90-day letter after audit, now 1040x?

[Gretel]

Client was assessed additional taxes, letter 3219 was issued. Taxpayer never signed (nor notified me) and now we are at day 120. Tax was not assessed yet, nor was anything paid. New facts substantiate a partial deduction of the item disallowed in full but can we still file an amended tax return to get the tax owed reduced?

[DaveinTexas]

Audit Recon

I wouldn't file the 1040X, personally, because this may just muck up the works even further and the IRS may use it's "discretion" not to process the 1040X.

I would recommend the Audit Recon process, which is also processed at the IRS's "discretion" but it appears this process is what should be used in your client's situation. I hope my advice didn't come too late, I've been snowed under since late Jan.

Here is a link that provides some excellent advice on how to start the process (just don't use the GA addresses unless your client lives there).

http://taxclinic.law.gsu.edu/collections-process/audit-reconsideration/

Good luck!

[Gretel]

Maybe too late

Thanks, Davein, I will take a closer look at the link. However, the 1040X was filed two days ago along with a letter to the address of the 90-day letter (client never signed for his agreement) asking for audit reconsideration. Meanwhile he also got a letter that the amount owed was taken for his refund. We probably will need to file a claim for refund after this mailing is processed.

[taxea]

Was this an AUR audit? I took an IRS webinar this a.m.. The instructor says the IRS will work with you even after a 90 day letter. Also a 1040X can be submitted but do not file it. Submit it directly with the 1st page of the notice to the address on the notice. Include specific detail of any disputed items.

[New York Enrolled Agent]

Client was assessed additional taxes, letter 3219 was issued. Taxpayer never signed (nor notified me) and now we are at day 120. Tax was not assessed yet, nor was anything paid. New facts substantiate a partial deduction of the item disallowed in full but can we still file an amended tax return to get the tax owed reduced?

I think it's more likely than not, the IRS will act on your request for audit reconsideration but technically they should not. Audit Recon is only appropriate after tax has been assessed. See IRM §4.13

[Gretel]

Thanks, tax was assessed but taxpayer never signed his consent, meanwhile tax assessed was offset by refund. 1040X was filed to audit unit along with audit reconsideration request before it was clear that tax was offset. It appears to me that I will need to file a claim for refund. I will keep you posted what actually happens.

[New York Enrolled Agent]

Thanks, tax was assessed but taxpayer never signed his consent, meanwhile tax assessed was offset by refund. 1040X was filed to audit unit along with audit reconsideration request before it was clear that tax was offset. It appears to me that I will need to file a claim for refund. I will keep you posted what actually happens.

This a change from your original post.

Client was assessed additional taxes, letter 3219 was issued. .... Tax was not assessed yet

Letter 3219 does not make an assessment. You need to give some better details.

[Gretel]

This a change from your original post.

Client was assessed additional taxes, letter 3219 was issued. .... Tax was not assessed yet

Letter 3219 does not make an assessment. You need to give some better details.

Yes, you are right. Original post and original situation was letter 3219. However, response to letter 3219 and assessment crossed in the mail, so did the receipt of the letter for the offset with the current refund.

[Snaggletooth]

Neglect equals Assessment

Gretel, the fact that your client never signed the acceptance does absolutely nothing to help him. He has 90 days to respond, and if there is no response, the proposed assessment becomes automatic. IRS has no obligation to relieve the assessment.

Some of my less punctual clients (and this is a generous description) don't do anything when they receive the 90-day letter. Then another time limit goes into effect and if the client does not pay, it will end up in collections. What's worse, the collection division has no authority to change the assessment (or so they claim).

My experience with these "less punctual" clients is that the IRS WILL allow a relaxing of the assessment after the 90-day period given sufficient co-operation and facts, but they don't have to.