Hacienda Heights, CA

 

Great experience overall! I was very impressed with your website security, and it was easy to upload documents and communicate with my audit representative.

Ronald, Highland Village, TX

 

I had a great experience with TaxAudit. I will definitely continue to purchase it with my return each year and recommend it to my friends.

Chrystal, Escondido, CA

 

I used Turbo Tax and by a hunch I decided to purchase your IRS audit help, because I was uneasy about my return. Boy was I right, for the nominal price I paid for your protection, I have saved thousands of dollars, and the expense of hiring my own tax lawyer! Having your service certainly saved a few months of stress and sleepless nights. But most importantly, I did not have to deal with IRS officials! I would not leave home without it!

Jane, Tucson, AZ

 

I was extremely impressed and satisfied with all aspects of my experiences with Tax Audit. My audit representative was nothing short of a true professional and amiable person throughout the whole process. I would recommend your service to anyone. Thanks again for such a wonderful experience on what could be a difficult time for the normal person.

James, Brandon, FL

 

I’m very glad I signed up for this service. Although this was not a difficult situation, I would not have been able to handle it without Taxaudit.com.

Kenneth, Scottsdale, AZ

 

My audit representative was absolutely wonderful. From day one, I felt such a burden lifted since I have never been through an audit. She was professional, kind, friendly and eager to assist. She returned phone calls promptly, and when I was not available she left detailed messages…mostly not to worry…I would absolutely recommend tax audit, I hope all are as good as my audit representative. I will never file a return without purchasing this peace of mind protection…its a bargain….I hope I don’t need your services again but just in case I will be covered.

Richard, Colonia, NJ

 

My situation was somewhat complex. Throughout the audit, my team provided clear instructions and good guidance. I felt the team was always looking out for my best interests and were very good at working with the IRS.

Steven, Granite Bay, CA

 

Thank heaven for TaxAudit! It was such a comfort to have such efficient, competent, professional assistance. I will continue to purchase TaxAudit coverage every year.

Susan, Oxford, MS

 

The tax specialist that assisted me was tremendous! A+ Best in class performance all around. Thank you!

Charles, Cerritos, CA

 

Working with my audit representative was a pleasure. IRS notifications are scary to receive and my audit representative was reassuring and very knowledgeable in handling not only the process but effectively communicated to me on what was necessary to to be successful during the audit. Thank you for your help.

Joshua, Hoschton, GA

We Are Champions

Written by: Donna Masciovecchio, Membership Services Manager

Here are more stories about how our Membership Services Representatives put our company’s core values into practice each day as they work tirelessly to reduce our members’ anxiety during one of the most stressful experiences of their lives.

Joanna Michaelson

Commitment/Service

One of our Membership Services Reps had a frustrated member on the line. The member had received a notice for the 2012 tax year and thought he had purchased a 2012 Audit Defense membership, but he could not log into the website to view his memberships and find out for sure. He was getting more and more frustrated, and finally the MSR transferred the member over to me after trying to help him for close to thirty minutes.

After letting the member vent for a few minutes, I explained what I was going to do to help him. I did a search for more accounts and found that he had purchased memberships for all years dating back to 2005 − except 2007 and 2012. I provided him with his account number and waited for him to log into his account. He viewed his memberships but didn’t understand why he didn’t see his 2012 Audit Defense membership.

I said I would do some research with Intuit and let him know the results. He asked that I leave a detailed message because he usually was in class during the day. Then I explained the letter evaluation process, just in case he did not have a 2012 membership, and offered to send an email with more details. He was so appreciative that I had taken the time to help him log in and explain the process.

He said that he was okay with purchasing the letter evaluation, but wanted to make sure that all efforts were made to locate the 2012 membership if he had in fact purchased one. He thanked me again for explaining the process and taking the time to help him log into the website; he was happy that I hadn’t tried to get him off of the phone as fast as possible. He wanted assurances that I would not forget about him, and I let him know that I had already set a reminder to call him back the following day − whether or not I’d heard back from Inuit − just to let him know that I was still working on it. As it turned out, the member had not purchased the 2012 Audit Defense membership. As promised, I called and left a detailed message, and he did end up purchasing a letter evaluation in the end.

It was a stressful time for the member, and each step of the way I explained what I was going to do for him, and then I made good on my promises. This calmed him down every time.

Tina Barreiro

Empathy

Last year I was a champion by using Empathy to reassure our members that they won’t have to face the IRS alone. I let them know that I understand and we are there to help. This year there have been an unusually high number of scammers trying to take advantage of our members and falsely threatening them with jail or deportation, so empathy has been of particular importance.

