In July 2022, TaxAudit member, Ryan, checked his mailbox to discover there was a letter from the IRS waiting for him inside. After opening it and reading through it, he learned that the letter was a CP2000 notice from the IRS stating that he owed them over $360,000 for some discrepancies on his tax return. Shocked and confused about how this could be true, he continued reading on to the end.
One issue the notice listed was that he had forgotten to report the selling of his house for the year in question. Ryan and his ex had agreed to sell their house together and split the cost 50/50, which caused some confusion while filing his taxes. Another issue listed on the notice was that he had withdrawn money from his supplemental retirement account and paid the money back in full just three months later. Because of this, the money defaulted to reflect as income. Additionally, he had moved several times, and never received any documentation from his retirement company indicating that he must include the money he had received on his taxes.
Concerned and confused by the notice, Ryan suddenly remembered that he had purchased Audit Defense for that year and contacted TaxAudit immediately. After getting in touch with TaxAudit’s customer service team, he was assigned a Case Coordinator. The Case Coordinator explained the process to him and helped him collect some of the documents they would need to help him with his case. This would include his identification, tax return, and the initial notice that he had received from the IRS.
After sending in the required documents, Ryan was assigned to his Tax Professional, Jessie. As soon as she had discussed the case with him, Jessie sent over a Power of Attorney form so that she could represent him to the IRS, and got to work immediately. Once she had thoroughly evaluated his case, Jessie was able to give Ryan a best-and-worst case scenario for his audit. The best-case was that he would only owe $1700 if the IRS accepted the response package she had put together. The worst-case scenario was that he would owe $292,340 if they were to agree to the initial notice from the IRS.
Jessie sent the response package to the IRS, and it was time to wait for a response. The IRS sent a letter informing Ryan that they needed more time to review his case, but eventually reached out after a couple of months with a proposed amount due of $2500. This was comprised of approximately $1700 in tax, due to the underreporting of the retirement loan with a small amount of interest, plus 10% additional tax of $700 for taking early distributions.
In the end, Ryan was thrilled that was that he was only going to have to pay $2500 as opposed to the $360,000 initially requested by the IRS! He had this to say about his experience:
“TaxAudit was worth every penny. I received very clear guidance and thorough assistance. My assigned tax professional kept me informed throughout the entire process using the easy-to-use application. They were professional and made me feel at ease. TaxAudit was able to resolve my issue with the IRS and clearly explained everything in detail. I would continue to use Tax Audit for any possible subsequent tax problems.”
If you ever receive a notice from the IRS and don’t want to face them alone, TaxAudit is happy to help! We strive to ensure that our members only pay what they rightfully owe. If you are interested in learning more about an Audit Defense membership, click here