IRS and State requests

MISTAKES ON THE RETURN

• Missing RSU/stock option income. Many taxpayers file their return without properly accounting for income from their RSU or stock options. They’re notified of this omission by a CP2000 or other similar notice. The CP2000 is the most common notice and may also be received for any of the situations below.
• Missing 1099-K or 1099-NEC. If you run an online business or make a few sales on Ebay, Etsy, or similar platform and don’t report the transaction on your return, you will be notified of this mistake. Even if you didn’t make a profit on the transaction, you still have to report it. The IRS and state(s) do not know that your business wasn’t profitable unless you tell them so by filing a schedule C along with your schedule of expenses. If this isn’t done, you’ll receive a letter and a request to amend the return.
• Rollover or Withdrawal from a 401K or IRA: Taxpayers frequently miss submitting 1099-Rs, K-1s, 1099-DIVs, and other forms pertaining to retirement funds.

FAILURE TO FILE A RETURN

The IRS and most state tax offices send letters to individual taxpayers when they believe you should have filed a return. They also send them to business owners for the same reason. Even if your business had no activity, you must still file tax forms for the IRS and most states. Furthermore, if you file these zero-activity forms after they’re due, you’ll have to pay a penalty. Please contact us on how to resolve this matter so we can prevent you from incurring any additional expense.

AUDIT/REQUEST FOR MORE INFORMATION

The IRS occasionally audits taxpayers, especially ones with aggressive deductions, schedule C businesses (freelancers, sole proprietors, single-member LLCs, etc.). They normally ask for receipts or other backup paperwork for expenses so try to get as much documentation together as you can to substantiate your deductions.

If you have issues with any of the above, please scan all of the pages of the letter you’ve received and send it to us. We assist clients remotely throughout the United States and in dozens of nations globally. So we’re confident that wherever you are we can work with you. As soon as you contact us, we’ll try to help you right away.