Audit Problems

[joanmcq]

Davc is correct. But it does cost $100 to petition.

[bertrans]

A TP can request that the filing fee for the petition to Tax Court be waived because of hardship - and the hardship does not have to be specified.

[erchess]

This is certainly

a wealth of information. Please keep it coming.

I have the latest notice and it is a CP22A. It simply restates the demand for more tax plus interest based on taxable social security being left off the return. The previous notice and a telephone call at about the same time stated objections to my first 1040X but this notice does not address the 1040X that I sent in response.

[joanmcq]

The CP22A is what you get when the tax is assessed and you haven't paid. Its a nice request before the more demanding why haven't you paid letters followed by the intent to levy letters.

Do you have copies of what they sent in that started all of this? It seems like they agreed to the notice, so the tax is assessed. If you have a POA, you can get them to put a hold on the account. Tell them you are amending. Where did you send the 1040X to? The service center processing the notice or the regular 1040X address? The service center that sent the notice in the first place probably doesn't have the return any more since the TP agreed to it. Your best bet may be a hold until the amendment is processed.

And if the first agent you talk to isn't helpfull, try again. The agents vary widely in their level of expertise and level of empathy. Explain what happened. I just got a $122000 CP2000 reduced to $18000 by getting someone who cared to process the 1040x in this kind of situation.

[erchess]

Mea Culpa or in English It''s My Fault

The CP22A is what you get when the tax is assessed and you haven't paid. Its a nice request before the more demanding why haven't you paid letters followed by the intent to levy letters.

Do you have copies of what they sent in that started all of this? It seems like they agreed to the notice, so the tax is assessed. If you have a POA, you can get them to put a hold on the account. Tell them you are amending. Where did you send the 1040X to? The service center processing the notice or the regular 1040X address? The service center that sent the notice in the first place probably doesn't have the return any more since the TP agreed to it. Your best bet may be a hold until the amendment is processed.

And if the first agent you talk to isn't helpfull, try again. The agents vary widely in their level of expertise and level of empathy. Explain what happened. I just got a $122000 CP2000 reduced to $18000 by getting someone who cared to process the 1040x in this kind of situation.

I have a copy of the original return and I have all the documents that would have been necessary to prepare it correctly and avoid this mess. I do not have copies of everything the IRS has sent. I do not have a copy of the response faxed in by the taxpayers before I was hired and I believe that they had at least two telephone conversations wit the IRS to which I was not privy. (Whenever I work on this case there is a large Eight Ball in my face that I do not understand.) I obviously have copies of everything I have sent in.

If I am not mistaken at this hour of the night the original return should have been filed and was filed by mail to Memphis. The IRS Responses have all originated in Philadelphia and it is to the guy there that everything has been sent.

I just developed a sick feeling that I know what is wrong here and that I have been making a mistake due in part to the fragmentary nature of what I have to work with and in part due to my misunderstanding of something I got from the IRS by way of my client. I have been dealing with a man but my clients were called not long after I sent in the first return and told by a woman to write down for me word for word a statement that they were assured I would understand and would be able to use to make an amended return that could be processed. The statement told me what numbers to put as the first three numbers in column A of the 1040X. I saw that the first number increased taxable income from the original return by almost as much as I had worked out as the taxable amount of the social security. I therefore blithely assumed that the service had added in a figure for taxable social security that they were willing to live with and since my figure was higher I went merrily on my way applying the tax savings I have mentioned. Even I was surprised to "find" that the IRS owed them three hundred and change but that is what I sent in. I have in my life supervised other tax professionals and I always preached that the bottom line of each form and of the whole return should be checked for reasonableness. In this case it does not make sense that a client leaves income off the return but some of the income is deductible so the total effect is that they are due a refund.

[joanmcq]

Get a POA

Ok, so all the responses have gone through the underreporter center in Philly. The CP22A is probably coming from Memphis or Austin, and if you call the number on that notice, you can't get anyone to work the case, but they can put a hold on the account. Then call back 800-829-8310 to get the underreporter center (its sick that I have these phone numbers memorized) and see if you can get someone to pull up the file and find out what has happened to it. Explain, the circumstances as best you can and be nice. If you get an idiot, wait a bit and call back. You'll get someone else. Explain that the taxpayers responded on their own and you don't know what transpired before (try to roll your eyes in your voice when you say this).

One problem with the IRS system is the underreporter number for Philly is also the one for Ogden and Holtsville and the calls go to the service center that works the cases based on where you are phoning from. So I always get Ogden, even if the case I'm working is in Philly. Hopefully you always get Philly when you call. (last year the calls were answered by the next agent in line no matter where you were). So ask what center you are talking to; if you're talking to someone in Ogden, they can look at the file on the computer, but can't pull the physical file. The Ogden people are the best agents though!

[JON]

Since when is appeals

face to face. You have to look at the response to your amending. You did not "FILE" the 1040x if you just sent back to the CP2000 address. When I have done that I always have the CP2000 in front with the disagreement section signed and attached is my 1040X clearly stating that it is filed only as a response to the CP2000 and do not process. Then wait to see if CP2000 agrees or disagrees. I do not send payment I wait for the the "adjusted", hopefully, notice to come back agreeing with me or not.

The CP2000 notice changes are labeled by line number. You can respond by line number and they will react to that with a different, corrected, notice.

I think you still have to pay the tax before you get to appeals.

[erchess]

What do you do if

paying the amount assessed is beyond what the client can do without an installment agreement but you want to appeal?

[bertrans]

Now that we have some more data: so, the proposed assessment has been made? That's why your client got the CP 22? In that case, you can request for your client a reconsideration; this request MUST be made of the IRS Underreporter office that executed the assessment. You can then go in one of two ways: (1) explain all of the unreported items, with applicable documentation, and the additional assessment may be reversed in whole or in part; (2) submit a request for a reconsideration, with the further request for the case to be submitted to Appeals. At that point, if the Reconsideration examiner knows what he/she/it is doing, your client will be issued a letter of rejection - which contains your informal Appeals rights. The Appeals process may or may not be face-to-face. Best I can do.

[New York Enrolled Agent]

Davc is correct. But it does cost $100 to petition.

Cost is actually $60

Bertrans wrote: A TP can request that the filing fee for the petition to Tax Court be waived because of hardship - and the hardship does not have to be specified.

Not that simple - Rule 20(b) of the Tax Court allows for a waiver of the fee but the petitioner must establish " to the satisfaction of the Court by an affidavit containing specific financial information the inability to make such payment".

[bertrans]

I hereby formally surrender: ceremonial white flag to follow under separate cover.