Notice of Deficiency

[S T]

IRS notice of Deficiency, guess we also need to say Notice of Deficiency in Taxpayer (like open your mail, this is not your first notice)

Taxpayer forwards an IRS Notice of Deficiency from IRS dated 9/08 in Feburary 09, so 90 days has passed, last date to petition is 12/29/08.

Any hope and what to do now. It was for CP 2000 notice that could have and can be rectified.

Just because, I guess I will fax to Fresno all information.

Any other suggestions on what to do next?

Thanks,

Sandy

[Koss]

Notice of Deficiency

In the response that you fax, you should request "Audit Reconsideration."

This is a process that allows the IRS to re-open the matter.

Even if they don't re-open it, at least in theory, I think the taxpayer still has the right to file an amended return, particularly when it involves a CP2000.

How are you going to "rectify" the unreported income? Is it self-employment income that has expenses? Or something else?

BMK

[S T]

Rectify

The rectify is easy for this CP 2000 notice, no unreported income, a mortgage interest deduction that could not be matched, and I have the mortgage interest statements that substantiate the mortgage interest deductions.

Taxpayer was just asleep, and never bothered with the original notices recieved. One of those taxpayer's that someone or something needs to get their "attention" like about $4,000 worth!

Should not be an issue, we have statements from the mortgage holders.

Thanks for the advise on the "Audit Reconsideration" So fax the related information as if answering the CP 2000 notice, and if that fails, then file a 1040X, which I still have some time on? 2006 tax return due 2007 so time runs out 2010.

Sandy

[Koss]

Amended Return

You may actually have three years from the date the IRS made the adjustment.

Requesting Audit Reconsideration will probably work in this case. IRS staffers sometimes call it "audit recon."

But if you do file a 1040X, keep in mind that you are not amending the original return. You are amending the return from the state it landed in after the IRS made an adjustment.

Look carefully at Column A of Form 1040X and you'll see what I mean. The IRS changed the return to take away an itemized deduction. You're changing it again to put the itemized deduction back into Schedule A...

But you probably won't have to go that route.

CP 2000 is technically an audit. It's just a highly accelerated audit that is conducted by mail. The notice is the audit report, i.e, the conclusion, with the changes proposed by the IRS. So when you fail to respond, the changes become final. This is why audit recon is available in this situation.

BMK

[Koss]

Audit Recon

Check this out:

http://www.irs.gov/pub/irs-pdf/p3598.pdf

BMK

[S T]

Irs

Thanks Burton for your information.

I phoned the IRS, and they said to fax the info and they should be able to handle and make the adjustment. Very helpful, the "Friendlier IRS".

Sandy

[Koss]

The "new" IRS

What I think you're seeing is something like this:

When someone sends in a response to a CP2000 after the time limit has supposedly expired, IRS personnel may be required, by their own internal procedures, to treat the communication as a request for audit reconsideration, even if that process is not explicitly mentioned by name.

In another time or place, the bureaucratic structure and mentality might have required the IRS to automatically reject a late response unless it explicitly requested audit reconsideration. Or perhaps you would have had to mail or fax it to a specific office or department to make such a request.

BMK

[JohnH]

Burton:
Thanks for that very thorough discussion with Sandy.
That was extremely useful information on several levels.

[RitaB]

I gotta start paying more attention

I was going "Who is Burton? And why are we talking about him?"

Wow, I need a little break.

[S T]

Update

Just wanted to update this post, the taxpayer advised me today on 4/7/09, that in response to the fax notice that I sent approximately 3 weeks ago, the IRS has adjusted the account to $ -0-.

So the system somehow does work.

Best news I have had today !

Sandy

[Jesse]

Congrats!!

[joanmcq]

WOW, my last audit recon took from November or so until now. Roommate's dad gets CP2000 in like late April. Tell him I do these for a living no problem. They didn't put their house sale on the return, but it was their primary residence so easy fix. Don't hear anything until November. took it to original preparer who said she would fix it. Didn't register when they got the NOD. By the time I get it they've gotten the notice to pay or levy for tax due of about $154000. Just checked eservices and the zero due notice will go out the 13th.

So when I'm looking out at my overgrown lawn and asking my roommate do you think your dad'll let me borrow his new riding mower, he says no. I say I got notice his tax bill is abated, think he might consider? And roommate says, I don't know why he didn't come to you for his taxes this year, he went to some one else. Now I want to borrow the riding mower and his stepsons to clean up my property!

[S T]

Joan

Joan, can you lend some advise on how to turn an office audit into a correspondence audit, now I have one of those. Really not much of an audit, looks like business miles being targeted for 5240 miles, and we have logs, and a few business expenses, of which there are very few on this Schedule C.

Thanks for any advice you can lend.

Sandy