When I get one of these calls, even though I know it is probably a scam, I can’t just tell the member that, but I make sure I let them know that I will get them to someone that can answer all their questions. I calm them down by letting them know that it is not common for the IRS to call and definitely not common that they would send an officer to arrest them. I make sure to explain that the IRS normally contacts people by mail and that they have a process that they follow and not to worry because everyone has the right to be represented.

At that point I usually hear a sigh of relief and know that I did what was right for the member. They feel better because they know we have experience and know that we will be there throughout the whole process. Here are one of our member’s words from the survey: “Extremely professional and calming. Made me feel the situation was under control.”

Brandi Reid

Strength of Character

I had a call in the call back queue for a member. I asked for her name when someone answered, and the member came on the line. The call disconnected after she said only a few words.

Since the call came from the automatic call back queue, I had no information about the person I spoke with. I went to Ezra, our Lead of the Day, and asked if there was any way he could retrieve her information so I could call her back. It took him a little while to research it, but after about twenty minutes he emailed me her info and I called her back. She was surprised and pleased that I had made the effort to find and contact her.

Knowledge: Never Stop Learning

Recently I completed a California Tax Education Council Qualifying Tax Education Course so that I can be more knowledgeable when speaking with 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.

Absolutely superior response, highest professional service, communication, and results. I will continue annual renewal of this service and highly recommend it to everyone using TurboTax.

Bruce, Abbeville, SC

 

After having gone through an intense IRS audit, I can imagine going it alone. I have had TaxAudit as my fallback since 2009, and will never be without them. There aren’t words to express how grateful I am to the team that handled my ’10 & ’11 audit. Fantastic…and we could sleep at night throughout the process knowing we were being well represented.

Gary, Edgewood, KY

 

My audit representative was very helpful and asked all the right questions that got us to a fully satisfactory resolution of my problem. Saved me from a huge tax bill due to an IRS error. He knew just how to document the case so that it went away. Ultimate bill was $0 :-)

Glenn, Annapolis, MD

 

My audit representative is a consummate professional who, from the very beginning of the case, allayed my fears of responding to the IRS. She made the process almost effortless and was always there for me. I would recommend your TaxAudit service, and already have, to my friends and family. The value of your service and peace of mind that you offer outweigh the modest fee. More importantly, it is reassuring to know that technical issues are being handled by a pro. Thank you. Thank you. Thank you.

Marvin, Glendale, NY

 

I appreciate everything my audit representative did for me throughout this entire process. He explained everything thoroughly and can certainly speak the language to the IRS to resolve my issue in a timely manner. I highly recommend my audit representative, he is certainly an asset to your company. Thanks Tax Audit.

John, Metairie, LA

 

I plan to keep Tax Audit for all my returns and to recommend it to others. I was surprised and a bit scared when I got a notice in 2014 that the Commonwealth of Virginia said I owed additional money for 2010. It had been a complicated filing with returns in both Indiana and Virginia. With one call to Tax Audit, I was reassured. They handled everything and kept me informed every step of the way. Not only did the audit show that I didn’t owe VA money; it showed they owed me money. Having Tax Audit allowed me to be comfortable that my interests would be looked after. Without Tax Audit, I would have just been afraid and would have paid the amount of money requested, thinking I had made a mistake on my return. This saved me hundreds of dollars.

Alice, Winchester, VA

 

I was very pleased with the prompt service from beginning to end of case. I felt at ease knowing my case was handled by such a professional. I’d highly recommend this service. Thank you.

Jacqueline, Windsor Mill, MD

 

Our tax rep. was extremely professional in all interactions and he was very prompt in getting back to us when we had questions. I would have to say that from day one we felt comfortable with his level of expertise, his guidance and knowledge, and very supported throughout the whole auditing process. Really, we could not have better service than that we received. We often spoke of how lucky we were to get him as a tax audit helper. I would say, given the stress level that we imagine most folks go through when audited by the IRS, that it would be hard to find an auditor who could ease a clients mind and at the same time be open/honest and matter of fact as our tax rep. was.

John, Santa Rosa, CA

 

We could not have been happier with the service and results. It gave us a great amount of peace of mind knowing we had someone who knew the ropes. I will not be without this service.

John, Virginia Beach, VA

 

We were so worried about this audit but the “team” at TaxAudit made it so much easy for us. Our audit representative was outstanding!! He was thorough, knowledgeable, answered our questions quickly, took our phone calls when we were worried, and made the process as painless as it could have been. I just hope if we have another audit, we can have him help us again!! Thank you for having such qualified people for helping folks like us.

Barbara, Galveston, TX

 

When I found that I was being audited, I tried to log on to your website but was unable to do so. I sent an email stating that I was being audited and needed to log on. I figured that you would get back to me in a day or so. Within 5 minutes someone was calling me and giving me the necessary information I needed to get started. I was so relieved. Everyone I worked with was so helpful. Thank you for all your help.

