January 01, 2010 | Written by: Mark D. Olander, EA, USTCP
For some people, sleepless nights go hand in hand with being audited by the IRS. This month’s case shows how a caring representative can help make the audit process a little less stressful, especially for anxious types.
The member received a bill from the IRS for more than $2,000, which included a ten-percent early withdrawal penalty on a retirement plan distribution. The IRS had rejected the member’s claim of being allowed to withdraw the funds penalty-free as a result of being disabled.
The Audit Representative assigned to the case quickly determined that the member had made a mistake on his tax return. He was not disabled, but he had entered the wrong code on the distribution form when he added it to his tax return. An interview with the member revealed that he was not subject to the ten-percent penalty because he was a retired police officer over the age of fifty whose pension income was being distributed to him after separation from service as a series of substantially equal periodic payments.
The member told the Audit Representative that his stress level was “through the roof.” He had never been audited before, and he was having trouble sleeping. Not only that, but he was checking his email at least fourteen times a day for “news” from TaxResources about his audit.
The Audit Representative assigned to his case knew exactly what to do to resolve the audit. She also saw a way to ease the member’s worried mind. She explained which documents were needed and what she planned to do. When she submitted the response to the IRS she informed the member that it had been sent and told him how long he could expect to wait before receiving a response. Whenever she received anxious emails from the member, she called and spoke with him instead of replying via email.
Eventually, the IRS responded with a “no change” letter showing no balance due. It was exactly as the Audit Representative had said should be: the member qualified for an exception and did not have to pay the 10% additional tax.
The member was overjoyed with our service. Below is an excerpt from an email the Audit Representative received from the member:
Thank you so much for your assistance! You were very professional, understanding and evidently knew exactly how to handle my letter from the IRS. In 40 years of sending in tax returns, this is the first time I have been notified of an audit and I was quite naturally very uneasy. You returned each of my calls and emails in a very timely manner and kept me abreast of the proceedings. You let me know each time about how long the IRS would take to respond to the material you had me send which definitely helped me to keep my eyes off the mailbox each day. I was overjoyed when the IRS wrote that my forms were accepted as originally submitted. Your service is undoubtedly the best investment I ever made.
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