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A Schedule C Situation

May 26, 2022 | Written by: Kate F.
Couple Reading Letter
In August of 2020, Saad and Nadya received an audit letter from the IRS. Having been members of TaxAudit for over five years but never receiving anything from the IRS prior to this, they anxiously contacted our Customer Service Department. They provided the audit notice in question - an IRS Letter 6323 - which was auditing their entire Schedule C for tax years 2018 and 2019.

Saad and Nadya were assigned to a Tax Professional who was ready and prepared to handle their audit. After an introductory phone call to go over the process, all the required documents were requested to form a response to send to the IRS. As the IRS was auditing two tax years, there were a lot of documents to gather and assemble into a response. However, Saad and Nadya were diligent in gathering the documents needed.

After a few short weeks, a response was sent to the IRS. Then, the waiting game began. Due to the COVID-19 pandemic and shutdowns, the IRS was behind in processing responses, and turnaround times could be anywhere from a few months to up to a year. However, Saad and Nadya’s Tax Professional continually kept them informed on the status of their case and followed up with the IRS for updates.

It wasn’t until the beginning of June of 2021 that the IRS finally issued a response regarding the documents they received for Saad and Nadya. The IRS had not accepted the response and proposed a balance due of thousands of dollars. This was because the IRS had completely disallowed their Schedule C deductions. TaxAudit’s Tax Professional knew that this calculation was incorrect and worked with Saad and Nadya to gather additional documents needed to support the Schedule C claims on their tax returns for 2018 and 2019.

A second response was sent the third week in June of 2021, almost a year after receiving the first letter, and the waiting game began again. Just as he did previously, Saad and Nadya’s Tax Professional provided updates after following up with the IRS and checking in to see how they were doing. Months passed by, and a new letter still hadn’t been received. However, TaxAudit remained diligent in reaching out to the IRS to get a response.

Finally, in February of 2022, one year and seven months after receiving their initial letter, Saad and Nadya received a letter that offered the best-case scenario that everyone was hoping for. The IRS had accepted their Schedule C deductions for both 2018 and 2019 and issued a no-change letter. This meant that no changes were made to their tax returns, and there was no balance owed!

Though it was a lengthy process, Saad and Nadya’s Tax Professional stayed by their side and helped guide them through the entire undertaking. At the conclusion of their case, this is what they had to say: 

An IRS audit has always been one of my biggest fears, even though I'm extremely conservative when filing my taxes. So when I received the notice, my anxiety went through the roof. When I contacted TaxAudit, I was introduced to Dominic who would represent me and help navigate this process. Dominic was friendly and professional. He had a very calming effect in explaining the process to me and what to expect. After a year and a half my case has finally been settled and I owe nothing. I am SO relieved, and extremely grateful to Dominic. He kept me updated throughout the entire process. TaxAudit is a no brainer. It was the best decision I ever made! Thank you TaxAudit and Dominic! 

*Some names and identifying details have been changed to protect the privacy of the individuals.    

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