Return Errors

PREP STEPS FOR RETURN ERRORS

Math or Return Errors

If the IRS wants you to perform some correction to your return before they will process it, they often send Form 3531 or Letter 143C with their requests for action. The most common task they request is a simple signing of the return. But, sometimes their requests are impossible to follow or complete. In that case, you will likely have to re-file the return.

For each of the following notices the IRS is telling you they think you made errors on your return, whether they be math errors, failure to include an item, or filing too late.

Sometimes, the IRS will unilaterally change your return and send you a letter similar to Notice CP16T, Notice CP52, if you are self-employed or Notice CP112, for a business. To contest these Notices you'll have to request an Audit Reconsideration. Please read this article & contact our office.

Each notice requires a different, but specific response, depending on your individual circumstances and the evidence. Our goal is to submit the proper evidence on the correct forms so you will receive a Notice CP2005 or a Letter 1802C telling you that you do not owe any more taxes!

So, if you complete the above Return Errors Prep Steps prior to your consultation with Mr. Hopkins, the meeting will be much more productive & your issues will more likely be resolved at that time. See "Responding to IRS Math Error Notices".

Where to Respond

In the Top Left-Hand Corner of each document is the address to send a response to the IRS. Please send all correspondence to the IRS by certified mail or overnight so you have the receipt.

NOTICES CP2000, CP10, CP11, CP12 & CP16

The IRS uses these forms to propose changes to your return when their records are different than what you reported on your return. The IRS has one or more documents that are different than what your tax return showed and the IRS wants you to explain.

On page 2-3 of the notice the IRS lists all the records they show for you & the proposed adjustments. You may also obtain your Wage & Income Transcripts. Look carefully at the items & issues stated by the IRS.

CP2000 Strategies

Your strategy to contest these IRS notices will depend on the issue in question and your evidence, as the tax lawyer will explain. But, usually it is best to file an amended return than to send explanation letters to the IRS because an amended return initiates a process to which the IRS must respond. Letters tend to be misinterpreted or lost.

Because you are filing an amended return, you have a chance to refute or offset the IRS proposal but also to come up with other, new claims. Since it is an amended return you are allowed to advance new claims.

The IRS cannot collect from you at this point, so don't worry! However, you only have 60 days to challenge the IRS on math errors so please come in quickly! Since you simply need a reconciliation of your records with the IRS you should only need one consultation. Let our tax attorney prepare an Action Plan for you.

Other Error Notices

Beware of the various Notices CP13. (CP13, CP13M, CP13R) These notices tell you that there's no balance due nor a refund so you are lulled into believing nothing should be done. In fact, you may be entitled to a refund. So, don't depend on the IRS but instead investigate the issues & see if you should contest this notice.

Also be vigilant if you get Notices CP51 or CP52.(CP51A, CP51B, CP51C, & CP52) These notices say the IRS has unilaterally adjusted and calculated your income tax.

IRS Letter 2531 is essentially the same notice and your tactics and response will be the same, too.

As you can see, it is vitally important to fully investigate to make sure these notices are correct. Any unilateral assessment will not be to your advantage. Don't depend on the IRS!

NOTICES CP21 & CP22

Notice CP21A & CP22A are supposedly to make the corrections you requested with an amended return (Form 1040X) or with information you provided. But, often times, this may be the first notice you have received about this problem. That is usually because the IRS does not have your correct address.

The IRS only is required to send notices to your "last-known address", which is the address shown on your last-filed return. But, they are allowed to find your real address when they want to collect from you. Therefore, it is important to maintain your correct address with the IRS so you continue to receive all their notices & can timely respond. Complete & send Form 8822 by certified mail to correct your address with the IRS.

If this was the 1st notice you have received about this problem you need to call the IRS and request your "Wage & Income Transcripts". Then, you can determine what records in your file have caused this issue.

If you agree with the Notice then you can simply pay the amount. If you can't pay, please follow our "Collections Prep Steps". The next Notice you will receive will be a Notice CP14 - a bill.

Notice CP21E & CP22E are for corrections based on an audit. After reviewing the forms, you may agree with the IRS. But if you do not agree, then you'll either have to file an Appeal or file an amended return, whichever is appropriate.

If you write to the IRS office shown in the notice & they do not respond you may have to Appeal the decision or seek intervention of the Taxpayer Advocate.

NOTICES CP23 & CP24

These forms notify you that the IRS records for estimated taxes are different than what you reported on your return. This might be because the IRS applied your payment(s) to a past due year instead of the current year.

Sometimes, the IRS has disallowed a payment carryover designation from one year to the next.

In any case, if you disagree with the IRS notice you must get all records you have of payments to the IRS with your tax returns and we'll get the IRS file. By comparison, we can find a solution!

LETTERS 105C & 106C

These letters are to deny you a claim for refund. When you file a return, you declare your tax and any refund you are due. That is a claim for refund.

The IRS denies most claims because of the 3 year limitations period. They will use Letter 106C if they are partially denying your claim.

If the reason for your claim denial is not apparent or you have a meritorious case, please contact us so we can arrange an Appeal or possibly a US District Court case.

Lost Documents

An IRS inquiry may be scary because you didn't keep your records or your records are lost or unavailable. However, unless you only used cash, bank records & credit card records can be re-created. Also, even if cash was used, affidavits can be obtained or we can use industry standards to arrive at a reasonable figure. See Lost Documents.

But, please DO NOT fill out any questionnaires or respond in writing to the IRS until you've met with Mr. Hopkins. What you say in writing to the IRS WILL be used against you!

We'll prepare an Action Plan for you that's specific for your needs & circumstances.

 

 

 

 

*Wage & Income Transcripts are computer-generated IRS records of all the forms sent to them about you from your job, your bank, your mortgage company, etc. The formal name for this document is the Informational Return Master File Index (IRMF) but if you just ask for your Wage & Income Transcripts they will send you the IRMF.