Discussion:IRS audit problem
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Discussion Forum Index --> Tax Questions --> IRS audit problem
| 17 May 2008 | |
| Taxpayer diagnosed bipolar self filed a 2007 tax and reported 74000 self employment income. His mother said he was listening to the advertisement stating that you must file to get the rebate. Just looking at the IRS letter he had no AGI and would not have qualified for the rebate based on the return he prepared. I have not yet seen the return but he has heard from the IRS already disallowing all the expenses. He filed MFS but has never been married except that he believes that he was married to a ex-girl friend 20 years ago. This return was accepted as being filed by the IRS. How do I convince the IRS that this income is just his imagination. | |
| 17 May 2008 | |
| Why don't you file an amended return stating the changes and why? | |
| 17 May 2008 | |
| First, bipolar disorder would not have caused imagining things. Second, no way the IRS has already sent a notice disallowing any expenses for 2007. Imagination may be a problem, but not of the taxpayer. | |
Actionbsns (talk|edits) said: | 17 May 2008 |
| Basil, is your client under a doctor's care? If so, can you get a statement from the doctor regarding this person's condition? If you can get that, you might try amending the return citing the extraordinary circumstances and attaching the doctor's statement. Seems at this point the worst that could happen is they turn you down. At that point, you might try bringing in Taxpayer Advocate where you would be speaking one on one with someone. I've been able to successfully argue late filing penalties and such caused by health issues. | |
| 17 May 2008 | |
| IRSfixer sound as if you are either bipolar or a psychiatrist. I have the notice, the tax return must have been mailed in and really screwed up. Being bipolar is a serious illness which should not be the subject of your implied ridicule or joke. If you have no clue what to do then dont answer. | |
| 17 May 2008 | |
| I have major depressive disorder and have two children who are bipolar. I have extensive experience with this form of mental illness and I know that that bipolar disorder will not cause a person to imagine being married or have income that they don't. I am not saying the client may not have another type of mental illness, but you need to be precise about what symptoms you attribute to a disorder before you try to use it for a reasonable cause arguement.
I do not know what expenses are being disallowed unless he itemized and indicated his imaginary wife was taking the standard deduction. You will have to be much clearer about your description of the notice. Exactlty what is being disallowed? You said that the client had heard from the IRS that expenses were being disallowed. Can you really rely on this statement? Until you see the return and get a clarification on the disallowed expenses, I don't think you have enough information to do anything. But assuming that he made up income, file an amended return zeroing out everything. The explanation would be the taxpayer's mental illness - but not bipolar disorder. | |
| 17 May 2008 | |
| Taxoncall. Fixer has one of the most impressive records of helping others on this site you will find. Don't be so sensitive. No need to name call. I think you have your answer. Honestly, filing an amended return with a good explanation regarding the clients mental state should have been easy to figure out with your experience and background. The filing has become an assessment, and the only way to correct it is with an amended return. If the client has been diagnosed, contact the psychologist/psychiatrist and get a written statement to attach. They may need to get a realease of information from your client to do so. I grew up caring for a brother who was mentally ill. They do stupid things like this. Fix it for him and move on. Or refer the matter to Fixer who will clean it up in no time. | |
| 18 May 2008 | |
| You don't have to prove the guy imagined anything, though manic depressives can have psychotic episodes. Just have to show he's mentally ill and/or impaired. You can work this thing out with some of the advice given here.
One question I have, has he filed a return at all? If his mother is guardian of the adult son, the actions of such an adult ward (TP) are of no effect from the start. The mother should/must sign the return in her capacity as guardian. A return signed by the son is likely void, and not merely voidable. Your state's law may need to be consulted. Fed's generally respect state law in this type matter: ie guardian/ward. So, check to see if mother or someone else is is court appointed guardian, if so, the return signed by the adult ward is likely a nullity. There was something else wrong with that return as well for it to get this much attention this quickly. Maybe it was done in red crayon, who knows, but whatever it is, it's likely to bolster your case. | |
| 19 May 2008 | |
| Please note that I have already seen Income Tax Examination Changes for a 2007 tax return (along with 2005 and 2006) disallowing all business expenses, itemized deductions, etc. Yes, it's very unusual to see something that fast, but it is not out of the realm of possibilities. | |
| 20 May 2008 | |
| I was in the IRS office here in JAX this morning related to a matter that included the taxpayers' 2007 1040. The Information Document Requests were dated May 9. Technology. It used to seem like such a good thing...Everything is getting faster and faster. | |