Gregory, Elkhorn City, KY

We Are Tireless Advocates

Written by: Donna Masciovecchio, Membership Services Manager

I asked the members of my team to tell a story about how they put our core values into practice each day in order to relieve our members from having to face one of life’s most intense emotional nightmares. Here’s what The Rubies Team − Ezra White, Sheri Williams, Anthony Webber and Karisa Roraback − had to say:

Ezra White

We are sensitive, compassionate and concerned. We are tireless advocates.

My oldest daughter has some medical issues that we have had to deal with her entire life. My wife and I have spoken to dozens of insurance representatives from different programs and hospitals. There is always one constant: this is our child’s life we are dealing with.

When members call the Membership Service Department, they have received a letter from the IRS. It is the worst nightmare of many people. The IRS is scary to most people. People are unsure of what they can do or what the letter even means. That’s where we step in.

I try to remember what it is like calling a medical insurance company to speak about my daughter’s coverage. When we make those calls, it is always the most important thing in our lives. When a member calls us to report that they have received a letter, they are imagining the worst possibilities and it is the most important thing in their lives.

I make sure they understand what I am saying. I don’t need to use fancy language. I don’t need to use abbreviations. I don’t need to tell them how I am right and they are wrong. I don’t care if they get my name right. I want to make sure they feel better and know what they need to do to when we are done with the call. I want them to know that we will do everything we can to help them. These people have spouses and children and jobs to worry about. To many people, a letter from the IRS threatens their very lives.

Sheri Williams

Empathy

When working with members I try to make sure I show that I understand how they are feeling. I find that a member wants their feelings acknowledged and understood. They don’t want to be talked down to, made to feel like a child or rushed to feel like they are just another member. They have a lot going through their minds when they make that call to us, and I try to make sure I treat them as I would want to be treated if I were in their shoes. I make sure that I don’t just let them talk but I listen and acknowledge their concerns. I think when a member feels cared about they are more inclined to work with us and get us what we need so that we can help them with their issue.

Anthony Webber

Empathy

Being empathetic is the first step towards providing a customer with the best experience possible and is arguably the most important aspect of the whole process, especially when dealing with situations in which the customer might be fearful or scared.

One example of this from my own experiences would be a case in which a member called to report an IRS notice, having never been audited before in his 50 years of filing taxes. He hadn’t been worried about receiving a letter since he had never received one before and said that he purchased audit defense while filing his return just because it was offered to him. When he called, he had no idea what might have triggered the notice and felt completely blindsided by it without any idea where to begin. I explained to the member that not only would we be able to shine light on exactly what triggered the notice so that he wouldn’t feel like he is in the dark, but that we would also defend him, standing between him and the IRS so that he isn’t alone in his endeavor. And while the member was worried about the IRS, he was more concerned with his wife’s reaction to the notice. The member told me that he is retired now while his wife still works for a famous museum, so his main job is to take care of their taxes. He explained to me that the last thing that he wanted was for his wife to find out that he had made a mistake on their return and think less of him for it. I told him that mistakes happen and everyone makes them, that it might not have even been his fault, but that we are on his side and won’t let him feel like the IRS is bullying him into paying what he doesn’t owe. By the end of the call, the member sounded more cheerful, stating that he was very happy with our service and was so glad he had purchased the memberships and would continue to do so in the future because we had made a loyal customer out of him.

Karisa Roraback

Empathy, Service, Respect

One of the things I like most about this job is that I can help ease someone’s worries in just a few minutes. Just a couple of weeks ago a member called me very worried about the notice that she received from the IRS. She had never received a notice or used our service before and thought that she would have to battle with the IRS by herself. I explained our process to her and told her that we would handle all correspondence with the IRS for her. She was so grateful and I was glad to have been able to calm her worries. She thanked me for being patient and understanding and said that she knew her experience with us was going to be a good one.

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

It was an enjoyable experience working with such qualified and professional representatives.

John, Albion, IN

 

My audit representative provided exceptional assistance, guidance and education to me in the audit process. He has worked with me through three audits. Because of his expertise and professional knowledge, we received refunds instead of having to pay taxes. I estimate that our audit representative has saved us more than $30,000.00. Thank you.

Connie, Fitzgerald, GA

 

Absolutely stellar experience. Thank you!

Mark, Weatherford, TX

 

I am extremely satisfied with your services. The representative who worked on my case is outstanding. You have saved me time, frustrations and money. Thank you so much.

Abdourahmane, Cheektowaga, NY

 

Some of the best money I’ve ever spent, signing up for this audit coverage. It took a huge load off my mind knowing that an experienced tax professional was dealing with the IRS and knew how to work thru the process. All I had to do was gather up my documents and uploaded them.

