A $98,000 Phone Call

This story is about a phone call that saved my member over $98,000. It was $98,054.83 to be exact. My member received a letter from the IRS that was very vague. Sadly, this is not surprising, as a great deal of notices I see require a keen eye to try to figure out what the tax authority is adjusting. In this instance, it was an adjustment to taxes. But after examining the notice, it was clear: the income figures on the original return matched the IRS figures. The IRS just went ahead and increased the total tax by approximately $98,000. One would hope such a large figure would garner a more detailed explanation from the IRS, but alas we were not so lucky. The member had a fairly complicated tax return which included a sale of a rental property and employee stock options. My initial thought was that it had something to do with that. But it turns out it was none of those items, as our evaluation in those areas did not provide a similar adjustment. We took some steps to further review the notice by glancing the IRS database information regarding the return and clearly it was a one line item adjustment purely on the IRS side with no explanations.

During the evaluation period, the member received a second notice from the IRS with increased interest. The IRS was withholding her refund as they thought she owed additional monies. My member had never been audited before and she was nervous. But she took humor in the fact that she had done nothing wrong and took confidence that we would be advising her throughout the case.

I called the IRS and luckily got a representative on the phone who was understanding and willing to work with me on the case. The IRS representative initially kept telling me the adjustment was in regards to income. But I pressed the matter with her, repeatedly asking her to specifically tell me what income was being adjusted. While reviewing the case with the IRS representative, she ended up also being baffled at the adjustment despite her initial stance. The representative put me on hold to review the case with her manager. When she finally came back she told me the manager had corrected the notice and that the member would have a no change!

I notified my member and she was very relieved, but we still had to wait for her refund or updated letter from the IRS to make sure the case was concluded. A month later the member was thrilled to receive her full refund and was very happy the case was concluded.

Although this case was regarding a very high amount ($98,000), it is interesting to note that a 30 to 40 minute phone call saved the taxpayer this grand amount. The total time spent on the whole case was multiple hours of time and effort based on the team here at TaxAudit. It makes me wonder about all the other of millions of notices that taxpayers get and pay, just to get rid of their IRS “problems.” Whether the tax notice is regarding $980 or $98,000, TaxAudit provides tremendous value for our low cost membership – and  if everyone had membership they also could enjoy the value of being protected from incorrect IRS notices or frivolous IRS adjustments.