Hi, I’m Jeff Fouts, a tax attorney located in metro Atlanta, with a nationwide law practice helping clients who have serious IRS problems. Here is another client case study from the 1,000’s of tax clients we’ve represented.
Client age: 50’s
Total tax debt: $17,000 to the IRS. This amount didn’t include the tax amounts from our previous representation of her which we’d already dealt with.
Details of the case: IRS was doing an automated “robo-audit”.
We were able to show the IRS their audit was wrong.
IRS resolution: We reduced the tax from $17,000 to $450
Synopsis of the Case:
An unmarried woman in her late 50’s from Savannah, Georgia recently contacted our firm to see if we could help her with another IRS problem. We had previously assisted this woman with an IRS CP2000 Matching Audit which is sometimes called a “robo-audit”. She had failed to report her stock sales and IRS wanted to tax her on the sales price of the stock because IRS had no way of knowing how much she had paid for the stock. We strongly recommended that she remember to report her stock sales on her future tax returns when this second representation ended. For one reason or another, she forgot to put the needed information on her tax return and she received another CP2000 Matching Audit letter, this time on a later tax year. The IRS letter said it looked like she owed the them an additional $17,000.
Our first step was get her to sign and give us IRS Form 2848 and IRS Form 8821 which allowed us to represent her before the Internal Revenue Service, and obtain important information from them.
We called the IRS to obtain documentation called Account Transcripts as well as Wage and Income Transcripts for the tax year being audited. We also requested that our client send us a complete copy of the original tax return she had filed.
We sent our client copies of her wage and income transcripts showing her stock sales and we asked that she contact her stockbroker to obtain a schedule (a list) of realized gains and losses. Once she provided this information to us, we were able to write a response to the audit showing the correct facts, which included our client’s basis in her stock, and her true gain or loss on the stock sales. We requested that IRS recalculate their proposed tax changes.
Well, the IRS recalculated our client’s proposed tax changes and they reduced the additional taxes to just $450 !
We also reviewed our client’s current year tax return to make sure it was correct, and thankfully this time she had correctly reported all of her stock sales.
Moral of this story? Always include all of your stock sales on your tax return. And if you forget one year and the IRS sends you a CP2000 Matching Audit letter, hire a tax professional to file a response for you.
I hope this important client case study has helped you understand the IRS a little better and how tax problems are solved. Chances are you have questions or concerns about your own particular tax problem. I encourage you to pick up the phone and call me. I can answer your questions. Over the past 20 years I’ve represented clients in all 50 states and 29 foreign countries, and I welcome your call. You can reach me at 1-888-995-6785 or by email at firstname.lastname@example.org. I’m Jeff Fouts and thanks so much for watching. Have a wonderful day.
TaxHelpAttorney.com Tax Law video No. 123323