Client Gets a $9789 Tax Liability Eliminated and IRS Issued a $892 Tax Refund instead.

When you receive a CP2000 notice, DO NOT JUST ignore or sign your rights away. If you know the information is not accurate, you need a seasoned tax resolution specialist to help you get the IRS off your backs.

This client had a mortgage debt cancelled years back and was issued a 1099C.Like most taxpayers she did not know this information needed to be included in their tax return. Well, the IRS did come after her claiming the mortgage debt was income. It is income only if you do not make the election on your tax return to show that the cancelled debt was your primary residence.  To make this election, you will complete form 982 and attach it to your tax return to get the income associated with the cancelled debt discharged.

You need to understand that tax preparation is one thing and IRS audit representation is another. If you self-prepare your tax returns, or if you have a tax preparer that does not deal with the IRS on a DAILY basis, engage in negotiations, audits and exams with the IRS, or has yearly trainings on IRS case settlements, then they are not the best person to represent you when having to prove your case to the IRS.