IRS Panic Averted: How a Simple Mistake Led to a $12,000 Bil

But when that letter claims you owe over $12,000 in taxes, penalties, and interest for a simple oversight, the panic can be crippling. This was the situation one of our member, Brett, found himself in after failing to include some stock information on his 2023 tax return. 

Thankfully, an experienced professional like TaxAudit’s tax professional, Debbie, was ready to step in and turn a stressful scenario into a fantastic win. This case highlights two crucial truths: tax issues are often reversible, and the right expert makes all the difference. 

The Initial Shock 

The heart of the problem was an unintentional error: a missing Form 1099-B and the accompanying stock transactions. The IRS, using only the information it had, believed Brett had unreported income and hit Brett with a massive bill. Fortunately, Brett remembered he had purchased Audit Defense for his 2023 tax return and immediately reached out to TaxAudit. He first spoke with our customer service representative, Roni, who started a case for Brett and let him know he was in good hands. 

The case was then assigned to Brett's case coordinator, Cerissa, who requested a copy of the IRS notice and the corresponding tax return. Once these documents were received, she swiftly assigned Brett’s case to one of our seasoned tax professionals, Debbie.  

The Expert Intervention 

Debbie immediately focused on the missing information. Her methodical approach involved guiding Brett through uploading pages of his consolidated 1099. Once she had received Brett’s statements, Debbie recalculated the entire tax scenario with the correct documentation. 

After reviewing the complete transaction details, Debbie's analysis revealed that Brett did not owe the IRS – but he was actually due a refund of $3,000.  

The Resolution 

Upon this discovery, Debbie prepared a response to send to the IRS disputing his notice. The quality control team approved the response which the administrative services department then mailed to the IRS. 

In the coming months, Brett and Debbie played a tedious waiting game as the IRS processed the submitted information. Debbie diligently followed up with the agency every 45-90 days to check on the status of the case, keeping Brett in the loop every step of the way.  

Six months later, good news finally arrived. Brett received a recomputed notice from the IRS that agreed with Debbie’s response and showed the expected refund. Better yet, the refund check was $3,200—more than Debbie’s estimated best-case scenario. 

Here is what Brett had to say about his experience with Debbie:  

"It turned out that I did not owe anything, and in fact the IRS owed me over $3000... Aside from being knowledgeable on taxes, she was pleasant to work with. She never made me feel bad about the mistake that I had made." 

Debbie didn't just save Brett thousands of dollars; she provided a stress-free experience during an inherently stressful time. She was a knowledgeable, reassuring presence who treated our member with respect, focusing on the solution rather than the error. 

This case is a powerful reminder: an initial IRS notice is often a starting point, not a final judgment. With expert audit defense, even a demand for payment can be turned into a refund. 

Don't let an unexpected IRS letter derail your financial peace. Protect your future and gain access to compassionate, expert EAs like Debbie. Click here to sign up for Audit Defense today!