Holding The IRS Accountable In a Tax Audit

Below you will find a case where individuals proceeded to handle their IRS tax audits on their own. Going to the IRS office without a tax lawyer resulted in the agent taking advantage of the taxpayer who didn’t know the guidelines of the IRS, like most men and women. The taxpayer realized the issue was becoming more complicated and contacted a Tax Litigation Associates tax expert team for IRS tax relief. After reviewing the client’s case, our company found many errors. As you can see, we then sent the IRS agent a personalized letter stating the errors that were made and asking the agent to correct the mistakes. Tax Litigation Associates locks the IRS in by demanding they follow the rules, regulations and laws that congress has passed to protect taxpayers.

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April 20, 2009
Internal Revenue Service
Small Business and Self-Employed
Group Manager
2888 Woodcock Blvd.
Atlanta, GA 30341
Re: W—— & C—– C——
SSN: ***-**-****
Tax years: 2006 & 2007

Dear Group Manager,

We have recently been retained by the above-named taxpayers to represent them before the Internal Revenue Service.  Our clients have forwarded to us your letter dated April 2, 2009, in which you mentioned that the audit of tax years 2006 and 2007 has been completed and you asked the taxpayers for a response as to whether they agree or disagree with your proposed adjustments.

First of all, we thank you for agreeing to extend your response deadline until April 23, 2009. We have received a substantial amount of information and records from the taxpayers, but we have been unable to reconcile this information with your adjustments.  Can you please provide us with a copy of your examination report? As you know, this information fully explained how you arrived at the proposed adjustments and what audit techniques you used for each of issues adjusted.

We ask that you provide us with additional information concerning the following issues:

Commissions and Fees (2007)

Although your April 2^nd letter indicated that there was an adjustment to Commissions and Fee in the amount of $12,338, but was not included in your explanation of items, Form 886-A. What information was reviewed to audit this item? Can you provide us with a listing of the items that make up the total disallowance (names, dates, and amounts)?

Sch C2 – Utilities (2006 & 2007)

Your report stated, in part, that the “amounts spent as part of general plan of maintaining, reconditioning, improving or altering your property are not deductible as repairs and should be capitalized…”

Can you please provide us with a listing of the items that make up the total disallowance (names, dates, and amounts). We would like to review your determination that these expenses were not currently deductible. Although we won’t agree with your determination until we’ve reviewed all of the facts, we request that you now allow for an additional deduction for depreciation, since you’ve determined that the expenses are to be capitalized by the taxpayers.

Sch C2 – Interest – Mortgage (2006 & 2007)

Your reported stated that the expense was disallowed as a deduction from gross income. Please send us a listing of these expenses and indicate the property to which this mortgage interest applies. As you know this expense is a properly deductible item and we ask that you allow the corresponding adjustment.

Sch C1 – Utilities (2006)

Your report stated that “your return has been adjusted because you deducted the same item more than once on your tax return.” Can you please provide us with an additional explanation as to where these expenses were deducted on the tax return?

Sch C2 – Supplies (2006)

Your report stated that the “deduction has been adjusted to the amounts verified.” Can you provide us with a listing of the items that make up the verified and disallowed items (names, dates, and amounts)?

Sch C2 – Repairs and Maintenance (2006 & 2007)

Your report states that the “amounts spent as part of a general plan of reconditioning, improving or altering your property are not deductible as repairs.

Can you please provide us with a listing of the items that make up the total disallowance (names, dates, and amounts). We would like to review your determination that these expenses were not currently deductible. Although we don’t agree with your determination until we’ve reviewed all of the facts, we do suggest that you modify your report to now allow for an additional deduction for depreciation, since these expenses would be capitalized by the taxpayers, if determined to be part of a general plan of reconditioning, as you’ve indicated.

Sch C1 – Car and Truck Expenses – Primary (2006)

Your report states the “we have adjusted your travel or transportation deduction as shown.” Please provide us with a listing of how you determined the disallowance. We also request that you provide us with an analysis of the mileage driven by the taxpayers and how your computed the nondeductible, commuting mileage.

Sch C2 – Car and Truck Expenses – Secondary (2006 & 2007)

Your report did not provide an explanation of this adjustment. Can you please provide us with a complete breakdown as to how this adjustment was calculated?

Sch C2 – Expenses for Business Us of Home (2006 & 2007)

Your report did not provide an explanation of this adjustment. Can you please provide us with a complete breakdown as to how this adjustment was calculated?

We request that you provide additional time for all of us to review your proposed adjustments and for us to provide you with additional information and evidence that we will gather from the taxpayers. Although our goal is to reach a resolution at your level, we will consider recommending going to the Appeals function if necessary. Our interest is to gather all of the facts you may need to make a final determination.

Respectfully yours,

Jeffrey Galante
Authorized representative

cc:   W—— & C—– C——