Mail Examination

[geekgirldany]

Just wanted to follow up on the post on about a customer getting mail audited for a sales tax deduction on Schedule A. This was sales tax paid on building a house.

edited out

I am going to do some additional research but I don't remember anything like this being in the sales tax publication. Next step is to go to Taxpayer Advocate Office.

[Snaggletooth]

Go to TP Advocate

On a phone call today I was told the reason the deduction was disallowed was because the taxpayer setup a separate bank account for the house construction.

Geeko, this is ridiculous. Auditor is desperately stretching the imagination to concoct some way to disallow this. I might talk to auditor's supervisor first, as the TAO will take lots of time and has to come in outside the "chain of command."

Since Georgia has an income tax, this sales tax deduction must be substantial to exceed the income tax deduction in your state.

[BOB W]

99% of these mail audits are dead ends for taxpayers. Request a face to face audit at your local IRS office.

On your issue, it will go your way. This auditor is way off base. If the account was set up with the taxpayer's SS# it is directly related to the taxpayer.

[geekgirldany]

Thank you guys for responding.

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[BOB W]

Thank you guys for responding.

I think I will ask to talk to the supervisor first and see how that goes. The taxpayer may just want to pay it even though he is entitled to the deduction. The difference in tax between using state w/h and sales tax is around $300. I thought when I got a chance to talk the examiner and explain she would change it. She just kept on calling it a business account. Really doesn't make sense at all. But atleast she did talk to me. I was having trouble getting to anyone before.

How can she call it a business account, there was no business? If it is a business account why isn't she asking why a business tax return was not filed?

Really, have the case transferred to a local IRS office.

[ED SMITH]

Wait...

...for the assessment letter, then appeal it with the letter explaining your argument. This is much easier and less time consuming than chasing down supervisors. The TAO won't get involved until after an appeal and it is creating a hardship.

[geekgirldany]

Thank you all for responding.

edited.

[FEDUKE404]

Don't back down!

Assuming the facts are correct (no contractor paid sales taxes, "business" account was definitely a personal account, etc) this auditor is way off base.

Absent the actual receipts, showing the dollar amounts of the sales tax paid, there is not much to be disputed other than perhaps the (calculated) dollar amount of the sales taxes paid and whether everything in the account was truly "construction material."

But that is true nit-picking........

You keep mentioning exchanging letters - have you actually talked with the auditor on the telephone and/or then asked to move up the IRS food chain?

Good luck!

FE

[geekgirldany]

Please don't quote this... I would like to edit it out later.

I'll try to keep it as short as I can....

Yes I talked to the examiner last Thursday.

I guess the only good thing I saw on the letter was it is interest only and no penalties.