IRS Audited my 2004 return

[Holden97]

It sounds like you received one of these. If there was a number like "CP 2000" on the notice, that's definitely what you received.

Unless the adjustment was very well thought out and explained the law that the IRS thought applied, I'd consider limiting your repsonse to "In reporting my income on the originally filed 1040, I followed the guidance provided by the IRS in publication 525 and reported my gambling winnings on Form 1040, line 21. Please see the enclosed copy of the 2004 Publication 525, page 29, that includes these instructions." You can get the publication here.

It's up to you what strategy you go with, but it seems like less is more in this case - consider limiting your response to the issues raised by the service center. The people at the service center that will receive your response aren't equipped with the relevant knowledge, case law, etc. to deal with your adjustment, they are just working with ratios fed to them by a supervisor/computer program.

[2ndGoat]

[ QUOTE ]
It sounds like you received one of these. If there was a number like "CP 2000" on the notice, that's definitely what you received.

Unless the adjustment was very well thought out and explained the law that the IRS thought applied, I'd consider limiting your repsonse to "In reporting my income on the originally filed 1040, I followed the guidance provided by the IRS in publication 525 and reported my gambling winnings on Form 1040, line 21. Please see the enclosed copy of the 2004 Publication 525, page 29, that includes these instructions." You can get the publication here.

It's up to you what strategy you go with, but it seems like less is more in this case - consider limiting your response to the issues raised by the service center. The people at the service center that will receive your response aren't equipped with the relevant knowledge, case law, etc. to deal with your adjustment, they are just working with ratios fed to them by a supervisor/computer program.

[/ QUOTE ]

What I received was "Letter 525(SC/CG) (Rev. 2-2005)" with the proposed adjustment, form 4549-EZ (Income Tax Examination Changes), Schedule SE (Computation of Self-Employment Tax), From 6251 (AMT Computation, which comes out to 0), A tax interest computation form (with no form number that I see), and Form 886-A (Explanation of Items).


Holden, your strategy (omitting case law in favor of a more basic explanation) may be best, thank you for the suggestion. If that fails then I suppose I could resort to the more detailed information.

2nd

[Holden97]

[ QUOTE ]
[ QUOTE ]
It sounds like you received one of these. If there was a number like "CP 2000" on the notice, that's definitely what you received.

Unless the adjustment was very well thought out and explained the law that the IRS thought applied, I'd consider limiting your repsonse to "In reporting my income on the originally filed 1040, I followed the guidance provided by the IRS in publication 525 and reported my gambling winnings on Form 1040, line 21. Please see the enclosed copy of the 2004 Publication 525, page 29, that includes these instructions." You can get the publication here.

It's up to you what strategy you go with, but it seems like less is more in this case - consider limiting your response to the issues raised by the service center. The people at the service center that will receive your response aren't equipped with the relevant knowledge, case law, etc. to deal with your adjustment, they are just working with ratios fed to them by a supervisor/computer program.

[/ QUOTE ]

What I received was "Letter 525(SC/CG) (Rev. 2-2005)" with the proposed adjustment, form 4549-EZ (Income Tax Examination Changes), Schedule SE (Computation of Self-Employment Tax), From 6251 (AMT Computation, which comes out to 0), A tax interest computation form (with no form number that I see), and Form 886-A (Explanation of Items).


Holden, your strategy (omitting case law in favor of a more basic explanation) may be best, thank you for the suggestion. If that fails then I suppose I could resort to the more detailed information.

2nd

[/ QUOTE ]

I revise my comments. A 4549 is issued when an audit is complete. Are you sure there wasn't some earlier correspondence notifying you that you were under audit?

Did the cover letter from the IRS say that you have 30 days to respond?

Also, the IRS exam agent should have given a detailed legal explanation of the changes.

It seems like there are certain facts missing here.

[2ndGoat]

[ QUOTE ]

I revise my comments. A 4549 is issued when an audit is complete. Are you sure there wasn't some earlier correspondence notifying you that you were under audit?

Did the cover letter from the IRS say that you have 30 days to respond?

Also, the IRS exam agent should have given a detailed legal explanation of the changes.

It seems like there are certain facts missing here.

[/ QUOTE ]

Lots of poker. Forgive the brevity.

No previous letter from IRS.

Was given 30 days.

Dear Taxpayer:

We've enclosed an examination report explaning our proposed changes to your 2004 federal income tax return(s). Please review the examination report and let us know if you agree or disagree with the proposed changes.

etc.


2nd

[AAAA]

I agree with holden. Do not volunteer anything, because it can bite you. Especially if you did not use Schedule A, you are in a good position to say that your deductions didn't warrant it.