In December of 2021, Jeremy contacted TaxAudit regarding a notice he had received from the IRS for his 2019 tax return. After providing the notice and tax return in question, Jeremy was assigned to work with a Tax Professional who would help walk him through the process.
What Jeremy had received from the IRS was a CP2000 with a proposed tax due of $54,546. In addition, there was interest of $3,419 and a substantial tax understatement penalty of $9,909 for a total due of $58,874. Jeremy, of course, was worried about this amount as it was no small amount due! After discussing the notice with his Tax Professional, Jeremy found out that the notice was received because of sold shares of stock that did not have a cost-basis. However, his Tax Professional confirmed that for these types of stocks sold, a cost-basis is not required to be reported to the IRS, so the notice was incorrect.
Jeremy was given a list of documentation that would be needed to properly respond to the IRS and, once provided, his Tax Professional let him know what the next steps would be. Since there were only two transactions being reviewed on the notice, rather than sending a written response to the IRS that could take months to resolve, Jeremy’s Tax Professional decided to call the IRS and resolve the issue over the phone. While speaking to the IRS, the cost-basis was provided, and the IRS agent was able to take over Jeremy’s account. From there, the IRS agent was able to enter the correct information and adjust Jeremy’s calculations on the spot. The IRS informed the Tax Professional that a new notice would be issued showing these changes to the account.
While Jeremy and TaxAudit waited for the new notice to be issued, Jeremy’s Tax Professional prepared a proforma of his income tax return with the information from the supporting document Form 1099-B that was provided earlier in the process. From the proforma, Jeremy was told that, instead of owing an amount to the IRS, he was expected to receive a refund!
A few weeks later, the letter from the IRS confirmed this calculation. Whereas Jeremy initially owed the IRS a proposed amount of $58,874, including all interest and penalties, in the end, after TaxAudit’s help, Jeremy was set to receive a refund! The IRS issued the refund check amount of $2,037 to Jeremy!
In all, the entire process took just three, short months. Due to the knowledge and insight of Jeremy’s Tax Professional, this case had a quick turnaround and positive resolution. At the conclusion of his case, this is what Jeremy had to say.
“Edward was professional and friendly. He understood how I was feeling based on the letter I received from the IRS, outlined his plan & approach, communicated constantly and helped me understand matters throughout. Very pleased with my experience and of course outcome.”
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*Some names and identifying details have been changed to protect the privacy of the individuals.
