Hello all: I need help dealing w/the IRS. I received a notice of deficiency in the mail. Can I use the validation techinique with them? I actually received the first letter the same day as my 341 hearing! They say I under-reported and now I owe them $900. I have not signed any agreements to set up payments. I just want them to prove that I made a mistake. I have moved and in the process lost my tax papers for that tax year(2000). Can anyone offer advice on dealing the Uncle Sam?
I believe you can write them and they will explain where they came up with the calculation. Since you lost your papers you don't have much of a leg to stand on, but if they explain where you calculated incorrectly, maybe you will get lucky and be able to track down copies of that item or items. They will also provide you with copies of the forms you submitted. Just remember, they are charging you penalties and interest from day one. Make a phone call and get the ball rolling before you owe them $1800! Been there done that - still trying to get a tax lien removed that was paid OFF in 1992.
As an Enrolled Agent this is the type of problem I deal with every day. 1: File Form 4506 and request a transcript of your 2000 return. You can get taht form off the IRS web site. If you want a copy of the actual form you signed, use the same form but it will cost you $23 for it. The transcript is free. 2: The FDCPA does not apply to the IRS, so Valiation letters are useless. 3: If your bankruptcy is still before the Court, the Automatic Stay DOEs apply to the IRS Collection Division. It does NOT apply to the Examination Division - meaning they can audit you while you are in Bankruptcy, just cannot collect. 4: Your post makes the problem sound like it's a CP-2000 Document matching issue. You could contact IRS Customer Service at 1-800-829-1040 and ask for another copy of the original CP-2000 letter. This letter (4 pages long) will detail which document the IRS is saying they could not match up on your tax return. If it's there then you have a correspondance battle. An example would be a 1099-MISC showing Nonemployee Compensation. IRS would look for that on Schedule C, many taxpayers just put it on Line 22, Other Income. If tat's the case, then you just owe the Self-Employment tax, not the Income tax on taht money. 5: I would move on this quickly. 90 days from the Notice of Deficiency date your appeal rights expire.
Also be aware that your penalty and interest will be increasing daily even though you ask or question anything! So do not delay! If you send anything in writing or send money remember to send it CRRR. Good Luck, Michelle