Charles, Mountlake Terrace, WA

 

The money I pay yearly for this service when filing my taxes is worth every penny. I will never go without the security it offers. The professional who helped me was knowledgeable, courteous and efficient. There is no doubt that without this service I would have paid (erroneously) almost $2000 more to the IRS due a mistake made by a bank.

Jolene, Carrollton, TX

 

This was a pleasure – which is a real deal because no one wants to be involved with an IRS inquiry! I am so glad I purchased your services through TurboTax!

Irene, Columbia, MD

 

Tax Audit offered a great customer experience. The time and stress you saved me was very much appreciated. I will definitely subscribe to this service again next year.

Matthew, London, ON CAN

 

Loved the professionalism and speed. Will highly recommend to everyone!

Gary, Honolulu, HI

 

I was very happy with the way the TurboTax audit protection service worked out. It worked great and I am extremely happy with the support that was provided.

Robert, Phoenix, AZ

Ignoring a Court Order

Written by: Darin C. James, Esq.

It’s not often that a taxpayer can disregard a court order, but a recent audit showed one of those rare instances. The IRS audited our members on the issue of the four dependents claimed on their tax return. Our members had claimed their divorced daughter and her three children, who had lived with them for the entire year.

We sent the IRS documents proving the relationship and residence of the dependents, along with the expenses our members paid to support the extended family. Surprisingly, the examiner disallowed all four of the dependents. The explanation in the examiner’s report said that another taxpayer had claimed the same dependents. The examiner also asked for a complete copy of the daughter’s divorce order. Our members then told me that their daughter’s ex-husband must have claimed his two children. We had a copy of the court order that granted the daughter’s divorce, but not the written agreement that accompanied it.

I wrote to the examiner arguing that the children could only be claimed by the parent or grandparents with whom they lived the majority of the year, unless the custodial parent had signed a release. Our members said their daughter had not signed a release to allow the noncustodial father to claim his children as dependents. The daughter had no income and did not file a tax return. Therefore, the “tie-breaker rules” would allow the grandparents to claim the children, because the mother did not claim them, and the grandparents’ income was higher than the mother’s.

The examiner was not persuaded, and still disallowed all of the dependents. After our members received a Notice of Deficiency, we filed a petition in the U.S. Tax Court. I later discussed the case with an Appeals Officer, who offered to allow two of the dependent exemptions for the daughter and third grandchild (who was not from the daughter’s marriage). The Appeals Officer said that since the daughter’s complete divorce order was not provided, she assumed that it allowed the father to claim his two children.

Our members obtained a copy of their daughter’s entire divorce order and sent it to us. The order incorporated this written agreement between the parents: “(Father) shall be entitled to claim both minor children on his state and federal income tax returns every calendar year. If (Mother) qualifies for an exemption due to her income increasing, the parties agree to each claim one….” The agreement was signed by both parents and approved by the judge.

We sent the divorce order to the Appeals Officer. I argued that the order should not control the case because the daughter did not sign IRS Form 8332 releasing the exemptions for the children. The Appeals Officer disagreed. She said that when both parents have signed an unconditional stipulation, they consider the stipulation to be the equivalent of the required declaration in the form. She asked me to send her whatever legal authority we had to support the taxpayers’ position.

Between divorced parents, the general rule is that a child can be claimed as a dependent by the parent with whom the child lived the longest during the year. Internal Revenue Code §152(e) creates an exception to this rule by permitting a noncustodial parent to claim the dependency exemption if certain requirements are met. However, this section only applies “if a child receives over one-half of the child’s support during the calendar year from the child’s parents.” Our members had a report showing that the children’s father had paid only a very small amount of child support that year. The children’s mother had no income, so the grandparents provided most of the support.

In George v. Commissioner [1], the Tax Court held “If a third party (not the child or her parents) provides most of a child’s support, then – notwithstanding a purported release by the custodial parent under section 152(e) – a noncustodial parent could not claim her as a dependent.” In another recent case, Shenk v. Commissioner [2], the Tax Court held that even though a noncustodial parent may be entitled to a disputed dependency exemption as far as a state court is concerned, “ultimately it is the Internal Revenue Code and not State court orders that determine one’s eligibility to claim a deduction for Federal income tax purposes.”

I wrote to the Appeals Officer again, citing the case law and applicable sections of the code. The IRS finally agreed that that the divorce order did not control, because the order conflicted with the Internal Revenue Code. Our members were allowed all of the dependents claimed, and were very happy to owe no additional tax.

