Dick Adams wrote:

- quote -

(snipped)

Let me re read this now, Dick. Are you telling us that YOU
do NOT do your own taxes?

Cheer$,
Harlan LUnsford, EA in LA

================================================== ==========
Modrator:
The last time I prepared a tax return was for the first
year Susan had to file after I met her. She got a huge
refund. It was part of my "See how it's in your best
interest to keep me around" program.
================================================== ==========

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"Red Scholefield" <redscho[at]bellsouth.net> wrote:

- quote -

I had the IRS come after me for $20,000 plus in unreported
income and they even added in a civil penalty. All because
there was a mismatch between a 1099 and the 'other income'
line. Nobody actually read the return. I forwarded the
notice to my tax guy and he sent them a letter and copied
me. When someone at the IRS called me, I faxed them a copy
of the POA and the letter. When they called me again, I did
the same thing. One day someone at the IRS actually took
the went through my return and, just like magic, all the
correspondence disappeared.

It really does happen that way.

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"Red Scholefield" <redscho[at]bellsouth.net> wrote:

- quote -

If you go to court and the court finds the IRS position was
unreasonable, you could be awarded costs and attorneys fees.

Stu

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Michael T Wing CPA <mtwingcpa[at]yahoo.com> blurted out
- quote -

Just because they're not supposed to be cited as precedent
doesn't mean they can't be referred to in other ways. For
example letter rulings are not supposed to be cited as
precedent, but I've seen courts cite them in ways that
undercut the IRS position.

Stu

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Michael T Wing CPA wrote:
- quote -

ELIGIBLE for e-filing.

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CPA Ed Zollars <ezollar[at]mindspring.com> wrote:

- quote -

Yeah, that was a great case...but it did change my life
(or at least my point of view). <g
Back to the case at hand, assuming that the problem was
initially caused by an IRS keypunch error, I'm surprised
that the many efile devotees here in the group haven't
beat the drum over this (ie: the likelihood that the
problem would have never occurred had the return been
efiled).

Of course, if the return HAD been efiled, then we'd
~really~ have something to talk about! <g
MTW

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Update: IRS data entry error.

The IRS seems to have an endless program loop in their
computer sending out letters regardless of any sent to them.

After a phone call attempting to get to Mr. Bergman on July
3rd, where I talked to another agent that said while it
appeared they had made a mistake from his computer data he
would have to look at my actual 1040 to confirm it, and not
to do anything until I heard from him - this is the letter
I received in response.

Department of the Treasury
IRS Internal Revenue Service
CHAMBLEE GA 39901

In reply refer to: 0XXXXXXXXXX03
July 22, 2003 LTR XXXXC
XXX-XX-XXXX 200112 30 000
Input GP: 07XXXX003 11XXX
BODC: NXXXX

XXXXXXXX & XXXXXXXXXXXX
XXXXXXXXXXXXXXXXX
XXXXXXXXXXXXX FL XXXX-XXXXX
Taxpayer Identification Number: XXX-XX-XXXX
Tax Period: Dec. 31, 2001
7XXXXXXX0

Dear XXXXXXXXXXX
Thank you for your response of July 03, 2003.

This letter doesn't extend the period of time you have to
file a petition, if you choose to, with the United States
Tax Court.

We need your signature on the "Consent to Tax Increase" at
the end of this letter to complete our action an your tax
account. Please sign the consent and send it to us. If you
filed a joint return, you and your spouse must sign the
consent.

If you have any questions about this letter, you may call
Michael Bergman between 7:00 AM and 8:00 PM EDT at
800-829-3009 for assistance.

Whenever you write to us, or wish us to respond to you by
phone, please give us your telephone number, including an
area code, the hours we can reach you, a person to contact,
and a copy of this letter. You may want to keep this letter
for your records.

Your Home Telephone Number Hours
Your Work Telephone Number Hours

Thank you for your cooperation.

Sincerely yours,
\

signature

Michael Bergman
Operations Manager, AUR

Document requested to be signed.

