I was assigned a case in October of last year, where my members had received a notice from the IRS citing a miscalculation of Education Credits and assessing a bill of over $2,000. Bill and his spouse, Linda, had two sons attending college. The miscalculation appeared to be due to some education fees that had been paid on their behalf. I explained that we would need all Form 1098-Ts, student transcripts for both sons, canceled checks, and bank statements to aid us in verifying their claims. In the process of gathering these documents, they received another IRS correspondence assessing a failure to pay penalty and interest charges. Considering what they had already paid towards their taxes and what they were being asked to pay again, this notice understandably added friction to an already frustrating situation.
We drafted a thorough response, discussed it with our members, and sent it to the IRS in early November of 2018. Due to the IRS shutdown, what typically takes eight to twelve weeks to process took significantly longer. We reached out to the IRS for status updates and checked in with our members regularly. Most days there wasn’t much to report, except that we were still waiting. It wasn't until the end of April that we received a response. The IRS had reviewed our response and ruled in favor of our members. Bill and Linda were only responsible for paying a late filing fee of $50. Needless to say, they were thrilled with the outcome.
We sent a closing letter to Bill and Linda reiterating the outcome of the audit and assuring them that if any problems with the return were to arise in the future, we would be there to help them. To my surprise, Bill responded with a message of gratitude. He explained that for years, he and Linda had paid the annual fee for audit defense, often wondering if it was necessary. He explained that the service and representation he received had cleared up any doubts.
**Some names and identifying details have been changed to protect the privacy of individuals.
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