This is a synopsis of this person's case file.
She did contact us on July 9, 2009 to report the notice that she received from IRS regarding her 2007 tax return. We left a message for her to call us on July 14, 2009 since we had not yet received the notice and the tax return. She did return the call and informed us that the documents had been mailed. We did receive them in that day's mail. On July 16, 2009 we tried to call her but her mailbox was full so we sent an email as well stating that one of the documents she had emailed to us needed a password to open it. On July 20, 2009 she sent us the password. On August 4, 2009 we left a message requesting a call back and she returned the call that same day. This call lasted 55 minutes and all of the many problems with this tax return were discussed in detail, not just those listed in the notice from IRS. On August 5, 2009 another phone message was left requesting a callback. An email was received from her that same afternoon and shortly thereafter she returned our call as well. At that time the additional correct balance due on her tax return was discussed at some length and she stated that she understood the issues. Later that same day we received an email from her asking that we also request abatement of the penalties and interest being assessed by IRS as well. We had previously explained that the interest would not be abated and that this branch of the IRS typically ignores any request for abatement of the penalties, but we would include that in our correspondence. On August 6, 2009 an email was sent to her advising her that the correspondence had been sent to the IRS and that typically it would take eight to twelve weeks for them to respond.
On September 14, 2009 we received an email from this person stating that she had received the typical stall letter from the IRS saying that they had received the response in August but would be unable to respond for another 45 days. In this email she also inquired about paying the balance due now rather than waiting for the IRS to respond. The same day we responded to her email and answered her questions and we also left a phone message in response to her voice mail left over the weekend. On October 15, 2009 we received a new notice from the IRS with an additional small error on their part but making the changes properly for most of what we had submitted; as expected the request for penalty abatement was ignored. On October 16, 2009 we left a phone message requesting a call back. She did return our call and we did discuss the new notice. She said that she had made the payment for the balance due that we had projected and we did verify that the payment was posted to her account at IRS. She did ask again about the penalties and interest and we did again explain that interest is not subject to abatement unless the IRS has made some egregious error and that she did not qualify for abatement of the penalty either. We also explained that we would not request abatement of the penalty again as she did not qualify for abatement under the stringent IRS rules for abatement. Later that same day she sent us another email complaining again about our refusal to request abatement again and stating that our agreement says that the taxpayer does not need to have any contact with the IRS; yet now we are telling her that she has to request this abatement herself. She also requested a copy of the correspondence that we had sent to IRS and a sample letter to request abatement of the penalty and asked if we had a survey that she could respond to about her experience with TaxResources, Inc. We responded to her email the same day explaining again the issue of interest and penalty abatement. We also explained that we had requested the penalty abatement in our correspondence to the IRS but as expected, they ignored the request. We did ask if she wanted us to respond to the additional calculation error that the IRS had made and we provided her with the manager's email for any complaints or suggestions she might have regarding our services. We did enclose copies of the correspondence we had sent to the IRS and the sample letter that she had requested as well.
On October 19, 2009 she sent us another email complaining about the penalty abatement and requesting that we do follow up with the IRS regarding their calculation error and again requesting copies of the correspondence that we had sent as well as the sample letter. These items had already been sent to her. Later this day she sent another email again requesting that we follow up with the IRS regarding their calculation error. Also on this day the manager received a voice mail that had been left for her the Friday before, after she had left for the day. This voicemail stated that the representative assigned to her case has not been responsive to her and that the rep is breaking the Tax Resources' contract by telling her that she, the taxpayer, would have to ask for the penalty abatement herself. As tax professionals we cannot submit a frivolous request for abatement of interest and penalties for any taxpayer and we certainly cannot elevate this to the level of IRS Appeals. We would be subject to sanction from the IRS' Office of Professional Responsibility.
