How can a taxpayer get more info from the IRS about a very vague IRS letter?

[oohlalaw]

Some relatives in California (a married couple) were expecting their federal tax refund by now. They reside in California and received their Calif tax refund already. Yesterday they received a very vague letter from the IRS saying the refund can't be issued because something was missing on the tax forms. The wife spent hours on the phone with the IRS yesterday trying to find out exactly *what* is missing so she could submit what is needed, but no one could tell her. The IRS phone agent simply said to mail and fax copies of "everything" for them to review. Is it typical for the IRS to be vague about what is missing? The husband works in a restaurant and submitted his W2. The wife has a small baking business and doesn't know if she needs to send copies of all her invoices, receipts for purchasing ingredients, etc.

The tax company that had prepared and submitted the forms (I'm avoiding their name in case it would violate forum rules to mention them) looked over the returns again and saw nothing wrong or missing.

It seems to us that the IRS should've told them (in the letter the IRS sent or else on the phone) what is incomplete on their tax return.

Have you heard of this type of thing happening?

Do you think it would help if they call the IRS again and ask for a supervisor?

Or does anyone have any other suggestion?

 

[CTU]

Some relatives in California (a married couple) were expecting their federal tax refund by now. They reside in California and received their Calif tax refund already. Yesterday they received a very vague letter from the IRS saying the refund can't be issued because something was missing on the tax forms. The wife spent hours on the phone with the IRS yesterday trying to find out exactly *what* is missing so she could submit what is needed, but no one could tell her. The IRS phone agent simply said to mail and fax copies of "everything" for them to review. Is it typical for the IRS to be vague about what is missing? The husband works in a restaurant and submitted his W2. The wife has a small baking business and doesn't know if she needs to send copies of all her invoices, receipts for purchasing ingredients, etc.

The tax company that had prepared and submitted the forms (I'm avoiding their name in case it would violate forum rules to mention them) looked over the returns again and saw nothing wrong or missing.

It seems to us that the IRS should've told them (in the letter the IRS sent or else on the phone) what is incomplete on their tax return.

Have you heard of this type of thing happening?

Do you think it would help if they call the IRS again and ask for a supervisor?

Or does anyone have any other suggestion?

This year many, many EIC/ACTC recipients had to confirm their identity (some were able to do it over the phone, some had to mail in documents). Most were/are less-than-impressed. Could that be it, perhaps?

Have they looked at the code/s the letter contained?

 

[LdiJ]

Some relatives in California (a married couple) were expecting their federal tax refund by now. They reside in California and received their Calif tax refund already. Yesterday they received a very vague letter from the IRS saying the refund can't be issued because something was missing on the tax forms. The wife spent hours on the phone with the IRS yesterday trying to find out exactly *what* is missing so she could submit what is needed, but no one could tell her. The IRS phone agent simply said to mail and fax copies of "everything" for them to review. Is it typical for the IRS to be vague about what is missing? The husband works in a restaurant and submitted his W2. The wife has a small baking business and doesn't know if she needs to send copies of all her invoices, receipts for purchasing ingredients, etc.

The tax company that had prepared and submitted the forms (I'm avoiding their name in case it would violate forum rules to mention them) looked over the returns again and saw nothing wrong or missing.

It seems to us that the IRS should've told them (in the letter the IRS sent or else on the phone) what is incomplete on their tax return.

Have you heard of this type of thing happening?

Do you think it would help if they call the IRS again and ask for a supervisor?

Or does anyone have any other suggestion?

No, its not normal for the IRS to send out vague letters. Normally they are quite precise about what they need. They should ask their tax preparer to verify that the letter and the phone number on the letter actually belong to the IRS before sending them anything.

 

[oohlalaw]

This year many, many EIC/ACTC recipients had to confirm their identity (some were able to do it over the phone, some had to mail in documents). Most were/are less-than-impressed. Could that be it, perhaps?

Have they looked at the code/s the letter contained?

A few friends also mentioned the possibility of identity theft or fraud protection. I'll take a look at the letter and see if there are any codes. Would any code/s be located at the top or end?

Thank you.

 

[LdiJ]

A few friends also mentioned the possibility of identity theft or fraud protection. I'll take a look at the letter and see if there are any codes. Would any code/s be located at the top or end?

Thank you.

Upper right hand corner.

 

[oohlalaw]

No, its not normal for the IRS to send out vague letters. Normally they are quite precise about what they need. They should ask their tax preparer to verify that the letter and the phone number on the letter actually belong to the IRS before sending them anything.

Will do. Thank you.

