Ignored Examination Letter
My client a ride sharing driver, filed his 2019 1040 on time in 2020. However, it seems he stretched the expenses a little more than he should & the IRS sent an examination letter, which he completely ignored.
He came to me for the first time in Dec 2023 asking to do his income tax for 2019, 2020, 2021 & 2022 and (of course) he didn't mention anything about what I indicated above.
I prepared all 4 years & told him to mail in 2019 income tax. Less than 3 weeks later he received a letter from the IRS demanding about $40k inclusive of $10K of penalties & interest. Of course he accused me of wrong doing. I told him there's noway that the IRS will respond that fast to a mailed-in return, and I asked him to create an online account with IRS so I can see what exactly happened. After i investigated the account I realized the facts I mentioned above. When I explained to him these fact the truth start to come out.
The IRS eliminated ALL the expenses he indicated on his return & taxed him on his total income without any expenses.
Though I am considering not to return his phone calls, I am also considering helping him out, earning extra income & gaining some experience. My question is how can I approach this with the IRS? I thought about amending 2019 but of course he doesn't have a copy of 2019.