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

Every member of my team was outstanding. My audit representative helped me so much and he fought for me. He was able to help me through the audit and was able to do so much more than I expected. I am completely happy with the outcome. I couldn’t be more pleased. I couldn’t recommend my audit representative enough. He has my complete confidence. Please use my comments to market your outstanding service and please, tell people to check the Tax Defense Box. It will be the best thing they ever did. Tax Audit.com is an outstanding service for taxpayers facing audits.

Diane, Somerville, MA

 

Extremely helpful and professional.

David, Madison, GA

 

I am glad that I had TaxAudit by my side as it is difficult to deal with the IRS by oneself.

Clifford, Leesville, TX

 

I thought this would be a rough and bumpy ride but it was quite the opposite. My audit representative assured me of support and getting this worked out smoothly and that’s exactly what she did. I love to see companies that I do business with have solid employers that have a passion and love what they do. Thanks again.

Artis, Houston, TX

 

I want to thank your whole team for all assistance in this matter. Hopefully I will not have to worry about this matter again. I have been a user of your audit protection off and now for many years and after this event I will use it every year. By the way I have and will continue recommending your service to friends and family. Thanks again.

Michael, Utica, MI

 

I was happy because the assistance I received was received in a timely manner and clearly explained. I felt I was respected and not looked down upon because of my lack of knowledge.

Jack, Kennewick, WA

 

I was impressed with the fact that commitments were met on time. I felt that the investigator was truly interested in my problem and her review and recommendations were very helpful.

Louis, Oracle, AZ

 

I would like to take this opportunity and personally thank my audit representative for her professionalism and patience in my case. She was always on top of things and is very experienced in dealing with the IRS. Needless to say that she closed the case to my complete satisfaction. All I can add is: Mission accomplished, Well done!

Tilman, Las Vegas, NV

 

Letters from the IRS demanding money are extremely anxiety-provoking. My audit representative was very good at reducing the anxiety with her calm, thorough approach to resolving the issue. Kudos to her and TaxAudit.com!

David, Pataskala, OH

 

The assistance was excellent.

Ernest, Pawleys Island, SC

 

The timely response was really valuable as I was just on my way to a vacation when I had to start the process. They were effective at guiding me to get them what they need to address the matter while I was on travel. They were effective at explaining to me things I had not understood earlier. They were helpful at guiding me through the steps and setting my expectations. I was pleasantly surprised by an extra tax refund when all was said and done. She definitely looked out for me.

James, Fairfax, VA

 

[1] George v. Commissioner, 139 T.C. 19, CCH Dec.59,291 (2012)
[2] Shenk v. Commissioner, 140 T.C. 10, CCH Dec.59,528 (2013)

A Little Perseverance Pays Off!

Written by: Ame Galloway, EA

I just worked a challenging case involving a discrimination lawsuit settlement that one of our members received as a former employee. The IRS examiner insisted that self-employment tax should be assessed, and it was not easy to convince her to change her mind.

During our first contact I explained that the member had not been self-employed, but had been a former employee of the company against which she had filed an Equal Employment Opportunity Commission (EEOC) discrimination claim. The employer had agreed to pay her $10K if she would drop her charges. The member accepted the terms and was issued a 1099-MISC tax form for the income. It was listed in the “nonemployee compensation” section of the form, and it was because of this that the examiner maintained that it must be subject to self-employment tax.

Unable to convince the IRS agent, I regrouped. I reviewed the Audit Technique Guide (ATG) for legal settlements and prepared for another round. I contacted her again and explained that since the taxpayer had been an employee she should not be responsible for the self-employment tax. In order to change the outcome of the audit she said the member would have to get a corrected 1099-MISC from the former employer. I explained that the member had already tried to get the form corrected, but no one from the company would return her phone calls.

I referred the examiner to page sixteen of the ATG, which states that unless a taxpayer is self-employed they should not be subjected to self-employment tax. I cited the tax court cases that were mentioned in the guide as well. Still not persuaded, the agent proposed that we petition the tax court if we didn’t agree. I told her I was hoping to settle this matter quickly without going through that process. At this point we were stuck.

As a last resort, I contacted the examiner’s manager and was able to explain how I had arrived at the conclusion that the member’s income should not be subject to self-employment tax. Again, I cited the ATG and tax court cases. She said she was willing to consider my position. She would review the case and call me back.

The next day the original examiner called me back. She agreed to correct the exam report, which reduced our member’s tax bill by over $1,200 and allowed us to avoid the lengthy petition process. A little perseverance paid off!

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

I can honestly say that my expectations were met and exceeded with this experience! I often believed TaxAudit was the right way to go and now I’m confident it is the “only” way to go!

