Tax Audit Stories

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…
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…
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…
A few months ago I received a “Check the Box” audit for a married couple living in one of California’s most famous wine regions. The IRS was questioning the large mortgage interest expense deduction on their Schedule A. The members lived on a ten acre lot where their…
In August, I was assigned a case that was different from any other case I have ever worked. It was challenging in the way a serious jigsaw puzzling is challenging, and it required the same type of patience and commitment. The IRS had sent out a soft notice in July…
Often when assigned new cases, we find members who have made what initially appear to be insignificant errors and end up owing substantial amounts of tax. These errors are sometimes due to procrastination, misstatement, or incomplete understanding of the tax law, and the amounts owed can be staggering. Our member…
Most clients find out they have been the victim of return identity theft when they receive a notice from the IRS or a charge from a credit card company, but in a recent case one client found out he’d been the victim of identity theft when he got a check…
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…
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…
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…
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…
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…
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,…
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…
“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…
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