Targeted by the IRS?

[FloridaJim57]

On 2/1 I filed my income tax electronically. They were done by a man who is a CPA at H&R Block. He has done my taxes for the past three years (at H&R Block). Since I live in Florida I only file Federal returns. I file jointly with my wife and are taxes are incredibly simple: the witholding for my Social Security, for my wife's Social Security, the withholding for my pension, and the interest earned on checking and savings accounts. That's it. Yesterday, like the past two years before, I received a form letter from the IRS office in Salt Lake City instructing me to mail them hardcopies of all original income statements. This is the THIRD YEAR IN A ROW they have demanded this. In the past two years, about ten days after I mail it in, my refund is deposited in my checking account. They have never once disputed anything about my taxes. Since I just mailed the stuff in yesterday I don't know what will go down this year. I did not cheat one iota and my taxes are 100% honest and accurate. I don't mean to sound paranoid or put upon but I honestly feel I am being targeted and for the life of me I do not know ehy. I spoke to an AARP tax expert at the library and she asked if the same person did my taxes all three years. I said yes, he did. She said he may be the one reg flagged not me. Whatever, I am really sick of this. They do not give any contact number or contact name so I can ask if I am doing something wrong in my filing. Just a form letter.

 

[Spock]

I think you got your answer from the "AARP tax expert at the library".
Use a different preparer or if your taxes are that simple do it yourself with TurboTax or one of the other packages.
If you're frustrated by the lack of contact info in the form letter, just wait until you get an audit letter for a prior year vs. just a request for documentation.

 

[easysurfer]

Even before reading the end of the OP, I was thinking the same about maybe it's the H&R Block person under scrutiny.

 

[SecondCor521]

If your taxes are that simple, AARP Tax Aide will do them for free. They e-file and everything.

 

[RetireBy90]

I think I understand your frustration. I was audited one year and all came out fine, but I am anxious anytime I get any letter from them. Been doing my own taxes since 1972 (yes, still have the original paper on that one and have been contacted several times. Take a deep breath, I'm anxious dealing with them also, but I think this will pass and is a minor annoyance. I think your within normal reaction and you have every right to be anxious but try to look at the big picture and have a shot of good whiskey. That always helps me.

 

[Sunset]

OP - don't know why you pay to have your simple taxes done by the CPA, when AARP will do them for free.
Or you can do them yourself with a $20 H&R block software package.
It is actually easy to do it.

The CPA you use is probably the one red flagged, maybe he claimed extra things for some other clients/himself that were not really true... and now he is suspect.

 

[cathy63]

Yes, it's true that AARP Tax-Aide will do your taxes for free, but that doesn't mean you won't get the same letter next year. We have a couple of clients at my site who get letters asking for hard copies of the docs that prove their withholding (yours may be slightly different if it's asking for proof of income vs withholding). One of them has her only withholding from Social Security and the IRS still asks for a hard copy a week or so after we e-file her return. There's no EIC or Sched-C or anything else that might raise flags about fraud on these returns, so we're bewildered.

We have speculated that it might be because they are both over-withholding and getting huge refunds as a percentage of their AGI. We always try to get them to withhold less, but some people really want a big refund. I have also wondered if they might have been randomly selected for some kind of study the IRS is doing.

 

[socca]

... I spoke to an AARP tax expert at the library and she asked if the same person did my taxes all three years. I said yes, he did. She said he may be the one reg flagged not me. ...

I've seen this mentioned over on the r/tax subreddit. If a tax pro comes under suspicion then all of his/her clients may be audited. Whether this applies in your case is anyone's guess. If you aren't pursuing aggressive tax avoidance strategies then you probably have nothing to worry about - just some aggravation to put up with.

 

[Midpack]

It’s a little disturbing but doesn’t sound like you have anything to worry about. In over 45 years, I’ve only had two “inquiries” by the IRS, and I was nervous until I reviewed my returns and found I was right. They were wrong both times, and once I showed them their mistake, never heard from them again. Don’t expect an acknowledgment though, they just move on. I have always done our taxes myself, I can’t imagine paying someone to do it for me.