Aaron, Mission Viejo, CA

 

I didn’t know it would be so easy and a lot of the stress I was feeling went away. I am very happy and satisfied with the service TaxAudit.com gave me. I will definitely be buying audit protection for years to come from TaxAudit.com.

Jaclyn, San Diego, CA

 

I have no complaints whatsoever. Your representatives were very professional and polite each time we spoke. If I ever have a similar problem in the future I sincerely hope that I can speak with the same person who worked with me on these recent issues.

Elmer, Mayo, FL

 

I knew dealing with the IRS was going to be the a very stressful experience. I have always paid the extra $ to have the Tax Audit services when doing my Turbo Tax return and it paid off this year saving me almost $800 which the IRS was erroneously charging me.

Danny, Eugene, OR

 

I was very pleased with my service. I will highly recommend you to anyone who asks and anticipate retaining your services every year.

Donald, Fort Worth, TX

 

IRS audits are inherently very stressful, even when I had all of my support documents. My representative was extremely knowledgeable, walking me through each step and providing the “professional firewall” between me and the auditor. My audit representative put me at ease and helped me feel more confident about the probable outcome.

Susan, Grand Junction, CO

 

My audit representative was incredibly helpful and knowledgeable. He walked me through step by step on what to expect making what could have easily been one of the worst experiences in my life almost a breeze. The fact that I never even had one single conversation with the IRS, because my audit representative handled everything for me, amazes me! My audit representative not only answered every question and concern I had, but also gave me sense of comfort that he was here for me going through this ordeal with me. I know for a fact without the help of him this would have turned out much different. My friend was audited years ago and still to this day is having to deal with the IRS and is completely miserable. My experience has been the complete opposite! Please let my audit representative know he is much appreciated!

Theresa, North Charleston, SC

 

Receiving a tax audit notification was rather unnerving. My audit representative provided excellent guidance in gathering the requisite documents and invaluable assistance in resolving the issue, resulting in a “no change” decision from the IRS. One of the best investments I’ve ever made (both money and peace of mind).

Mark, San Antonio, TX

 

Very pleased with my TaxAudit representation during a stressful audit.

William, Wilmington, DE

Organization Matters: Tax Audits Require Precision

Written by: Sondra Cates, EA

“You mean the case is closed with a zero balance due?” Tan asked.

“Yes,” the IRS examiner said.

Tan was pleasantly surprised. Even though he had sent in a well-organized response for our member, there had been documents missing from the package and not all of the deductions had been supported. The member had moved and lost some of the items and he had been unable to retrieve them from third parties within the time-frame allotted by the IRS.

The examiner had called Tan to let him know that she was closing the case with no changes or adjustments. She explained that the response package he had sent in had made her job easy. Even though the documents provided did not fully support the amounts claimed on the member’s return, she said she had closed the case because they were so well identified and organized that it had saved the government time and money. She praised him for doing such good job and said she wished all correspondences she received were organized in that same way.

While our audit defense service does not include bookkeeping, Tan had worked diligently with the member to provide a response package that was easy for the examiner to understand. He had guided the member in gathering the necessary documents to support his medical and dental expenses, gifts to charities, and employee expenses, providing him with formats for organizing them and creating spreadsheets. Tan had taken the extra time to ensure that there was cross referencing from the spreadsheets to the documents to make it easier for the examiner to locate each receipt.

All of their hard work paid off. The case was closed that day and the examiner told Tan he could let the member know. Of course, the member was thrilled by the result of his audit!

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

At first I was very leary after receiving the notice from IRS, but after the process was complete, I was happy I purchased the protection plan and feel confident all is well.

Ozzie, Mesquite, TX

 

My audit representative did an excellent job in handling our audit. We will highly recommend TaxAudit in the future and are very grateful to have had this service.

Gretchen, Salem, OR

 

Every year I sign up for this service as a precaution “just in case” when I file my taxes. This the 1st time I used the service in all the years of signing up, and I tell you still a great investment. Thanks a lot for your help and support with this. My audit representative gave me all senses of security that that audit letter took away… great job, really thankful!

Ahmed, Brooklyn, NY

 

Excellent service. It made the inconvenience of tax inquiry/audit no hassle at all!

Joshua, Denver, CO

 

I appreciated the engagement & support driving a resolution with the IRS in a timely manner & with an outcome that was in line with what was explained to me and what I expected. Thank you!

Bruce, Lakeville, MN

 

I have used this service for more than ten years and never needed it. The one time I did paid for itself ten-fold. This is the greatest value service I have ever purchased, hands down! My audit representative left me with a feeling of calm and confidence during an experience for most that has been described as been as traumatic as the loss of a loved one. I never experienced any such trauma, thanks to my audit representative’s, professional, and confident demeanor. He was a professional throughout the seven month ordeal. What could have become a major disruption to our lives was actually transformed into a learning experience, for which we are all the better. Thank you.

