IRS shorted my client part of their refund due to what the IRS said was miscalculation on EIC worksheet. Had my tax software tech people take a look at it and they tell me everything is correct and that the IRS only factored in the one Sch C with a net profit and not the other Sch C with a net loss. Anyone ever had this happen before and if so is this something that can be resolved over the phone and thru faxes with the IRS?
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Married filing jointly, one spouse with profit on Sch C and the other with loss? I've seen that. Basically the IRS calculated earned income on worksheet B (page 54 of 1040 instructions) and skipped Part 2. Because the spouse with a loss isn't required to file Schedule SE it needs to be done even though part 1 is completed for the spouse who does have to file Schedule SE. Not sure if it's an issue with the IRS computers or what, I just sent a response w/ Worksheet B attached. -
The IRS did not officially admit they were wrong.
I got the IRS on the phone and pleaded with them to allow me to fax me my worksheet. When they received it, they started manually using their own worksheet. I asked them if they are using the worksheet from the "1040 Instructions" and she replied no. Then she kept coming up with the incorrect amounts and we went around and around. Finally she came up with a higher EIC for my client which matched the one and only tax return. I got 2 - 3 hours into this. So do you other preparers charge by the hour to resolve an error that was NOT your fault?Originally posted by David1980 View PostComment
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No, if it's an IRS snafu, clearing it up is part of the service I provide to my clients and is factored into my fees.Originally posted by AZ-Tax View Post"A man that holds a cat by the tail learns something he can learn no other way." - Mark TwainComment
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no
unfortunately I agree that taxpayer should NOT be charged for IRS error! I DO however explain to the taxpayer the amount of time I spent resolving the IRS Problem! (and then will adjust future fee slightly)!Comment
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I agree that we should not be responsible for absorbing the costs of an IRS error. This is not part and partial to prep of a return and if the client wants it corrected then the client needs to pay for my time. the only thing I don't charge for is a correction of an error that I have made.
I thing that whenever we come across an error by the IRS we should report it via the irs complaint form. If I come up with a better way of reporting such problems I will post it.Believe nothing you have not personally researched and verified.Comment
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Fees
I would never charge for an error on my part, but spending 3 hours on the phone with the IRS, not my fault, I would certainly consider an hourly charge, if this could not be resolved after 30 minutes.
I had this same situation a couple of years ago. Had a favorable result, but it took quite some time on the phone.Comment
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