In the meantime, a friend just read an article that says the IRS is slowing many tax refunds due to replacing the (outdated) electronic fraud detection system with an update called the Return Review Program. Perhaps this is the cause.

 

[Dandy Don]

Take your return to a tax accountant who was previously an enrolled agent (someone who has actual experience working at IRS) to have the accountant look at the letter and/OR the return to see if he/she can spot any potential problem areas.

 

[LdiJ]

Take your return to a tax accountant who was previously an enrolled agent (someone who has actual experience working at IRS) to have the accountant look at the letter and/OR the return to see if he/she can spot any potential problem areas.

An enrolled agent can be someone who worked for the IRS or can be someone who took the exam to become an enrolled agent. An enrolled agent is not necessarily going to be any more experienced with dealing with IRS problems as any other tax professional. It all depends on what they tend to specialize in doing.

OP, the new IRS verification program is set up so that people who issue W2s and 1099's are required to submit them sooner so that the IRS can at least spot check tax returns to income documents. This helps avoid false W2s being used to obtain big tax refunds using identity theft. I have observed no increase in letters being received by taxpayers nor any indication that letters are becoming vague.

While its not a bad idea have a fresh set of eyes take a look at your tax return to see if there is anything that seems off, I still believe that its best to verify that the letter is real (and not a scam) and if real, send them whatever documents were used to prepare your return.

 

[oohlalaw]

Take your return to a tax accountant who was previously an enrolled agent (someone who has actual experience working at IRS) to have the accountant look at the letter and/OR the return to see if he/she can spot any potential problem areas.

Thanks. They live in a remote area so may not have access to a previously enrolled agent. I'll mention it to them. In the meantime, the accountant who filed the returns has agreed to help. At first he was hesitant, which was disconcerting.

 

[oohlalaw]

An enrolled agent can be someone who worked for the IRS or can be someone who took the exam to become an enrolled agent. An enrolled agent is not necessarily going to be any more experienced with dealing with IRS problems as any other tax professional. It all depends on what they tend to specialize in doing.

OP, the new IRS verification program is set up so that people who issue W2s and 1099's are required to submit them sooner so that the IRS can at least spot check tax returns to income documents. This helps avoid false W2s being used to obtain big tax refunds using identity theft. I have observed no increase in letters being received by taxpayers nor any indication that letters are becoming vague.

While its not a bad idea have a fresh set of eyes take a look at your tax return to see if there is anything that seems off, I still believe that its best to verify that the letter is real (and not a scam) and if real, send them whatever documents were used to prepare your return.

The accountant who filed the returns has agreed to handle the problem. We wonder if he forgot to include something or if something else prompted the letter.

Thank you.

 

[oohlalaw]

This is just a follow-up, in case anyone else experiences the same thing . . .

The accountant who filed the return did NOT help at all. After 6 weeks, he simply advised our relatives to go to a tax advisor 30 miles away. As the relatives had been stuck paying 13% interest on lots of bills for 6 weeks, we decided to send them to our CPA who read the correspondence and concurred that it provided no details about any problems or omissions. But then the CPA looked on the IRS site and found out that the refund will be issued this week. That's a relief. In any case, it seems wrong that the refund was withheld for so long for no apparent reason.

 

[LdiJ]

This is just a follow-up, in case anyone else experiences the same thing . . .

The accountant who filed the return did NOT help at all. After 6 weeks, he simply advised our relatives to go to a tax advisor 30 miles away. As the relatives had been stuck paying 13% interest on lots of bills for 6 weeks, we decided to send them to our CPA who read the correspondence and concurred that it provided no details about any problems or omissions. But then the CPA looked on the IRS site and found out that the refund will be issued this week. That's a relief. In any case, it seems wrong that the refund was withheld for so long for no apparent reason.

Its very possible that there was a hitch somewhere in the system and the phone calls helped move it along.

 

[Zigner]

As the relatives had been stuck paying 13% interest on lots of bills for 6 weeks...

A total of $150 if the bills totalled $10,000. Not that big of an amount, really.

I would suggest that your relatives adjust their withholdings and their estimated tax payments so that they don't have such a large refund due at the end of the year. I would also suggest that they NOT rely on a tax refund to pay bills. Sure, it's nice to be able to do so, but using that as a financial planning tool is really not wise.

 

[oohlalaw]

I would suggest that your relatives adjust their withholdings and their estimated tax payments so that they don't have such a large refund due at the end of the year. I would also suggest that they NOT rely on a tax refund to pay bills.

I totally agree and mentioned this when the problem first occurred. Thanks!