Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

I have a client that is now under audit, it is a mail in and

Customer Question
just focuses on his mortgage...
I have a client that is now under audit, it is a mail in and just focuses on his mortgage interest. I only received his 1098's and it did not dawn on my to ask the amount of the mortgage, which was $1,200,000 at the time. The bank reported the gross interest. Did you ever encounter this and what can be my course of action. Any tax law??? Also the prior year is under audit to, I wanted to amend it anyway due to a credit he is entitled for on an 8903. Can I wait to amend after the audit. I do not want to muddy the waters.
Submitted: 9 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 16 hours by:
10/3/2008
Tax Professional: Anne, Master Tax Preparer replied 9 years ago
Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2,439
Experience: Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
Verified

HiCustomer/p>

 

Thank you for using justanswer. Letter audits are fairly common, and generally fairly easy to deal with. You will need to prorate the mortgage interest by applying Table 1 Instructions . Although I can't use my 1040X (the instructions on letter audits normally states that you may not use a 1040X to make corrections to the letter audit) I do one for myself for informational purposes. so that I can check IRS's figures.

 

You'll want to find the page of the letter that looks similar to the 1040 X form . After doing your own 1040X, see if your figures agree with theirs. If they do, then you do nothing and let the tax payer pay the additional tax. If they don't agree (and they usually don't. IRS may have adjusted the mortgage interest, but I doubt it. My guess is they just disallowed all of it) you cross off the number in the far right had side that you disagree with (probably the line showing the itemized deductions, tax due, etc) and make the corrections on their form. Do not attach your 1040X,that was just to be able to fill out and correct their letter, but DO attach any worksheets, etc that support your position, along with a new Schedule A showing the correct amount of mortgage interest deduction. On the bottom of the page you will write "see attached Schedule A and worksheets"

 

You will need to have your client check the box that states "they do not agree with the IRS's figures on the page where it offers them the choice, and write "see attached" on the bottom of the letter.

 

If the prior year is also under audit, and you have that IRS letter, then I would correct that one in the same manner, but I would mail them separately. Waiting until one is done before you send the other correction won't really matter, and there's also the time limit you have to meet. Since all years stand on their own, this won't be a problem. Be sure to mail these corrections back to the correct address though.

 

I hope this helps you

 

If you have found my answer helpful, please click the green "accept" button as it is the only way we get paid.

 

Positive feedback and bonuses are always appreciated.

 

Ask Your Own Tax Question
Customer reply replied 9 years ago
The 1040X has nothing to do with what is under audit. It is a totally seperate matter. Can I still do a 1040X when the audit is done?
Tax Professional: Anne, Master Tax Preparer replied 9 years ago

Hi againCustomer/p>

 

The 1040X I was referring to is I do for informational purposes only so that I can correct their letter. It is how I get the corrected numbers.

 

If you have a letter audit for a year that you wanted to amend anyway, you may correct it in 1 of 2 ways. Do your 1040X FOR YOURSELF ONLY that includes the credit you wanted to amend for, and when you correct the audit letter, you would take care of both the audit issue and correcting for the neglected credit at the same time by changing the audit letter figures to reflect the credit also. (this is where the 1040X comes in, its how I get the numbers for the corrections to their letter) You would include a note on the bottom stating something to the affect of "corrections include credit xxxx see attached form" and then attach the form itself. This is a 1 step process, and if the original reason the tax payer received the letter audit is pretty simple, then I generally will do both steps at once.

 

If the letter audit is more complicated, then you may want to wait until the audit itself is satisified, and then you will have to amend the return using IRS's changes in the letter audit.

 

I hope this helps.

Ask Your Own Tax Question
Customer reply replied 9 years ago
So when I go to change the return, I would use the corrected figures after the audit. I would rather do the 104X after the audit so it does not confuse anyone.
Tax Professional: Anne, Master Tax Preparer replied 9 years ago

Yes, if you choose to do the amended return after the audit, then you would use the corrected figures.

 

I hope this helps. If you have further questions or need clarification, please let me know.

