Receiving a letter from the IRS is never easy. For Amber and Devin, the notice arrived with the kind of language and numbers that can make anyone’s stomach drop. The IRS was questioning their 2024 tax return, specifically a retirement income issue tied to IRA distributions, a Roth conversion, and a rollover. The notice suggested that retirement income may have been underreported by more than $450,000, and the response deadline was quickly approaching.
Amber knew the situation was complicated. There were account statements to locate, tax software entries to review, and a rollover amount that needed to be explained. After reviewing the notice, Amber also saw that the IRS had compared the information reported by financial institutions with the amounts listed on the tax return. Upon this review, she found that some of the numbers did not match.
This mismatch created a stressful question: did Amber and Devin owe additional tax, or was the IRS missing the full story?
In turn, Amber decided to contact TaxAudit for assistance. She first spoke to a customer service representative who reassured her that they were in good hands. Amber’s case was then assigned to a case coordinator, Justin, who requested a complete copy of the IRS notice and the 2024 tax return. Once the initial documents were received, her case was then moved to their tax professional, Olha.
During the initial review call, Olha walked Amber through what the IRS was questioning and explained how automated IRS notices can be triggered when reported tax forms do not match the tax return. She also explained what the upcoming process would entail, which included obtaining authorization to represent her, reviewing IRS transcripts, gathering proof of the rollover, preparing a response, and following up with the IRS until the matter was resolved.
For Amber, that explanation mattered. The notice was confusing, and the amounts being discussed seemed incomprehensible. But instead of being left to figure it out alone, she had someone who could translate the IRS language into clear next steps.
After Olha received and reviewed Amber and Devin’s documentation, she determined that the issue was centered around how the retirement transactions had been entered on the return. The IRS records reflected a total distribution amount that did not match what had been reported. There was also a $272,000 rollover that had not been handled correctly on the originally filed return.
As the IRS deadline approached, Olha contacted the IRS and obtained a 30-day extension, giving the team more time to strengthen the response and relieve pressure off Amber and Devin. That extra time proved to be crucial in this case. Amber was able to find and provide additional account statements showing the movement of funds and clarifying the rollover details.
After reviewing the additional documentation, Olha revised the response packet to include Amber’s supporting statement and the account information showing the rollover activity. Once the response was reviewed by quality control, the response to the IRS was sent on Amber and Devin’s behalf.
Then came the waiting period. The IRS later sent a letter confirming that they had received the response and needed more time to review the documents. Olha explained to Amber that no action was needed and that TaxAudit would continue monitoring the case. That steady communication helped turn uncertainty into reassurance. Even when the IRS process slowed down, Amber knew what the letter meant and what to expect next.
Finally, the best possible news arrived. The IRS issued a CP2005 letter stating that the inquiry was closed with a $0 balance. The supporting documentation worked as intended, and the IRS accepted the response.
At the conclusion of their case, Amber and Devin had this to say about working with Olha.
“Olha is the consummate tax professional. She navigated our audit with the IRS, resulting in us owing zero dollars and the audit closed. She deserves all the accolades as being the best of the best. Olha is the go to person!”
This case is a strong reminder that IRS notices are not always the final word. Sometimes the IRS has incomplete information. Sometimes a form is entered incorrectly. Sometimes the issue is not whether income exists, but whether the full transaction has been explained in a way the IRS can verify.
For Amber and Devin, the difference came down to careful review, clear communication, and persistence. TaxAudit helped identify the reporting issue, gather the right supporting documents, request more time when needed, prepare the response, and stay with the case until the IRS closed the inquiry.
What started as a stressful IRS notice ended with peace of mind. If you are interested in purchasing audit defense, click here for more information!
*Some names and identifying details have been changed to protect the privacy of the individuals.
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