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A Tax Refund Turnabout

July 01, 2011 | Written by: Rhonda Guillory, Audit Representative
1040A Tax Return and United States Treasury Check
One of my most recent exciting cases started out with one our members receiving a bill for $434.79 when she was expecting a refund of nearly $7,000. This is the first notice our member received; however, she had relocated a couple of times since initially filing her return, so it was clear that there had been other letters she had never seen. Upon investigation we learned that an Examination Report had indeed been issued in which the IRS stated that multiple tax returns had been filed and that a portion of the original refund was frozen. The IRS had recalculated the member’s tax by changing the filing status to married filing separately and disallowing exemptions and credits related to her two dependent daughters.

Apparently, although our member was legally separated from her ex-husband and filed a separate return claiming her daughters as dependents, the ex-husband had filed a joint tax return with our member, unbeknownst to her. We obtained the necessary documentation from our member and submitted it to the IRS. In the meantime, our member also began receiving notices for the same tax year, with the member’s ex-husband appearing as the primary account owner on the notices. The notices warned of the IRS’s intent to levy, per the $7,936 balance due. Although we were not able to obtain details of the balance due since we were not representing the ex-husband, we were able to help the member to address these notices with the IRS.

Finally, after six months of working the case, we received a letter from the IRS stating that the member’s Earned Income Credit had been recertified, and that a refund should be received within six weeks. Before I could contact our member, she sent me an email to let me know that she had received a $6,868 refund check, the amount that was previously frozen, plus interest!

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