Issue: IRS assessing $70,000 extra income
$$ at stake: over $31,000
Learn how we helped a client facing a hefty IRS bill due to a misunderstood cancellation of debt issue. Our timely response and strategic defense led to the IRS removing the debt from taxable income, resulting in no changes to the client’s tax return. A testament to our expertise and dedication in resolving tax issues.
When a client walked into our office with an overwhelming IRS bill of over $31,000, we knew there was more to the story. Upon investigation, we discovered that the IRS was assessing an additional income of $70,000, reported on a 1099-NEC form, which our client had not included in her tax return for the relevant year. However, our client vehemently denied having worked for or undertaken any projects with the company that issued the 1099-NEC. This raised a red flag – could someone have stolen her identity, worked for the company under her name, and used her Social Security Number to shift the tax responsibility to our unsuspecting client?
Determined to get to the bottom of this, we immediately sprang into action, gathering evidence to support our client’s claims. We meticulously presented our case to the IRS, demonstrating that our client had no involvement with the reported income. After a thorough review of our submitted documents, the IRS ultimately conceded, acknowledging that our client was not liable for the additional income. The IRS found that there was a payroll input error pertaining our client’s taxpayer identification number. The IRS later sent a letter to the client confirming that our client is not responsible for reporting the income. Mystery solved!
This outcome was a triumph for our client, as it meant no changes to her tax return and no financial burden resulting from someone else’s misdeeds. It was a relief for our client, who could now move forward with peace of mind. This success story is a testament to our dedication and expertise in navigating complex tax issues to achieve the best possible outcomes for our clients.