Letter from IRS

[SunTaxMan]

This morning a client gave me a letter he received from IRS about 2007. Letter states:

1. "SSA has contacted you numerous times with no response." TP says he has received NOTHING from SSA about this.

2. There is discrepancy between amounts reported on forms 941s and W-2s for 2007.

3. FICA wages and Medicare wages agree.

4. Federal Income Tax Withholding does not agree (941s report $10,000+ in Federal Income Tax Withholding, W-2s, W-3 report zero Federal Income Tax Withholding.

{The above reflect what is stated in the IRS letter received today.}

Observations:

1. Nothing is stated regarding Wages for Federal Income Tax purposes (box 1 on the W-2), just wages for FICA and Medicare (Box 3 and 5 on the W-2).

2. Figures in letter do not agree at all with 941s or W-2s, W-3 that the taxpayer has on file for 2007 - and for that matter, the figures do not agree with 2006 or 2008. Gross wages on 941s and on W-2s, W-3 taxpayer has on file(W-2 Boxes 1, 3,and 5) are both well in excess of the amount shown in the letter). Federal Income Tax withholding on taxpayer's records are also in excess of what the letter states.

Questions:

1. Why is SSA concerned (at all) about Income for Income Tax purposes? Why would SSA be concerned about Box 1 of the W-2, since SS is based on Medicare Wages, not Wages for Income Tax purposes?

2. Have any of you received such a "muddled" letter from IRS (that would give me some hint at source of problem)?

Thanks,

[GeneInAlabama]

In past years, I have received letters from IRS and the State with facts totaly mixed up as in your case. I simply sent a letter back stating the actual facts and as I remember, that was the end of it. I don't remember even getting a reply back.