Last Year's Taxes - IRS Made $2,100 Mistake- Reversed!

I wanted to let notaries know that for 2020 the IRS accused I made an error on my taxes giving me a $2,100 notice to pay. I had a tax professional take a look at it but she said she saw no error! I believe what triggered the allegation of an error was I overpaid my quarterly taxes, especially with a large payment in the 4th quarter. The IRS looks for inconsistencies that may attract their interest. If they see you did your own taxes they will want you in touch with a tax professional to clear up the issue.

The tax professional called the IRS and got them to reverse the past due notice bill completely! I will never do my own taxes again because it attracts these IRS tactics to take advantage this way. I therefore highly recommend using a tax professional especially when Biden’s administration wants to audit small businesses that they hired many for the task this year. Make sure the accountant is familiar with notary publics tax preparation.

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As stated in previous posts, I am an NSA and an EA (admitted to practice before the IRS).

The IRS has backups of workload, as well as unopened mail (5-10 semi trailers at some centers) which is causing inconsistency

For one client, I received eleven (11) notices all dated the same day, making all sorts of changes, ending up at where they started once you’ve figured out the order.

The IRS is not actively pursuing audits/exams against SB/SE (Small Business/Self-Employed), nor heavily recruiting for those campaigns. The proposed BBB legislation includes money to recruit revenue agents for campaigns against primarily wealthy taxpayers (>$2 million, individual or business, from what I’ve heard so far - I normally don’t read the full bill until its signed into law).

Many cases, for which I expected to spend time in exam were approved without substantiation into the high 6- and even low 7-figures. Most signing agents, unfortunately, are well under the $100,000 mark, making return on investment very poor for the IRS - remember, the IRS has limited resources which must be deployed to greatest effect.

The IRS still issues automated notices for unreported income, W2/1099 mismatch, math errors and the like, but virtually all of these are handled by correspondence. I’d also recommend not claiming child credit for a litter of puppies, claiming a mink coat as work clothes or other egregious deductions.

A credentialed practitioner (CPA, EA or attorney) is a good investment if one is needed, but many may be able to file a self-prepared return with good software and online help. If you feel the tax pro is good, but not fully versed with notaries, some of the posts here on NotaryCafe can be printed an given to them (I’d search for “tax”).

Just to be clear that I’m not self-promoting, my tax practice is primarily representation and litigation; I do not accept new clients for tax preparation.

Hope this is useful.

To a prosperous new year,

HWB.

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