A Tale of Tenacity

A case assigned to me in late 2008 was one that had been handled by an outside rep and was coming inside to appeal. The Member had not been allowed to take his actual vehicle expenses over the employer reimbursed standard mileage rate on his 2005 & 2006 returns. While it would not make a tremendous difference to the bottom line, we were arguing on principal and the fact that the Member was entitled to the deduction.

When the Member and his first representative decided we would appeal for him they decided to make a deposit on the Member’s account to stop interest from accruing, just in case we lost. However, the Member paid the exact balance due, to the penny, and when the IRS examiner received the Member’s check she assumed he was agreeing with the adjustments and she closed the case. The total paid by the Member for both years was $8,062.54.

I was able to get the case reviewed by the Taxpayer Advocate Service, and they were able to get the case re-opened and assigned to an Appeals Officer. It only took about one month to get the accounts to show the payments as credits, and the IRS actually sent back a small refund of about $200 for the additional interest that had accrued after the payments were made.

A few months went by and we finally received a letter explaining that we had to file a protest which was mailed to the IRS in March of 2009. In early June, when I had heard nothing, I once again contacted the taxpayer advocate who suggested I send the protest a second time. This was on June 5, 2009. I received a stall letter indicating the protest had been received.

As a general practice, the IRS gives information to the state regarding adjustments made, which is why we suggest that our Members amend their state returns when appropriate at the conclusion of a federal audit. However, in this case, the federal audit had still not been resolved but because the IRS had technically “closed” the case, this information was forwarded to the State of Georgia. Georgia didn’t care that the IRS had erred and prematurely closed the Member’s file. They go by the IRS transcripts only. But I knew better than to try to get the IRS to reverse the transcripts.

Needless to say, I spoke with numerous people with the State of Georgia, and none were willing to help. I finally found someone to at least look at the situation and agree to look at the Member’s documentation that we were trying to get reviewed by an IRS Appeals Officer. In the meantime, Georgia took the Member’s 2009 state refund of $1,700, which barely covered the interest that had accrued during these years.

Finally, in March of 2010, I received a letter from an IRS Appeals Officer stating that he was attempting to get the lead sheets from the original examiner. A few conversations with him proved that he was as disgruntled with the exam unit as we were. He said that after three requests and receiving nothing, he would likely end up siding with us. He felt that the exam department was doing nothing to “reduce the hazards” the IRS was creating. Finally, in September of2010, the Appeals Officer sent another letter indicating that the case was going back to exam.

I once again contacted the taxpayer advocate and was fortunate enough to get the same one I had previously worked with two years earlier on this same case.

I can only imagine how the Member was feeling during all of this time. When I explained to him what was going on, he decided that writing to his congressman would help. Well, it didn’t, and actually it created an even bigger mess. Now remember about Georgia wanting their share? Well, the Georgia taxpayer advocate finally responded to our letter and gave us a chance to appeal. This at least stopped the state’s collection process, but only for 2005, as they didn’t realize the appeal was for 2005 & 2006.

Happy New Year! It’s 2011 and the IRS taxpayer advocate is working with the exam unit to expedite the case back to appeals, and the State of Georgia now has a hold on any further action for both years. However, Georgia says that if the IRS transcripts aren’t reversed they will start up collections again on May 1, 2011.

With an okay from management along with the Member’s agreement, I submitted an Offer in Compromise to the State of Georgia. Around the same time, I received a call from an IRS examiner who said he had been assigned to resolve the case and to please call and discuss it with him. However, a couple of weeks later he called again to tell me that because of the “congressional involvement” the case needed to go to a different examiner. WHAT!?!

April came and we were almost to the end when I received a call from the most fantastic Georgia Department of Revenue employee. She was fantastic because she actually worked with me to resolve the state issue. Ultimately, if we agreed to drop our request for an appeal they would refund the 2010 refund taken but keep the 2009 refund plus a check for $1,345 from the taxpayer and all would be finished. We quickly agreed.

Meanwhile, the IRS taxpayer advocate is trying to locate where the case has been sent, but with no luck.

We finally located the examiner who had been assigned the case for review but then she left a voice mail on July 12, 2011, saying that she agreed with the exam unit and would be sending the case to appeals. WOW!!

Imagine my surprise, however, when the taxpayer advocate told me I had to complete a particular form requesting the case be sent to appeals. WHAT!?!

Another new year arrived and the case had still not been sent to appeals. Then on March 29, 2012, I received a voice mail from the same Appeals Officer who had previously worked the case but could never get a copy of the lead sheets from exam. On April 3, 2012, the AO confided that the IRS had let the statute run out on the case so the assessment had become null and void.

It took just over another year of the IRS sending the case up the required chain of command, from the area directors to chief counsel and, finally, to the statute department. And then, on May 14, 2013, the taxpayer received a check for $9,404.71. The interest earned was better than a savings account would have made over those years.

Perseverance in this case most assuredly paid off.