Tax Lawyers in San Francisco Bay Area

Christopher P. Housh, EA

San Francisco California Enrolled Agent

Timing is Everything: IRS Audit & Removal of Tax Penalties

by Chris Housh & Steve Moskowitz 15. May 2013 15:36

We were contacted by a couple from Livermore, CA because the IRS had audited their income tax return.   The IRS threatened and disallowed their entire mortgage interest deduction.   This meant that the IRS audit regarding their tax deductions resulted in a tax bill of $33,954 plus a $6,790 tax penalty.

Luckily, this couple contacted our tax law firm based on the IRS notice.   They thought they wanted an Offer in Compromise.   Once we met with them and discussed the facts of their case, we believed that they were entitled to the majority of the tax deductions and that the IRS was wrong.   Because they contacted us in time, we recommended that they fight the IRS audit.  We also recommended that they not pursue an Offer in Compromise, as we believed that they likely did not owe the tax the IRS claimed they did and that an Offer in Compromise would actually be detrimental to their credit and overall financial position.

They hired our tax law firm to defend them against the IRS audit.  Steve and Chris represented them before the IRS audit division, argued that our clients were entitled to their deduction, and WON.   This lowered the tax from $33,954 to $7500.  Additionally we fought the tax penalty and WON that too.   The IRS agreed to remove 100% of the tax penalty.

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Chris Housh is an Enrolled Agent with Moskowitz LLP | Disclaimer | Copyright ©2012 Moskowitz LLP all rights reserved.