I’m helping a client with an issue from his 2021 tax return. He had accidentally left off an investment statement containing some interest and dividend income as well as a bunch of stick sales.
Back in November 2023 he received notice CP2000 from the IRS, detailing the missed transactions and assessing a large amount of additional tax due.
Upon further review, it was noted that he was being taxed on the entire proceeds of the stock sales, without accounting for cost basis on some of the transactions. The amount they were saying he owed was about $20,000 higher than our calculations. We responded to the notice, provided the documentation requested, and eventually filed an amended tax return in February 2024 to correct the inadvertent omissions from the originally filed return, because our previous attempts had not resolved the issue.
After processing the amendment, the client received another notice CP2000, which now listed additional, different information that they were claiming was missing from the tax return.
This information wasn’t listed in the original notice, which made sense because the transactions are already reported on the originally filed tax return. They were also still reported as part of the amended tax return, so it is unclear why the IRS thinks these transactions are missing when they are clearly on both returns. We even sent copies of the investment statements attached to the tax return (original and amended) that show the exact amounts that are listed in the Notice CP2000 as being missing.
My client is very responsible and also tech savvy, and we have always responded to all these notices in a timely manner, most of the time the client uploaded his response through the secure portal on the IRS website.
However, despite all of our detailed correspondence, and the filing of the amended return, the errors still have not been corrected and the clients IRS transcripts still show an incorrect amount of tax being assessed.
The difference is a few thousand dollars. My client has paid the erroneous balance due to avoid continuing to get nasty notices from the IRS and accumulating additional interest and penalties but at this point in time he has overpaid them by atleast $3144 according to our calculations.
If I could just speak with someone regarding this matter, I think I could easily explain what happened and they would be able to correct the error on their end. However, as I’m sure you are aware, the difficulty comes from being able to contact someone that can actually be of help at the IRS.
Yesterday I started with the practitioner priority line, a dedicated phone line for enrolled agents, CPAs, and attorneys, who are actively assisting their clients in resolution matters. I was told by Ms. Mosley, ID#1000705532, that the amended return had been sent to the automated under reporter department and that I needed to talk to that department in order to resolve the matter. She offered to transfer me and also gave me the phone number in case I were to get disconnected, which of course I did, big surprise.
I tried calling the under-reporter department back yesterday at the number she gave me, 800.829.8310 and got the recording that no one was available to take my call at this time and that I should try back later.
This morning, I called the IRS automated underreporting department again and after spending 4-5 minutes navigating the automated menu, I was again met with the recording that no one was available to take my call at this time.
This is also the phone number that is listed in the letters sent to the client. I don’t think it is right, and it definitely isn’t good customer service, to list a phone number in notices when no one is available at that number to take calls. It is especially frustrating when the notices are assessing thousands of dollars in additional tax and penalties due, that are inaccurate, and we are seemingly left with no way to correct the errors.
I tried again, calling the practitioner priority services line and spoke with Miss Martinez, ID# 1003721724. She verified my power of attorney, put me on a 5 to 7 minute hold to review the case and came back to inform me that both the amended and the originally filed return were both in the under reporter department so there was really nothing she could help me with, I needed to speak with them directly.
She said she could transfer me to the under reporter department and since I had already been disconnected yesterday and attempted to call myself with no avail I asked her what I should do if I was unable to get a hold of the underreporter department. She had no advice or recommendations for me except to tell me that there should be someone there available to talk to me, that the department was open, and that if I continue to get that message, I just need to keep trying to call back until I reached someone. It’s so frustrating that the agents I speak with don’t seem to believe me that it is nearly impossible to speak with a live person at the numbers given out by IRS.
She transferred me and I got an automated message saying wait times were greater than 60 minutes and that I could request a callback, so I attempted to do that. However, since I had already requested a callback earlier today, the system thought that I already had a request in place, even though I had already received that call back and it shouldn’t have been listed as pending in the system anymore, and the automated system would not let me request another call back at this time, and I was disconnected, I wasn’t even given the option to continue to hold. Back to square one… again!
I could not reach anyone in the automated underreporting department - I tried multiple times on the number listed in the letter and given to me by IRS agents.
I tried practitioner priority services again and this time the transfer went through and I was able to speak with Ms. Cameron, ID #1000157936 in the automated underreporting department.
She told me that uploading documents to the IRS (via the instructions and QR code in the letters) would not actually get the documents to the underreporter department for tax year 2021.
One theme I notice across most IRS agents that I talk to is that they talk over me regularly, they do not stop and listen to what I am trying to explain. They usually have their own agenda, maybe a script they have to follow, and I rarely feel heard or understood. And I am a seasoned professional with over two decades of experience in the income tax world - I can only imagine what regular everyday people feel like when they have to call the IRS to try to understand a letter or notice, or deal with a problem in their tax return.
She also told me that electronically filing the amended return would not get it to the underreporting department (even though two agents had told me that both the original and amended returns were in the underreporting department) so the whole conversation was very confusing to me.
She kept spouting off numbers from the tax return and not really answering or addressing my questions.
To me, it looks like the amended return hasn’t been processed, but she seemed certain that what was in the IRS computer was correct.
After almost an hour on the phone with her, I had to leave my computer to drive my daughter to her orthodontist appointment (I had now been dealing with this issue for two and a half hours) so I could no longer compare the numbers she was spouting to me with what was on the amended return that we filed back in February.
The bottom line is that the IRS either hasn’t processed the amended return that we filed, or they have processed it but maybe the numbers didn’t make it into the system accurately, because according to our records, the taxpayer had overpaid by a few thousand dollars - a few thousand dollars that he deserves back, and it’s not fair that he should have to spend hundreds if not thousands of dollars to pay me to try to sort out a mess that they have created.
Ms. Porter admitted that the CP2000 letter that we received back in February was not completed correctly, the changes were not clearly documented and apparently the changes that were listed were inaccurate.
She said she would send out a new explanation of changes that should be easier to understand and follow. So for now, I will just wait for that new information to arrive and then go from there.
I asked what the best way to contact the department was and the phone number that hadn’t worked in days to get through to anyone was the only option she could give me. That, and the fax number in the letter, were the recommended ways of contacting them and providing information needed to sort this mess out.
Overall, a super frustrating experience all around that took WAAAAAAY longer than necessary.
So once again IRS, I plead with you to do better. Taxpayers pay in trillions of dollars a year to this system, we deserve to have descent customer service, and a realistic way to resolve issues when they come up.
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