 

[jldavid47]

It wouldn’t surprise me if it’s because of the preparer at H&R Block. I worked there for one tax season. They basically told us to be very aggressive in terms interpreting the tax laws in favor of the client. I would imagine getting so aggressive that the IRS takes notice too many times would flag a preparer.

 

[AmigaDude]

... I received a form letter from the IRS office in Salt Lake City instructing me to mail them hardcopies of all original income statements...

Does not sound like an audit or anything like that. Maybe like someone else posted, the expected refund may be too large for the norm

 

[jebmke]

Even before reading the end of the OP, I was thinking the same about maybe it's the H&R Block person under scrutiny.

or an entire office. Another tax-in-a-box firm had an entire office shut down in my state due to fraudulent returns. It was several years ago. Not Block.

 

[RetMD21]

One of them has her only withholding from Social Security and the IRS still asks for a hard copy a week or so after we e-file her return. There's no EIC or Sched-C or anything else that might raise flags about fraud on these returns, so we're bewildered.

That's strange. I would assume that the IRS has direct access to SSA tax documents.

 

[cathy63]

That's strange. I would assume that the IRS has direct access to SSA tax documents.

That's what I thought too. When I looked into it a while ago, I found out that the deadline for 1099-R issuers to file with the IRS is March 31, even though the deadline for providing forms to the taxpayers is January 31. So when the IRS asks for forms in Feb or Mar, it's probably because they haven't received their copies yet and don't want to hold up the refund until April.

I don't know if there's also a delay between SSA issuing 1099s and filing them with the IRS, or if the IRS just doesn't bother to check if the SS withholding would cover the full amount reported on the return before sending out their letter.

 

[Venturer]

When My Dw and I both retired, the next year for some expenses I sold some stock that I had bought thru the years with payroll deductions. When we filed our returns for that year we recieved a letter to send in proof of cost basis. I worried needlesly about getting it & sending it in, but it turned out ok. When we retired we decided to have 10% withheld from our SS, pensions, and anything we take from IRAs, We just had our taxes done last week at the AARP TAX AIDE site. We are getting everything we paid in back as a refund---owe no tax. The person who did our return suggested that we lower the amount we withhold but we would rather get some back as opposed to paying more. It all comes out in the end. My DW puts that money in an emergency/ play kitty that makes her happy. "Happy wife- happy life".

 

[dmpi]

Maybe the IRS suspects fraud in that someone may have stolen your ID and they just want to verify that it's really you before they send you a big check.

 

[omni550]

I prepared my 2022 taxes using TurboTax (as I have done for decades) and e-filed with the IRS and my State on Jan 24. I received my State refund on Feb. 8. I am still awaiting my significant (>$12K) IRS refund.

As a bit of explanation as to why I am due such a large IRS refund, it is a result of 1) my over-withholding of taxes (2022 was my first year taking RMDs and I wanted to be sure to have paid sufficient taxes on my required tIRA withdrawals) and 2) I had also planned to buy $10K of I-Bonds with the refund, much like I had done in 2021, so my quarterly estimated tax payments were larger than my 'income' would warrant.

After rethinking things, when I filed my taxes I decided NOT to purchase I-Bonds with my IRS refund. Instead, I wanted my IRS refund deposited to my bank account. As it has been a month since I filed, I am getting the feeling that this large refund due may have triggered my tax return for a 'closer look'.

Other than starting RMDs, nothing significant had changed in my tax filings from 2021.

omni

 

[retire48in2018]

I was audited 4 out of 5 years - no change in what I submitted.

They wanted documentation on Roth conversion from nondeductible IRA (back door Roths). What funds were invested, reason for selection, fund performance during time in non deductible account, fund transferred in Roth, why selected, etc.

