I am so blessed...

[BulldogTom]

Client got a letter from the IRS that needs to be responded to in 20 days.   The letter is dated 4/7/2024.   I got the letter today....

The letter asks for "Any Supporting Documents Verifying Income".   The client has a Sch. C with 500K of gross income and a loss on the bottom line.

At least I did not get it after it was too late to respond.   I am blessed that my clients are so thoughtful.

20 days to respond, 20 weeks to get a response back.   Anyone taking the under on getting a response before 20 weeks?

Tom
Longview, TX

[Sara EA]

You can always ask for more time to complete your response.  IRS really does want to work with you, and I've never had them deny such a request.  Of course that was when they still had employees....

[Lee B]

I wonder why they want to verify income?

What kind of business is this?

Do they have cash receipts?

[Catherine]

20 hours ago, BulldogTom said:

Anyone taking the under on getting a response before 20 weeks?

You'll get a response stating they need more time to respond.

[BulldogTom]

18 hours ago, Lee B said:

I wonder why they want to verify income?

What kind of business is this?

Do they have cash receipts?

No Cash Receipts.   Everything on a 1099NEC.  Contracted with a local govt agency to provide after school care.   Profits did not justify the effort, so they did not renew the contract and closed the business mid-year.

I am not worried about the audit.   What I thought was most interesting is the wording of the letter.   "If we do not receive a response, we will not process your return."

Since when does the IRS have the choice to "not process" a timely filed return?  I understand they can audit, they can delay the payment of refund while under examination, etc.   But to flat out say they will not process the return because they want more info blows my mind.   

BTW - we got the response to the client today and they are uploading to the new portal thingy the IRS rolled out a while ago.   I am interested to see how this works out, if it actually gets what they want to who wants it via their upload tool.

Tom
Longview, TX

[Abby Normal]

55 minutes ago, Catherine said:

You'll get a response stating they need more time to respond.

You'll be lucky if it's just one. I usually get 2 or 3 of those notices before the IRS actually handles the problem. Sometimes it drags on so long that I forget what the issue was.

[Lee B]

I have used the upload toll before and it worked fine.

 

[BTS]

After income verification, they will want expense verification.  Better have your client get everything ready.  4 or 5 letters and two years later it will be resolved.  

[Lee B]

I find the request for "Income Verification" very strange.

What's the point?

[Randall]

On 4/26/2025 at 2:27 PM, Lee B said:

I find the request for "Income Verification" very strange.

What's the point?

Yes, I do too.  They have the 1099NEC.  What else do they need.  I can understand expense verification and net profit.  But whatever.  Just answer and wait for them to followup.

[BTS]

Had a farmer go through this two years ago and its still not finalized.  Hence my post above about 2 years later.  They asked for "Income Verification" only in first letter related to Schedule F.  Client sent that in.  Then 6 months later they wanted Schedule F "Expense Verification".  Sent that in.   6 months later, they wanted copies of their Schedule C and Income/expense report related to that.  Wife had small schedule C with around $1200 in income and no deductions other than some material.  Well, we sent that in along with copies of all 1099's, W2's, 1098's, etc..   We mailed in everything, including hard copies of the tax return.  That way they couldn't ask for anything more !!!   6 months later...  they get a letter stating all is in order and a refund will be issued.  6 months later, still no refund.     And it isn't much of a refund !!  A few hundred !!  Moral of the story....  Send them everything, including the kitchen sink !!  If you give them only what they ask for, it will drag out.

[Lion EA]

Another moral: always owe a little bit, so you don't have to wait for your refund...