 

 

 

Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2,439
Experience: Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
Verified
Anne and 87 other Tax Specialists are ready to help you
Ask your own question now
Ask Anne Your Own Question
Anne
Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2,439
2,439 Satisfied Customers
Experience: Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses

Anne is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,338 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,980 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
As per the new tax law, the property tax deductions of 10000
As per the new tax law, the property tax deductions of 10000 is it per property or per tax payer per property?If both wife and husband file together can they claim 20000 towards one property or just 1… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Interested in information about new tax laws and their
Interested in information about new tax laws and their effect on S Corporations … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
The 2018 tax law will allow homeowners to deduct property
The 2018 tax law will allow homeowners to deduct property taxes and either income or sales taxes with a combined limit on these deductions being limited to no more than $10,000. What does this mean? w… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
Is the deduction for medical expenses on Schedule A repealed
Is the deduction for medical expenses on Schedule A repealed under the new tax law & can health insurance premiums for a Schedule C proprietor still be deducted on page 1 of Form 1040?… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
I lost my refund check for an amended return and want to
I lost my refund check for an amended return and want to know if it could be canceled and a new check sent to me. It may have been stolen out of my purse. … read more
Shan-Nel Simmons
Shan-Nel Simmons
Tax Professional/Owner
Master\u0027s Degree
29 satisfied customers
IRS auditing 2015 Federal Return regarding reverse mortgage
IRS auditing 2015 Federal Return regarding reverse mortgage accumulated interest on 1098 for $93k. Sent Form 886-A Worksheet for Qualified Loan Limit and Deductible Home Mortgage Interest. … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,267 satisfied customers
Can we claim the mortgage interest for a second home on
Can we claim the mortgage interest for a second home on property that we purchased and have developed a rustic "camp" on? We have an outhouse (bathroom), outdoor kitchen area, and a small building we … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,777 satisfied customers
Impact of tax changes on filing amended returns... Client
Impact of tax changes on filing amended returns... Client filed a 2016 tax return on time in 2017. If the tax laws change significantly, which laws apply when amended returns are filed... the tax laws… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,777 satisfied customers
Form 886-A Deductible Home Mortgage Interest Taxpayer has
Form 886-A Deductible Home Mortgage Interest Taxpayer has $1,000,000 in Grandfathered debt. Line 9 Form 886-A - is this line amount after deducting the garandfathered debt… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I entered my mortgage interest in the section marked
I entered my mortgage interest in the section marked mortgage. … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Can you write off mortgage interest on a vacation home the
can you write off mortgage interest on a vacation home the home price 54000.00 … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
Mortgage Interest Taxpayer inherited two homes in the same
Mortgage InterestTaxpayer inherited two homes in the same year. One from each parent, both were primary resident of deceased parent. Deceased parents were divorced and both died within 12 months of ea… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
1098 Mortgage interest form: My wifes name is on the loan
1098 Mortgage interest form: My wifes name is ***** ***** loan and on this form, however, I've been making the payments and would like to claim this on my tax return … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,267 satisfied customers
Can a taxpayer file an amended return to elect into the
Can a taxpayer file an amended return to elect into the installment method if the original return was filed error without the installment method.… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
Attorney, my ny state tax return was audited. Finally it
Attorney , my ny state tax return was audited . Finally it says the case was closed and a letter will be mailed out . Anyone to access this info… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
Regarding the 'capitalize the mortgage interest'. I was a
Regarding the 'capitalize the mortgage interest'. I was a partner in a rehabbing/flipping real estate business. We rehabbed two properties in 2016 and sold them in 2017. According to the first propert… read more
taxmanrog
taxmanrog
Master\u0027s Degree
768 satisfied customers
I am not filing schedule A for itemized deductions, but
I am not filing schedule A for itemized deductions, but would like to include sales tax in 1040 Form. Where do I put it? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
My question is about tax deductions (Mortgage Interest.
My question is about tax deductions (Mortgage Interest. Mortgage Insurance premium & Real Estate Taxes) that can be deducted by two, unrelated people, who own a house together.The two unrelated owners… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x