On October 20, 2009 we received a very lengthy email complaint that was sent after hours the day before. In this email, she states that she called on Friday; she did after the manager had left for the day, and that she had called yesterday, we have no record of receiving this call, and that she has received no return call as of 5pm central time today. She further states that our rep has been unresponsive to her and that she believes that she has not been adequately or fairly represented by this rep from the time the IRS notice was first received on July 6, 2009 until now October 20, 2009. She further believes that her case was not given a high priority and that we have failed to defend her to the highest level of appeals. She then states that she took up this matter with a CPA who came up with entirely different numbers and then she had to pay him for this service. She then inquired as to whether we will respond to the IRS' calculation error and requested that we pay the bill for the CPA. She then called us again later this same day and this matter was escalated to the Tax Services Manager.
It is our policy upon receiving a complaint to have the entire case file reviewed with all of the parties involved before we respond to a complaint. This matter was reviewed by the Tax Services Manager and a call was made to this taxpayer on October 20, 2009. He explained that what the representative had done was in fact correct and that we were following up on the IRS calculation error as well. Though not normally part of our service he did request the tax return prepared by the CPA so that we could determine why his calculation was different than ours and thus be able to explain this to her. She said that she would send it that night. She did ask if there was an additional charge for this review since the CPA had charged her and we assured her that there would not be any additional fees. He again explained the limited circumstances under which penalty and interest can be abated and she said that she had already sent her letter requesting this abatement. He explained that this was fine but we as tax professionals could not argue that matter any further. He then confirmed with the rep that the additional correspondence to IRS regarding the calculation error was in progress. This correspondence was submitted on October 22, 2009 and an email was sent to the taxpayer to let her know that it had been sent.
On October 21, 2009 this taxpayer sent an email to the Tax Services Manager thanking him for his call yesterday and asking for our mailing address so that she could mail the tax return prepared by the CPA for our review. He responded immediately clarifying what needed to be sent and giving her the mailing address and his email address if she preferred to scan it. Later that day he sent her another email advising her that he had received and reviewed the tax return prepared by the CPA and suggested that they schedule an appointment to discuss it as there were too many changes to list. She sent an email in response suggesting the following morning for the call and further stated that the CPA took her Forms W-2 and did some calculation by hand. The manager responded shortly after that confirming the time and explaining that the Forms W-2 were not the issue and that they were properly reported by her to begin with and these numbers the CPA did not change. The manager also stated that she had originally reported interest income on the Form 1040, page 1, line 8a Taxable Interest of $9745 and on line 8b Tax-exempt Interest of $187. There was additional interest for line 8a of $161 which was noted on the original notice from the IRS that she had previously agreed that she had omitted in error. The CPA has listed $9,662 on line 8a and $1343 on line 8b. There were numerous other changes, some higher, some lower, some reported in different places than on the original return. With all the various changes there was still only a difference of $263, not $1,000 as she has stated in her complaint, in the balance due and we cannot determine where he got the different numbers from.
This taxpayer sent another email shortly thereafter thanking the manager for his reply and requesting that he review the rest of the CPA's return and again stating that she did not feel that she had received the quality of service that our company promises. The manager responded shortly stating that he would review the rest of the tax return prepared by the CPA and that they would discuss it in the morning.
She called in the morning and the case was discussed for an hour. The original correspondence that was submitted to the IRS regarding the issues that they listed on their notice was correct. None of the other problems on the tax return were addressed in our correspondence. The tax return prepared by the CPA had numerous other changes on it. He did not include all of the interest income that was reported to the IRS by the payers and he improperly reported the non qualified stock options both in the wrong place and with the wrong numbers. The CPA took several deductions that are not allowed, such as for clothing, but he recategorized them as Miscellaneous Other Expenses and took them anyway.
In summary, the tax return prepared by the CPA was incorrect and the work was unnecessary. TaxResources is not responsible for this fee and the amount paid to the IRS was basically correct. The penalty abatement was requested and denied. TaxResources provided the appropriate services for this taxpayer's case and is not liable for a refund of fees, payment of tax, penalty, or interest. Her unhappiness with tax law and her mistakes made on a self-prepared return do not indicate that TaxResources did anything but provide appropriate representation services.
Tax Resources, Inc.
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