All required forms were originally submitted, so I just resubmitted with explanation letter and reattached the original forms only. Accepted each time.

Our kids had audit every year they claimed AOTC. IRS wanted original receipts with original cancelled checks even though they had the 1098T and it was submitted. I told them don’t send receipts, just resend with the 1098T per regulation requirements. Each year IRS accepted - so 4 x, both kids - 8 audits.

With my 4 - that was 12 audits in 5 years for the 3 filings. It became expected. Once they exhausted the 4 AOTC, no more audits for them.

Coincidentally (?), audits stopped for me. There was no current link in those 4 years. All were independent with different addresses, etc. no idea why so many audits.

Our view of IRS changes over those 4 years with “requirements” to submit data that it is not required to be submitted.

 

[FloridaJim57]

Maybe the IRS suspects fraud in that someone may have stolen your ID and they just want to verify that it's really you before they send you a big check.

Well, that is a very nice positive way to read the situation. I have personally always believed the biggest lie any American can hear is "I am from the government. I am here to help". But, I thank you for your input.

 

[Buckeye]

Use the AARP folks to do your taxes and save yourself a bunch of money! They are experienced and well-trained.

 

[Sunset]

Maybe the IRS suspects fraud in that someone may have stolen your ID and they just want to verify that it's really you before they send you a big check.

If that is the case, I think it's great !

Worst thing for taxpayers is the IRS sending free money in the BILLIONS of dollars to scammers.
Most of the money is lost forever, as it's cashed out and transferred, sent overseas, etc.

"From 2011 through October 2014, the IRS has stopped 19 million suspicious tax returns and protected more than $63 billion in fraudulent refunds."

https://www.forbes.com/sites/robert...any dollars of fraudulent refunds it has paid.

 

[Helen]

Is it common for a CPA to work at H&R Block? I never thought of their front line employees being educated to that level.

I just looked it up, you have to take and pass a 60 hour tax course. You don't need a GED to take the exam.

"5 – Can anyone take the course?

H&R Block requires students to be 18 years of age to attend the Income Tax Course. A GED or diploma, however, is not required."

https://www.hrblock.com/tax-center/around-block/become-tax-preparer/

 

[Sunset]

Is it common for a CPA to work at H&R Block? I never thought of their front line employees being educated to that level.

I just looked it up, you have to take and pass a 60 hour tax course. You don't need a GED to take the exam.

"5 – Can anyone take the course?

H&R Block requires students to be 18 years of age to attend the Income Tax Course. A GED or diploma, however, is not required."

https://www.hrblock.com/tax-center/around-block/become-tax-preparer/

They don't do a criminal background check ?

This could be a great job for someone interested in certain criminal fraud activities

 

[FloridaJim57]

Use the AARP folks to do your taxes and save yourself a bunch of money! They are experienced and well-trained.

yes, when I spoke to the AARP woman at the library she really knew what she was talking about and was very helpful. HR Block charged me $125 to do Federal only.

 

[jldavid47]

Is it common for a CPA to work at H&R Block? I never thought of their front line employees being educated to that level.

I just looked it up, you have to take and pass a 60 hour tax course. You don't need a GED to take the exam.

"5 – Can anyone take the course?

H&R Block requires students to be 18 years of age to attend the Income Tax Course. A GED or diploma, however, is not required."

https://www.hrblock.com/tax-center/around-block/become-tax-preparer/

I took the course in 2001 (the first class was on 9/11. Oy vey). The course was excellent and so was the instructor. I wish I could say the same about working there. A couple of the preparers in my office I wouldn't have trusted to do a 1040-EZ (which existed at that time) even though they had passed the class. I had to bail them out multiple times. The company didn't care at all about excellence in tax preparation. What they cared about was you selling IRAs and Refund Anticipation Loans (which were a huge ripoff of the customer and preyed on those who needed the money most). I quit a couple of months in because it was either that or strip myself of my dignity and integrity. That was 21 years ago. I have no idea what it's like there now.