XXXXXXXXXXXX & XXXXXXXXXXXXX

Address

I/We consent to the immediate assessment and collection of
the increase in tax and penalties as previously shown on the
table Notice CP2000 plus any interest due. I/We will not be
able to contest, in the U.S. Tax Court, these changes for
the tax period shown in this letter unless additional tax is
determined to be due for this tax period.

Your Signature Date
Spouse's signature Date

Your Social Security number Tax period

**********
Repeated attempts to reach Mr. Bergman at the number listed
were fruitless. I was told that I could not reach him at
this number and they could not transfer me to him. Anyone
else had this problem trying to reach an IRS individual
identified as the one to call if they had questions?

Meanwhile another letter (7/21/03 Certified Mail) has been
sent along with a copy of 843 form Claim for Refund and
Request for Abatement to the IRS to the attention of Mr.
Bergman. All correspondencd to the IRS has had my phone
number and times to call.

Requested and received documents required to petitioning the
U.S. Tax court - deadline 9/30/03 so am working on that
aspect.

All of this for a simple IRS error in data entry???????????

Is postage, mileage and other expense incurred in dealing
with this deductible on my 2003 tax filing?

Red S.

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D. Stussy <kd6lvw[at]bde-arc.ampr.org> wrote:

- quote -

True, but they CAN be mentioned by the news media and members
of Congress.

MTW

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D. Stussy wrote:

- quote -

True, but considering this a fact based matter the idea that
it can't be used as precedent doesn't really matter.
Second, I suspect that, like memorandum decisions, we're
going to see some "slippage" on that over time. The mere
fact they are available to the public immediately after they
are issued means there is some pressure on the Tax Court not
to appear totally random in its decision making process.

Also, the decision will quite likely give a pretty good
outline of precedential cases and the underlying law the
court used to make its decision.

--
Ed Zollars, CPA
Phoenix, Arizona

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Michael T Wing CPA wrote:
- quote -

Only if appeals did NOT look at it previously. With all the
CDP cases, appeals in my area doesn't have time to look
again at cases they saw before the 90 day letter was issued.
Even so, with docketed cases, what appeals does is merely a
"recommendation" to counsel (which 90% of the time is
followed).

Some issues (especially those "tax protestor" types) never
see appeals.

- quote -

But STCs can't be used as precedents....

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Michael T Wing CPA wrote:

- quote -

I don't believe the IRS has any way to block publication of
a case in a situation. Heck, if mere embarassment to the
IRS was the issue, that dang roof case we were discussing
here a while back would never have seen the light of day
<grin> .

My own take is that, like you, I see this one being settled
fairly quickly because whatever "investment" the IRS might
have in the case, the Tax Court judge doesn't have it--and
isn't likely to have much sympathy for the IRS wasting
his/her time dealing with a case that should never have
gotten to trial.

--
Ed Zollars, CPA
Phoenix, Arizona

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D. Stussy <kd6lvw[at]bde-arc.ampr.org> wrote:

- quote -

But don't docketed cases normally get recycled to appeals
before being set for trial?

- quote -

The Tax Court now publishes small tax cases as "summary
opinions." I don't know if either party has the right to
block publication, or whatever.

MTW

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Michael T Wing CPA wrote:
- quote -

having an IRS Counsel's office in my "small town" of Los
Angeles....

If it were a matter JUST FOR APPEALS (i.e. not docketed),
then I would believe 90% chance of settlement (i.e. conceit
by the government) within the first five minutes. However,
once counsel gets their hands on it, the "obvious solution"
is almost never followed here. The problem is the 90-Day
letter - they now have an investment in protecting their
position....

- quote -

Only if NOT a small tax case. If it's filed as a STC, then
perhaps a motion to remove the designation is in order! :-)

-----
The IRS really has to wonder why certain filings for less
than $10K (and especially less than $2K) are filed as
regular cases.....

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"D. Stussy" <kd6lvw[at]bde-arc.ampr.org> blurted out
- quote -

And if you convince the judge the IRS position was
unreasonable, you may get them to pay your attorneys fees.

