I had a very nice gentleman walk into the office on Tuesday. He is an executive at a local business and he has received an IRS notice. The IRS checks your tax returns when you file and they compare what you have filed with what is reported to them. The IRS gets plenty of information regarding you, W-2′s, 1099′s, 1098′s and many other documents. The IRS compares your tax return with what they have.
If there is a discrepancy between the two, your tax return goes to the Automated Under Reporting Unit (AUR). My new walk in client had a notice from AUR, and the IRS wants $28,000 in taxes penalties and interest. Holy cow! We can solve his problem, it will be solved next week. He made the same mistake in 2010 & 2011. We will get both years fixed next week.
The professional fees to solve his problem, both years, will run him less than $200.
