For many, these encounters are stressful, confusing, and can last for months. But when you have a dedicated tax professional on your side, even the most daunting IRS challenge can be resolved optimally. Today, we share the story about a couple who found themselves in a months-long battle with the IRS over a misunderstood notary income exemption for the 2023 tax year. Thanks to the expertise and perseverance of their audit defense professional, their case ended in a complete victory.
The IRS Notice: A Math Error That Wasn’t
It all began when Joe and Natalia received a notice from the IRS stating that there was a “math error” on their 2023 joint tax return. The IRS claimed that a portion of Joe’s notary public income was subject to self-employment (SE) tax, despite clear instructions in IRS Schedule SE that notary fees are exempt from SE tax. The notice not only denied their exemption but also withheld a significant refund the couple was expecting.
They were confused and frustrated – but then remembered they had an Audit Defense membership for the tax year in question. They immediately reached out for assistance. They were first connected with one of our customer service representatives, Lexi, who took down the couple’s information and advised them on the next steps. She advised them not to contact the IRS unless otherwise advised. We would be there to represent them every step of the way.
The case was then assigned to one of our case coordinators, Roquell. She requested a copy of the IRS notice and the corresponding tax return and worked with the members to securely upload the documents into our system. She then assigned the case to Muhammad, who would be their tax professional throughout the duration of the case. He immediately reviewed the IRS correspondence, the couple’s tax return, and supporting documents. Muhammad quickly identified the core issue: the IRS had misclassified notary income, treating it as taxable when it was clearly exempt under IRC Section 1402(c)(2).
Building the Case: Documentation and Communication
Muhammad’s approach was methodical and thorough. First, he requested all relevant documents from Joe and Natalia, including their QuickBooks sales reports, TurboTax worksheets, and copies of every IRS notice received. Muhammad also ensured that they signed the necessary Power of Attorney forms allowing him to represent them directly with the IRS.
He then prepared a response to go to the IRS. This documentation was sent to our quality control department for approval, which then forwarded the information to our administrative services team to send out.
Over the next several months, Muhammad maintained regular communication with both the IRS and the couple. Every step was documented, from phone calls with IRS agents to additional written responses and faxed submissions. When the IRS failed to process mailed documents, Muhammad faxed the response directly to a helpful agent who agreed to assign the case personally. Muhammad’s persistence paid off—each time the IRS issued a new notice or failed to recognize the exemption, Muhammad responded with clear references to IRS instructions and the law.
Congressional Support and Strategic Advocacy
When the IRS delays continued, Muhammad advised the couple to contact their local congressperson for assistance. Together, they drafted a letter explaining the situation, referencing the specific IRS instructions and legal exemptions for notary income. The congressperson’s office sent an inquiry to the IRS, further supporting Joe and Natalia’s case.
Throughout this process, Muhammad’s expertise was evident. Muhammad explained complex tax law in plain language, reassured the couple during moments of doubt, and kept them informed at every turn. Muhammad’s advocacy extended beyond tax forms—Muhammad made sure that Joe and Natalia understood their rights, the audit process, and the importance of persistence.
The Optimal Result: Refund Restored, Case Closed
After months of diligent follow-up, the IRS finally acknowledged the error. The couple received a letter confirming that their notary income was exempt from SE tax, and their full refund—over $5,000—was deposited into their account. The audit defense team withdrew the Power of Attorney, closed the case, and sent a final summary to the couple.
Joe and Natalia were elated. In their closing survey, they praised Muhammad’s professionalism, communication, and mastery of tax law. “Muhammad kept us informed, responded to every IRS notice, and presented our case so there was no guesswork. Every document was based on the law, and Muhammad was the reason our case was successfully resolved. We couldn’t have done it without this level of expertise.”
Key Takeaways for Taxpayers
Know Your Rights: Notary public income is exempt from SE tax. Always check IRS Schedule SE instructions and consult a professional if you receive a notice.
Documentation Matters: Keep copies of all tax returns, notices, and correspondence. Accurate records are essential for defending your case.
Persistence Pays Off: IRS audits can take months. Regular follow-up and clear communication are critical.
Professional Advocacy: A skilled tax professional can make all the difference, turning a stressful audit into a successful resolution.
Why Choose Audit Defense?
This case is a testament to the power of expert audit defense. Our professionals don’t just fill out forms—they advocate for you, interpret complex tax law, and fight for the optimal result. If you’re facing an IRS audit or notice, don’t go it alone. Contact TaxAudit and let our team turn your tax challenge into a victory.
*Some names and identifying details have been changed to protect the privacy of the individuals. For more real-life audit defense stories and tips, visit https://www.audit-defense-reviews.com/.
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