IRS CP2000 Response Generates $149,000 in Savings!

Our client came to us with an IRS letter dated March 15th, 2015 indicating there was a potential assessment of $149,000 on the 2012 tax year. The taxpayer was confused by the IRS letter as she had not made $149,000 in 2012. She did however sell her primary residence and therefore had a potential taxable event in 2012. We needed to investigate her IRS situation a little further to be sure the IRS letter was correct.

We had the taxpayer send us documentation showing the sale of the home and the transactional piece behind selling the home, closing costs, mortgage payoff’s, title insurance, etc.  We also took a look at her original basis in the home as well. She actually didn’t make much of a profit, and after further examination, she qualified for the $250,000 exclusion relative to the sale. All the IRS letter needed us to do was report the transaction accurately in our response.

We filed a response with the IRS and used a copy of the IRS letter prior to April 15th of this year and made sure the IRS knew about the transaction as well as the numbers behind it. We finally heard back on our response and were successful in getting $149,000 (plus interest and penalty) completely abated for our client. Needless to say she was very relieved she didn’t have to pay the back tax bill.

If you or someone you know receives a letter from the IRS indicating there is a larger balance due, and you’re not sure why, give us a call at 720-398-6088. We will be pleased to assist!