In October of 2024 taxpayers retained Alizio Law to help with an IRS matter. The taxpayers had been receiving collection notices from the IRS. The issue: taxpayers sold their principal residence but failed to report this transaction on their 2018 income tax return. The proceeds of the sale were reported to the IRS by an attorney involved in this transaction filing form 1099-S. The IRS used the proceeds reported on the 1099-S to issue a tax assessment. The assessment was large because it did not take into account the basis of the property sold or the exclusion of $250,000 (or $500,000 if filing jointly) of gain on the sale of a principal residence (IRC Sec 121).
Alizio Law calculated the gain on the sale of the property. A proforma 2018 tax return was prepared to calculate the amount of tax due if the transaction was properly reported on tax return. An Automated Underreporter Reconsideration request package was drafted and submitted to the IRS. The IRS reviewed the information and made adjustments to account reducing amount owed by over $646,500.
“It is a great feeling being able to get this type of a result for a client” – Peter E. Alizio