At the end of January 2023, Carl was concentrating on applying for a new job to start his year off right. He decided to take a break and went to check the mail. Once he got his mail, Carl started to look through it; he got the normal items, like bills, some last-minute holiday cards, and credit card offers. However, when he got to the final item, he dropped the rest of his mail because he was completely shocked – he had received a letter from the IRS.
Carl frantically picked up his mail from the ground and returned to his house. After taking a second to regain his composure, he again pulled out the notice and fully read it over. The letter he received was for his 2020 tax return, and he owed a total of $80,000 – $60,000 in taxes and $20,000 in penalties for his 2020 taxes! The letter explained that the IRS had questions regarding Carl's Form 2555; they were requesting information to substantiate his foreign-earned income, employment, and travel, among other things. Panicked, the only thing Carl thought to do was look over his tax return for 2020; while doing his third review, he remembered he had purchased an Audit Defense membership!
Carl immediately called TaxAudit and was connected to one of our Customer Service Representatives, Lisa. She explained the next steps of the process and helped ease his mind. Before the call ended, Lisa told Carl that his Case Coordinator would contact him within the next few days. To his surprise, his Case Coordinator, Karen, called and messaged him that same day, requesting the documentation needed to move his case forward to a Tax Professional. Carl immediately sent his documents to Karen and, in just a few more days, his Tax Professional, Bill, requested a virtual meeting to discuss Carl’s tax situation.
In their first meeting, Carl explained what happened in 2020. Before the pandemic, he had been a pilot overseas. He was laid off because of the pandemic and, due to quarantine protocols, was quarantined in the UK for a few months. The IRS wanted him to prove that he was, indeed, traveling and living overseas to qualify for the deductions he put on his tax return.
During this meeting, Bill requested additional documentation about his international travel. Additionally, since Carl had only been overseas for a few months before being laid off, and then left the country before the 330-day mark, Bill informed him that he would typically not meet the criteria he needed to claim the deductions he put on his tax return. However, upon further research, Bill found that under IRC section 911, there are some exceptions to this rule in the case of adverse conditions. Bill found IRS Revenue Rulings that ruled in the taxpayers’ favor dealing with a similar case to Carl’s.
Bill told Carl right away about IRC section 911 and asked for documentation of his travels, change of employment, and payments from his employer while he was working out of the country. Once Bill received this information from Carl, he was ready to submit a response to the IRS!
During this time, the expected time for an IRS response was a few months. After the first two months, the IRS had yet to get back to Bill, so he contacted the IRS for an update on the case. Over the course of the next handful of months, Bill made 11 follow-up calls to the IRS. Finally, on the eleventh call, Bill got fantastic news for our member: Carl went from owing $80,000 to $0! This case demonstrates that constant, exceptional communication and research lead to positive outcomes and a loyal customer!
This is what Carl had to say about this case:
My agent was diligent in his advice and work. He was dutiful in checking in on things with me during the protracted process and continuing to stay on top of the IRS.
*Some names and identifying details have been changed to protect the privacy of the individuals.