Back in December of 2024, our members, Joseph and Grace, received a notice from the IRS: an IRS CP2501. Joseph reviewed the notice, which claimed that the information the IRS received from several financial institutions did not match what was on their filed 2024 tax return. Fortunately, Joseph also remembered he had purchased an Audit Defense membership for 2024, so he reached out and gave TaxAudit a call.
He was immediately connected with one of our customer service representatives, Sarah, who started a case for him and reassured him that he and Grace were in good hands. Joseph was then assigned to his case coordinator, Justin, who would be there to provide administrative support throughout the rest of the audit process. Justin requested copies of the IRS notice and the corresponding tax return, which Joseph quickly sent over via TaxAudit’s secure message portal. Within 24 hours of reporting the notice, Joseph and Grace’s case was assigned to their tax professional, Katie, who put a meeting on the calendar for them to chat the following business day.
During their scheduled meeting, Katie informed Joseph and Grace that it appeared they had inadvertently omitted employee stock sales totaling more than $120,000 from their 2024 tax return. In turn, the IRS was claiming that Joseph and Grace owed an additional tax of almost $20,000. The couple was shocked by this figure, but Katie told them not to worry – she would jump in to see what she could do.
She started by requesting copies of all the relevant documentation, including various 1099s and bank statements. Joseph immediately submitted the requested information for Katie’s review. After reviewing the 1099s, Katie discovered that Joseph and Grace did, in fact, leave some of the employee stock sales off their 2024 tax return – but it was not as high a figure as the IRS was claiming. In fact, there was a $15,000 difference between what the IRS notice was listing as opposed to what Joseph and Grace had actually included on their tax return.
In an effort to expedite the response process, Katie decided to call the IRS to see if she could resolve the issue over the phone. She was able to speak to an examiner and, after making a compelling case for Joseph and Grace, the IRS adjusted its assessment less than three weeks after the original notice was issued. The original estimated liability of $20,000 was reduced to $5,000, saving the couple around $15,000. Not only did this save the members an additional financial burden, but Katie’s ability to resolve the issue over the phone also saved Joseph and Grace the time and stress of having to continue to deal with the IRS.
At the end of their case, here is what Joseph had to say: “My experience with Katie was terrific. She kept me informed of all the updates throughout the process. She was quick to answer any questions that I had and shared some great advice, as this was all new to me.”
For many, responding to notices, navigating the tax law, and dealing with the IRS can feel overwhelming – impossible, even. But with the right support and expertise, even the most daunting tax challenges can end positively in the taxpayer’s favor.
If you would like more information about TaxAudit’s services or if you would like to take advantage of our Audit Defense membership, click here for more information.
*Some names and identifying details have been changed to protect the privacy of the individuals.
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