Clarence, Rowlett, TX

 

I love it! Easy and convenient!

Kiyana, Pittsburg, CA

 

I was very satisfied. If I had not had TaxAudit.com I would have thought the IRS was correct and sent the $4800.00 they told me I owed. Thank you

Kerry, Land O Lakes, FL

 

If I could give this service a higher grade than very satisfied I would. I am so thankful for all the help and work that my audit representative did that I can’t thank you all enough. His service was professional, courteous and very prompt. It even ended up that the IRS owed US money. Now that’s a good outcome! Thank you all and especially my audit representative for this gold star service.

Thomas, Charleston, WV

 

It was very easy and stress free.

Victor, Killeen, TX

 

My tax audit representative was incredible. I went into the process scared and confused. He put me at ease. I was extraordinary impressed by his knowledge of the tax law, patience, professionalism, and service. All the above I would rate top box, and will tell family and friends. Because of his service I was able to get a fair resolution with the IRS. Thank you for your support!

Maurice, Menlo Park, CA

 

This is the second time I have used your service and it is easy, efficient and very professional. I would not hesitate to refer your service to others. I have great piece of mind with your service. It is of great value!

Ginger, Livingston, MT

The Tax Implications of Winning

Written by: Ame Galloway, EA

Winning is nice, but most prizes come with a price – from a tax standpoint, that is. At least this was the case for our member, an avid bass fisherman from Northern California.

The member and his buddy had won first place in a fishing tournament, and their prize was a certificate for a boat. The trouble came when the IRS sent him a letter contending that he had not included the value of the prize on his tax return.

When I spoke with the member he told me that he had, in fact, reported the prize winnings. I reviewed his return and did find the entry for “other income,” but the problem was that it just didn’t match what the IRS said it should be.

The member told me that in the bass fishing world it is not uncommon to receive a certificate like this, which has an expiration date, and post it on a forum for interested parties to buy. This is what he and his buddy did, but they were unsuccessful in their efforts to sell the certificate. With the expiration date fast approaching, his buddy offered to buy out the other half of the certificate for $9k. The member took the money and reported the actual amount he received − instead of the amount reported to him on the 1099-MISC form − as “other income.”

I thought I would get some feedback from the other audit reps so I sent out an email asking if anyone knew how the bass fishing world worked and if they had run across this before. Their responses confirmed what I had been thinking: if I could prove the FMV of the prize I could get a “no change” on this audit.

The taxpayer sent me the printout from all the tournaments he had received any winnings from along with the copy of the check his buddy had given him for his half of the new boat certificate. Since this was the amount a willing buyer was willing to pay a willing seller, it was the true fair market value.

I submitted our response to the IRS and was successful in getting the “no change” I was expecting. The member was happy with the outcome and now understands the importance of documenting the FMV of prizes won, having learned first-hand how they can be reported at an inflated value.

Even though there may be tax implications involved in some types of winning, it’s still better to win than not to win. Winning this audit case was a lot of fun, and, happily, my feeling of victory is one prize the IRS can’t tax!

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

Amazing experience. Painless, and a fantastic result. The IRS requested 22K, with your help I got an $800 return. Thank you again!

Gregory, Fairfield, CT

 

My audit representatives were extremely professional in how they represented me and my issues with the IRS. In fact, the IRS were the ones who are totally unprofessional. I already have told many people if they use TurboTax to pay for the TaxAudit team!

Frank, Spartanburg, SC

 

My audit rep was fantastic. He always worked with me to make sure I remembered all the different things I needed to upload to meet all the deadlines. This was my second audit in 3 years, both times I used your services, and have been totally pleased each time. I have signed up again for this year through TurboTax. Thanks, and keep us the great work.

Edward, Houston, TX

 

Great people who are very honest and timely in their work. Thank you!

Scott, Pleasanton, CA

 

I always sign up w/ TaxAudit when I use TurboTax. It reassures me that I have some resource if I have problems.

Jody, Spring Hill, KS

 

I am a walking, talking advertisement for TaxAudit. This is the second time I’ve had an IRS issue and your services are worth much more than the cost. Thanks to TaxAudit and your professional staff for making my life much easier.

Deborah, Woodland, CA

 

I am really grateful for the good professional help I received. Glad that I spent the small fee to have TaxAudit in my corner and will most definitely use their service every year. I had to hire a tax rep. once and it started at $1500.00. TaxAudit was worth every penny and was a world apart on the fee. That and just knowing if something does happen they are there if I ever need them again. Thank You!!!

John, Westminster, MD

 

I am thrilled that I made the smart move to include TaxAudit protection with my annual tax filing.

