In the summer of 2023, two of our members, Nancy and Jonathan, contacted us about an IRS notice they had received. The IRS was inquiring about a Schedule A mortgage interest deduction they had claimed on their 2021 tax return. This initial letter came as a shock to the couple, claiming they owed over $55,000, which they didn’t believe was possible. Fortunately, Nancy and Jonathan remembered they had purchased a TaxAudit Audit Defense membership back when they filed their return. They knew they didn’t want to face the IRS alone, so they hopped on our website, created a log in, and easily submitted their information to start a case.
The next day, their case coordinator, Veronica, reached out to the couple. She confirmed that we received their request and let them know we would be happy to assist them. The first thing that Nancy and Jonathan needed to do was submit a copy of the IRS notice and the corresponding tax return so that we could determine the IRS issue and come up with the appropriate next steps. Nancy submitted this info immediately, and the case was forwarded to our tax professional, Savannah.
After Savannah reviewed the notice, she requested a bit more information from Jonathan and Nancy to confirm that they could take the mortgage interest deduction they had claimed. Jonathan sent her the requested documentation, and Savannah determined that the couple took the correct steps upon filing. She compiled the documentation, drafted a letter to the IRS explaining the couple’s stance, and mailed everything to the IRS.
To our relief, the IRS responded swiftly and agreed with our assessment of the case. Savannah called Nancy and Jonathan to let them know the exciting news, and the case was closed.
However, the relief was short-lived. Two months after we believed the audit was closed, Nancy and Jonathan received another letter from the IRS. This letter stated that they now owed over $200,000 as a result of the most recent audit. They reached back out to Savannah to see if she could investigate and determine what was going on.
Savannah immediately jumped in to determine the issue. Over several days, she meticulously checked the member's wage and income transcripts, account transcripts, and tax return transcripts to identify any discrepancies or errors that could have led to such a significant bill.
After a thorough examination, we discovered that the IRS had removed all the tax withheld from the member's return, which Savannah knew to be a significant error on their part. She immediately contacted the IRS to discuss the issue with them and Jonathan expressed his gratitude for her diligence: “Thank you for being so responsive on this. We had a mini heart attack yesterday when I saw this notice - and it is just so helpful that you are all over this. Thank you!”
Over several days, Savannah attempted to contact the IRS agents who originally worked on the previous notice but could not reach anyone willing to chat with her. Instead, the individual she spoke with asked her to compile a brand-new response to dispute this new notice and submit it to the Audit Reconsideration department. Savannah gathered and submitted the documentation immediately, hoping the issue would be resolved quickly.
Unfortunately, this was not the case. Nancy and Jonathan continued receiving bills from the IRS, claiming they owed this substantial amount of money. Savannah continued to follow up, only to be told she needed to wait for a manager to review the documentation she had sent.
After months of correspondence with no answers on the case, Savannah decided to take a new route and submitted a request to the Taxpayer Advocate Service (TAS), an organization within the IRS that works to ensure taxpayers’ rights are not violated. It took a few more months of patience on the part of Savannah, Nancy, and Jonathan, but a representative was finally assigned, and another round of back-and-forth began.
Over the next year, Savannah worked to submit additional documentation, requested hearings and appeals, asked for a new TAS officer when the first one was unresponsive, and continued to follow up with the IRS using every route possible to resolve this issue.
Finally, all the patience, perseverance, and years of hard work paid off when Savannah received a voicemail stating that the case would be closed. Not only would Jonathan and Nancy not owe any additional tax to the IRS, but they were also due a refund of $8 for an overpayment on their part.
The details of this case highlight the value of having Audit Defense. For a low, one-time fee, our members had a tax professional navigate a complicated series of channels to make sure that they paid no more tax than they rightfully owed. At the end of the case, Nancy and Jonathan were extremely grateful for Savannah’s expertise and diligence and are confident they will purchase Audit Defense for years to come. Should anything like this happen again, they know TaxAudit will be on their side.
*Some names and identifying details have been changed to protect the privacy of the individuals.
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