Stu

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Red Scholefield wrote:

- quote -

I think you need to to go trial on this issue. Apparently,
the IRS is unwilling to admit that THEY made the mistake and
that the return, as filed, had no such understatement. This
is not something that they will usually settle on. Once you
show to the Court that they are penalizing you for their
mistake, ....

Once the trial concludes in your favor, I also think that
you should write to your Representative in Congress and
inform him of this IRS abuse that you were subjected to.
Have you also contacted the Taxpayer Advocate's office?

About 10 years ago, I had a similar situation for a taxpayer
I represented (and was allowed to represent as an immediate
family member despite being an IRS employee at the time),
and I was able to get this same penalty abated in full. It
also resulted from an IRS processing error of the return,
and an erroneous refund was involved. Although the
situation did go to an appeals officer, it never had a
90-day notice issued.

- quote -

This part is generally true, but you should only be charged
interest from the point of the refund, not from the due
date. That is what is equitable....

- quote -

Do NOT sign. Your return already stated that exact amount
of "correct" tax. There is no way to separate an agreement
of the tax from the penalty on such a consent.

- quote -

Please remember that no matter what you do in the meantime,
it will not stop your 90 day clock for filing a petition to
the Court. You will probably have to file, but may be able
to settle (I doubt that) the case before trial.

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Michael T Wing CPA wrote:
- quote -

I think a better comparison would be an example of a
veterarian indicating how to remove an appendix.....

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Red Scholefield <redscho[at]bellsouth.net> wrote:

- quote -

I might suggest that you request a photocopy of your return
from the IRS. Use Form 4506 for this purpose and be sure to
check the box requesting a "certified" copy. This will
establish what you actually filed with them.

MTW

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Thank you Mr. Wing for your response.
You have stated the problem correctly.

My first letter to the IRA in response to "We are proposing
changes to your 2001 Tax return." where the amount they
claim was shown on my return (line was $X,XXX when in
actuality it was $XX,XXX. the numbers were identical except
for shifting of the decimal point on digit to the left.

Here is the exact text of my reply letter:

March 7, 2003

Internal Revenue Service
ATLANTA IRS CENTER
CHAMBLEE, GA 39901-0021
Attention Mr. Dale P. Lucas

Ref:
AUR Control Number: XXXXX-XXXX
Notice Number: CP-XXXX
Notice Date 03/03/3003
Form: 1040 Tax Year: 2001

Subject: Proposed Changes to 2001 Tax Return for Clifford L.
Scholefield & Marjorie G. Scholefield

We have reviewed the proposed changes and are in disagreement.

The attached copy of our 2001 1040 line 20b clearly states
our taxable Social Security Income as $XX,XXX.00 while you
claim we show $X,XXX.00 on our return. I believe you made a
decimal point error.

This error was apparently the reason we received a refund
check for $XXXX on or about June 1, 2003. At the time we
had no idea of why we received this refund, and it only
became obvious when we received your Proposed Changes
notice.

Now that we see the error that you made we are returning the
$XXXX that you sent us the result of your error.

In summary, our total tax for 2001 was $XX,XXX while we paid
an estimated tax of $YY,YYY ($ZZZZ tax withheld plus
$WW,WWW -copies of checks attached), which left a refund due
of $U,UUU , which we applied to our estimated tax for 2002.

I hope this settles our account with the IRS for 2001.

Sincerely,


Clifford L. Scholefield
SSN __________

Marjorie. G, Scholefield
SSN __________

Attachments:
1) Form 1040 for 2001
2) Copies of check numbers 1451, 1502, 1562 and 1657
3) Copy of IRS refund statement
4) Check No. 3001 for the sum of $YYYY.00 payable to United
States Treasury


IRS response:

Department of the Treasury
Internal Revenue Service
4800 BUFORD HWY
CHAMBLEE GA 39901

In reply refer to: 07459XXXXX
Apr. 04, 2003
LTR XXX-C SSN 121-XX-XXXX 20XXXX XX XXX
Input DP: 07XXXXXXX01 0XXX9

CLIFFORD L & MARJORIE G SCHOLEFIELD
4138 NW 33RD PL GAINESVILLE FL 32606-6156384

Taxpayer Identification Number 121-XX-XXXX
Tax Period: Dec. 31, 2001
Tax Form:1040
6XXXXXX5

Dear Clifford L & Marjorie G Scholefield: Thank you for your
correspondence of Mar. 07, 2003, and your payment of
$X,XXX.00.