John, Davidsonville, MD

 

I will ALWAYS pay extra for that “just in case audit”. I would never have known what to do without them. Well worth the cost for that peace if mind it gives.

Rebecca, Ekron, KY

 

I will definitely purchase this option with each use of TurboTax. My audit representative made the whole process simple. I could not have handled this on my own. Great work!!!

Gary, Fort Worth, TX

 

Thanks for your assistance. I will always use and recommend the audit defense team.

William, Colorado Springs, CO

 

The process was smooth and ended with a positive result. I couldn’t have been happier with the value of the services I received for the small up-front cost of Audit Defense.

T S, Port Angeles, WA

 

When I contacted “Tax Audit” that I had an IRS notice for Audit, I was astonished by the response within a couple hours. My audit coordinator then contacted me by phone, explained the procedure, and within one day my personal representative was appointed and had also contacted me by phone within hours. Amazing. My audit represent then told me what he needed, and continued to keep in contact with additional records needed and put together a complete package up until the day of the audit. I was always kept apprised of any developments and resolution of the audit. Best personal service I have ever received from any service agency in any field. Thanks a zillion.

Thomas, Pickerington, OH

At the Movies

Written by: Chuck Long

We often hear stories about IRS examiners being unreasonable and difficult to deal with, but in my experience that’s not always how it goes. Here’s a story about an IRS agent who showed compassion for a taxpayer’s plight.

The case was assigned to me in late July. Our member was an octogenarian who lived alone. He’d invested almost the entire contents of his 401K − over $50,000 − into unregistered securities. The securities were movie production investments which were structured as loans with “back end” participation if the movie made money. The investment instruments were not publicly traded and were illiquid, so trying to sell them would be pretty difficult. The companies who sold these investments targeted retired persons at home watching TV during the daytime.

Our member had liquidated almost his entire 401K and rolled it over to an alternative investment IRA custodian to hold these “private placement” investments. During the period from 2004 to 2006, the taxpayer made investments in these products even though he did not meet the investment qualifications ($1,000,000 net worth and $100,000 liquid capital). In addition, he never received an interest payment or any other return on his investment. In October of 2010, he received a notification from the custodian that they were finally able to get a valuation from the issuer (as of 12/31/2009). Soon thereafter, the taxpayer was informed that the custodian was resigning and that he had to find a new one. The member ignored the letter. He determined he would never see any return and didn’t hear back from the custodian until in 2012 when they sent him a 1099-R showing the valuation as of December 31, 2009, as a taxable distribution amount.

The taxpayer, figuring the investments were worthless, did not show the distribution on his 2011 tax return. In late May of 2013, he received an AUR notice regarding the taxable distribution and a bill for $9,205. We responded to the notice by providing information about the different entities that he had invested in and articles describing them as a “scam.”

The IRS did not agree, and on October 3, 2013, the agency issued a Statutory Notice of Deficiency. Since the taxpayer’s documents were spotty, it did not seem to warrant filing an appeal, but we agreed to make another submission on his behalf. Rather than relying solely on documentation we’d submitted, we explained the situation in detail, hoping the IRS would understand. The available court cases for similar matters were not in our members’ favor, but I kept a positive attitude.

I contacted the IRS on December 27, 2013, and the agent said a stall letter had been issued earlier in the month. She would put in an action item for the examiner to call me.

The examiner called and said she was sympathetic to the taxpayer’s plight. If I could send her proof that there had been legal action against the principles of the companies, she would take that into consideration. I faxed over a copy of the Cease and Desist order from the State of Washington. After she reviewed it, she called back and said she had cleared the case and they would not make any changes to the taxpayer’s return.

We were thrilled. We were successful and we had another happy member!

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

A very inexpensive service that is there if you ever need it. It was so nice to have a professional deal with the IRS!

Jimmy, Lexington, GA

 

Due to family health issues of the last several years, I found the services and guidance from TaxAudit.com extremely helpful in the handling of my 3 years of audits. If I had to do it again, I would definitely use Tax Audit resources again.

R Stephen, Lincoln, CA

 

Excellent value…So glad to have you here when I needed your help.

Ron, Hampton, VA

 

Getting a notice from the IRS can make anyone nervous and apprehensive, but remembering I had purchased the service that apprehension dissipated the moment I spoke to TaxAudit.com. I am so glad I made the choice to purchase TaxAudit and have with every filing I have done since 2010. I am extremely confident I have someone on my side to keep the IRS at arms length. Thank you for your service. It has paid for itself 100 fold.

Robert, Romeoville, IL

 

I greatly appreciate the efficiency in which Tax Audit handled an experience that is totally overwhelming to the average person. I am a customer for life.

Geoffrey, Redmond, OR