The notice stated that the IRS was holding the couple’s $15,000 refund until they supplied documentation to support claims made on their 2024 tax return. Some of the documentation they were asked to provide included pay statements and a letter from Annie’s employer verifying her wages. According to the IRS, there was no record that the employer had reported her income or remitted the taxes withheld from her paychecks.
Unfortunately, that employer was no longer in business – even worse, that employer was also under investigation by the state for other tax issues. This left Dylan and Annie in a difficult position: They needed to prove employment and tax withholding without any corresponding documentation from her previous employer.
Fortunately, Annie remembered they had purchased TaxAudit’s Audit Defense when they filed their 2024 tax return. So, they decided to give TaxAudit a call.
Next Steps
They were immediately connected with a customer service representative, Anthony. He confirmed their membership and started a case for them, all while reassuring them that they were in good hands.
Anthony then assigned the couple to their case coordinator who would provide administrative support throughout the duration of the audit process. He requested a copy of the notice and tax return, while also informing Dylan and Annie that they would be assigned a tax professional who would reach out to them within 3-5 business days.
However, it took less than 24 hours for their tax professional, Sherry, to schedule a call.
During this call, Sherry informed them that she believed they had a case, even without a letter from Annie’s previous employer. She requested documentation pertaining to Annie’s wages and informed the couple not to have any contact with the agency – she would be the one to represent them through the duration of the case.
After this call, Dylan and Annie gathered and submitted:
W-2s and 1099s
Bank statements showing deposits
Supporting materials to confirm Annie’s work history
Sherry quickly reviewed and compiled the information, and then drafted a letter to the IRS, informing them of TaxAudit’s stance. Once the quality control team approved Sherry’s response, it was forwarded to the administrative services department who then mailed it to the IRS.
A Partial Refund
About two months after the information was submitted, Dylan and Annie received some hopeful news: The IRS was accepting a partial portion of their claim, which would result in a refund of $8,000.
However, the IRS was still denying Annie’s withholding claim, which would’ve amounted to an additional $7,000 as part of their tax refund. They immediately reached out to Sherry and let her know that they wanted to appeal the IRS’ decision. They believed that her W-2s and bank deposits showed the amount Annie had received from her old employer and couldn’t understand why that was not sufficient proof for the IRS.
Sherry agreed and drafted an updated response for the IRS. This time, she included additional information Annie provided, such as employee manuals and email correspondence with the employer to prove that she had, indeed, worked for that company. In her response, Sherry also cited IRS regulations that stated an employee should not be penalized for an employer’s failure to disclose certain information. The quality control team quickly approved this second response and administrative services, once again, shipped it off to the IRS.
The Waiting Game
Unfortunately, an IRS response did not come as quickly this time around. Over the next six months, Sherry called the Appeals office every 45 days to check the status of the case. After not receiving a satisfactory response, Sherry resubmitted the previous response to the IRS. At this time, she also asked if she could reach out to their congressman on their behalf to see if someone in their state office could expedite the process. They quickly agreed, and Sherry forwarded all the correspondence that had already been sent to the IRS to the congressman’s office.
In addition, Sherry reached out to the Taxpayer Advocate Service (TAS) to see if she could get someone to expedite the review of this second response.
Another eight months passed as Sherry continued to work with the couple’s congressman as well as TAS. She also continued to call the IRS and encouraged Dylan and Annie to continue to send any additional documentation they had to prove Annie’s work history.
The Turning Point: Appeals and Persistence Pay Off
After months of back and forth, Dylan and Annie’s congressperson coordinated with both TAS and Sherry to expedite a meeting with IRS Appeals. During this meeting, Dylan and Annie got the results they were hoping for: the appeals officer agreed with their stance, which would result in an additional refund of $7,000. This also included interest from the IRS due to the amount of time the couple had to wait for answers.
In the end, what began as a denied claim turned into a full resolution in favor of the taxpayers. Dylan and Annie’s documentation coupled with Sherry’s persistence and support from a congressman’s office resulted in the IRS reversing course and issuing the refund that was originally owed.
For taxpayers facing similar challenges, this case serves as a reminder: Even when the situation feels hopeless, the right support from start to finish can make all the difference.
At the end of the case, this is what Dylan and Annie had to say:
"Sherry was AMAZING! Once she took our case things started to improve immediately. She was in contact with the IRS frequently, and kept us informed of every conversation. She got us in touch with Senator Cruz office in Texas. She stayed on top of our protest until the IRS relented, and paid the return owed to us!"
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