Our notice appeared to be correct. We cannot waive the tax
penalty in the amount of $XXXX.00 because the returning
payment was not made on time.

We reviewed the information you sent to us. It didn't state
the reasonable cause necessary to waive the accuracy related
penalty due to substantial understatement of tax. Please pay
the full amount you owe as soon as possible to avoid
additional interest charges.

The law requires us to charge interest on unpaid tax from
the due date of the return to the date you pay the tax in
full. The law doesn't allow us to reduce or eliminate
interest based on reasonable cause.

We need your signature and the "Consent to Tax Increase" at
the end of this letter to complete our action on your tax
account. Please sign the consent and send it to us. If you
filed a joint return, you and your spouse must sign the
consent.

Please use the enclosed envelope to send your signed consent
or explanation to us by Apr. 30, 2003. If we don't hear from
you within that time, we will continue to process the
proposed changes to your return based on the information we
currently have. If there is an amount you owe, we'll
continue to charge interest until you pay the amount you owe
in full.

If you have any questions about this letter you may call
Dale Lukas between 7:00 AM and 8:00 PM EST at 800-829-3009
for assistance. Whenever -you write to us, or wish us to
respond to you by phone, please give us your telephone
number, including an area code, the hours we can reach you,
a person to contact, and a copy of this letter. You may want
to keep this letter for your records.

Thank you for your cooperation.

signature
Dale P. Lucas
Chief, Document Matching Branch

*******
I responded to this letter with a letter, attention Dale
Lucas (my phone number and e-mail address listed) on April
7, 2003 essentially repeating the first letter and with
relevant attachments. I ended with an added statement, "If
this explanation does not satisfy our account for 2001 with
the IRS please tell us what additional documents are
necessary to establish "reasonable cause".

I have had no calls from Mr. Lucas. I have not been able to
get in touch with him via then number listed.

I had briefly considered just not mentioning the refund (as
you advise) in the reply letters, and just point out that my
records indicate I did in fact pay the tax owed. Let them
find the refund later. But to me that didn't seem right,
since the "suggested adjustment" exactly matched the
refunded and essentially explained why I had received it. I
felt it was prudent to return it as soon as possible.

Your interest in this case is appreciated. I have posted the
details here in hopes that it will be of some help to others
that may find themselves in what seems at first a very
simple situation, but if not handled correctly (the correct
version being somewhat obscure to those not in the tax
profession) can become rather time consuming in getting
resolution. I have had a number of other inputs that state,
"Just simply tell the IRS the facts with supporting
documentation - and everything will work out". So far you
can see a "the facts" do not seem to have brought this any
closer to resolution in nearly 5 months.

Red Scholefield T.I.T. (taxpayer in training)

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D. Stussy <kd6lvw[at]bde-arc.ampr.org> wrote:

- quote -

In one of the cases I'm referring to, the client entered
into an installment payment agreement fro the amount of the
deficiency. He made minimum payments for about a year, at
which point we filed an amended return and he got
substantially all of his money back. (Results might not be
typical...your results may vary <g> .)

- quote -

True, the taxpayer can still elect to take the case to
court. But, for the most part he can do that on HIS
timetable rather than under the "90 day" gun.

Since I'm not an attorney, I favor keeping cases within the
purview of ADMINISTRATIVE remedies whenever possible.

MTW

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D. Stussy <kd6lvw[at]bde-arc.ampr.org> wrote:

- quote -

True, but they can't "share" that knowledge with their
fee-paying clients without likely triggering a UPL issue.

I know quite a bit about having my appendix removed, but I am
not licensed to offer medical advice for a fee.

MTW

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