Tax Audit Stories

As a Membership Services Representative at TaxAudit.com, I have the opportunity every day to make a difference in the lives of our members. Today was one such day where I felt the immediate satisfaction of providing our Core Value of Service to a member in need.
Through my continued determination on my client’s case, combined with my member’s patience, TaxAudit.com was able to finally correct the IRS’s uncompromising stance. This was an important reminder that all taxpayers are allowed, by law, to exercise their Taxpayer Rights – including the “Right to Quality Service” and the “Right to Challenge the IRS’s Position and Be Heard” while undergoing a tax audit from the IRS.
Our Audit Coordinators, or ACs, are the first assigned associates on a case when it is opened, and are there to help our members have a smooth experience sending in their initial documents.
While I have worked on many cases over the years, there is one case in particular that stands out to me – one that I believe is worth sharing. Our valued members received an initial notice stating their moving expense was being disallowed.
This was the best ending for someone who had done such a good deed for a family member. Here at TaxAudit.com, we get to make a difference in the lives of our members every single day, and I am so grateful to have had the opportunity to play a role in this particular member’s success and to help provide peace of mind to a man who was so deserving of it.
At this time, I explained to our member that self-directed IRA custodians have a fiduciary responsibility to issue an annual report to the IRS and provide the value of the IRA so that, when the RMD starts, the taxpayer knows how much to withdraw. I then asked the member to grant me Power of Attorney for all open tax years so I could review the 5498’s.
Frustrated by their continual lack of response, I filled out a Form 911 and sent it to the Taxpayer Advocate Service. It was only a short week later when I received a voicemail, informing me that a taxpayer advocate had been assigned to the case. Upon explaining the situation to our advocate, she stated she was shocked to hear how the case had been handled. She could not believe that the IRS transferred the case to another unit and then closed and swept it under the rug.
One of the first cases I was assigned after joining TaxAudit.com involved a member who had received an IRS CP2000 notice for unreported taxable retirement income. I sent out my first response to the notice in the middle of September 2015. The answer I received back from the IRS Automated Under Reporter (AUR) department achieved part of the desired result, but not all of the results I expected.
While our Audit Reps are the champions of our members, the ADAs are considered by many to be the champions of our Audit Reps. If one compared our Audit Reps to Batman, Frodo Baggins, or Sherlock Holmes, then our Audit Department Assistants match the likes of Robin, Samwise Gamgee, and Dr. Watson. They might not always be on the frontlines, but our ADAs truly enhance the level of service our members enjoy.
I received a case for a 2012 Schedule A correspondence audit. When I called the members, the wife answered and told me that her husband was the one that prepared the return, and usually handles all the tax matters, but she was going to be the primary contact because…
Whenever several people are put together in a group situation, either by birth, choice or work, certain roles emerge. These roles are then chosen or sometimes even imposed upon the different individuals within the group. There are the leaders, caretakers, sages, “worker bees,” and organizers, just to name a…
The following case took eight months to successfully complete, and spanned two continents. The member, who had moved to Europe in 2004 and lived in Switzerland, was being audited for the Foreign Tax Credit and Foreign Earned Income Exclusion by the Cincinnati office of the IRS for tax year 2012.…
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…
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…
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…
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…
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.…
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…
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…
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…
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