Very honored to represent two wonderful Fort Worth folks. They sold their house last year, and made a lot of money! They did their own taxes with TurboTax. When it came to reporting the gain from the sale of their house, they googled and learned that the gain (profit) was exempt. No tax owed. However, they did not properly report the transaction.
Even though the money made (the gain) was not taxable, the IRS has very strict requirements regarding disclosure of the transaction. When the parties failed to disclose the transaction the IRS computer read it as “undisclosed income” and assessed taxes, penalties, fines and interest.
Background: Under Federal Law, when a house is sold, the title company must issue a special 1099 to the seller. In this case, the 1099 issued to the seller was in excess of $900,000! When the parties failed to address the issue when they filed their taxes, the IRS assumed that the entire $900,000 was unreported income.
The assessment (bill) the couple received from the IRS was in excess of $400,000
We immediately filed a Petition in US Tax Court with supporting documents. And we filed a legal brief. After a sit down meeting with the Office of General Counsel for the IRS, the IRS agreed with your position.
The U.S. Tax Court Judge issued an agreed ruling relieving our clients of any and all taxes, penalties, assessments, fines and costs!
The appropriate documents were filed in the Tarrant County Deed Records to assure there was no lien placed on our clients assets.
Truly an honor to represent these folks who needed IRS help ! Dale