Claim of Partial Disallowance letter

[Colmatt]

IRS sent client 106C letter denying $1800 withholding that is on W-2.  Client sent in backup after earlier letter, but it hasn't resolved.   I'm not confident that was done correctly as I didn't see any information.  Anyway, we have the W-2 and the last paystub that match and according to the letter the next step would be to send in "small dollar case appeal" in writing.  

This has taken forever, is there any quicker way at this time?  If we send this in, any turnaround time experience out there? 

Thanks, Sandy

[BobKamman]

It would be helpful to have some dates and other facts.  When was the 106C sent, from where?  When and how (fax or mail) was the reply sent?  Did this result in a balance due, or just a lower refund?  

[Colmatt]

Sorry. 

106C received in mail 11-15-24 from Fresno office. 

We've been communicating back and forth with IRS since June.

It just reduced the refund by the $1800.

Return was filed in March.

We did not send reply to this yet and they did not offer fax as choice, just letter of small dollar case appeal in writing. 

thanks

[BobKamman]

The Taxpayer Advocate has a page explaining this letter, which states:  "The letter should explain why they disallowed part of the claim."  Does it?

The issue is $1,800 withholding on a W-2?  Is there anything unusual about the W-2?  Handwritten?   Withholding is a large percentage of the total wages?  

The TA page indicates you should explain why you disagree, while asking that if your explanation is not accepted they forward the case to Appeals.  You have two years to resolve the problem, without going to court. 

https://www.taxpayeradvocate.irs.gov/notices/letter-106-c/ 

[BobKamman]

Here's what the Manual tells IRS to do.  I would reply to the 106C with a copy of the W-2 in question.  If there was withholding on other forms, send them also and a summary of how they total the amount claimed on the return.  Shouldn't be something that a GS-12 in Appeals needs to be looking at, but with IRS you never know.  

https://www.irs.gov/irm/part21/irm_21-005-003r#idm139932262630416 

[Colmatt]

Thank you. 

The letter states they "couldn't verify the total federal withholding amount".  The taxpayer has several W-2s but only one from a small business with the exact $1800 withholding amount in question.  The W-2 was prepared by a payroll company, and the withholding was only 8% of wages so not large.  

If I'm sending letter requesting "a small dollar case appeal" as the letter directs, with evidence, do I still add wording: if the IRS does not agree you are entitled to the additional refund, that they forward your request to the IRS Independent Office of Appeals (Appeals)?

Also, should I send summary of all W-2 and withholdings even though it's obvious this is the culprit? 

Thanks

[Colmatt]

Thanks, great reference.  I will do just that.

Take care

[BobKamman]

It might be obvious to you, but it may not be obvious to someone who has looked at it for 5 seconds instead of the 5 hours you have invested.  Send a summary of all the withholding. 

The way I read the instructions, your letter should state "this is why I disagree, but if you still don't allow this I want my case to go to Appeals."  Not  "Send this now to Appeals and this is what I want them to look at when it gets there."  

[Colmatt]

Very funny and thanks again.