How do I fight the IRS?

[basil]

I think they made a mistake on calculating my refund.

Basically, I am claiming an education credit for the tuition I paid last year. Initially, they sent me a letter saying I had made an arithmetic error in calculating the education credit. I spoke with a rep on the phone who could not find an error. She recommended I send a letter, so I did. I got a response to today with a post-it saying "You did receive your education credit and your corrected refund [which was minus education credit] was correct.

The print out included clearly states "education credit $0" so it''s obvious to me that I did not receive credit for it.

What should I do now? Send another letter asking for further review? Do I even have any recourse at this point? I am so frustrated, because the people I talk to don''t even seem to understand basic tax concepts.

 

[Skippy123]

Can you go down to the IRS building and talk to them? It actually take persistence with them. I am sorry.

 

[Kismet]

You need to make things as easy as possible for them so everything has to be spelled out as simply as possible. Include copies of all correspondence from them and copies of any letters that you''ve previously sent.

1. spell everything out in re: form before you start the letter and by everything I mean your name, ssn, tax year, date of latest letter they sent, tracking code of that letter.

2. specify that you''re responding to that letter (or letters) and enclose a copy of it (them). Explain that you think they''re in error in calculating your credit to be zero. Explain why you think they''re in error and back it up using cited passages from the Internal Revenue Code and/or Regs and not the form instructions. Basically walk them through the calculation using your numbers. I had X amount of education expenses, I''m allowed Y% of such expenses, limited to Z amount. My adjusted gross income is [lower than (whatever the limit is) and therefor I''m entitled to the entire credit] or [between lower limit and upper limit and therefore my credit is limited to Q amount] as taken on page 2, line whatever of Form 1040.

3. request that you be refunded the additional amount of the credit

4. let them know where you can be reached (phone number, postal address) if they have additional questions.

 

[partgypsy]

I found this on the internet. Sounds like for the 1st tax credit, only eligible fore the first two years of college. For both, you may not qualify if you are above certain gross income, or married, filing separately. Do any of these apply to you?


There are two education tax credits available, the Hope Credit and the Lifetime Learning Credit. The credits are based on education expenses paid for you, your spouse, or your dependents. During any particular year, you can claim only one of the credits for each student.
The amount of the credit is determined by the amount you pay for "qualified tuition and related expenses" for each student and the amount of your modified adjusted gross income (modified AGI).
Expenses that qualify are tuition and fees required for enrollment or attendance at an accredited college, university, vocational school, or other post–secondary educational institution that is eligible to participate in a student aid program administered by the Department of Education.
Qualified expenses do not include room and board, insurance, transportation, or other similar personal, living, or family expenses. Qualified expenses may include fees for books, supplies, and equipment only if the fees must be paid to the school for the student''s enrollment or attendance. In addition, qualified expenses may include student activity fees if the fee must be paid to the school for the student''s enrollment or attendance.
You can claim a Hope Credit only for an "eligible student." An "eligible student" is a student who:
1. As of the beginning of the year, has not completed the first two years of post–secondary education (that is, generally is a freshman or sophomore in college).
2. Is enrolled in a program that leads to a degree, certificate, or other recognized educational credential, for at least one academic period beginning during the year.
3. Is taking at least one–half of the normal full–time workload for the student''s course of study for at least one academic period beginning during the calendar year, and
4. Is free of any federal or state felony conviction for possessing or distributing a controlled substance as of the end of the year.
You can claim a Hope Credit for only two tax years for each eligible student. An eligible student can be you, your spouse, or your dependent for whom you claim an exemption.
The Lifetime Learning Credit is not based on the student''s workload. It is allowed for one or more courses that the student takes at an eligible educational institution. The credit is not limited to students in the first two years of post–secondary education. Expenses for graduate–level degree work are eligible. However, to be eligible for the credit, the student must be taking course work in order to acquire or improve job skills. There is no limit on the number of tax years for which the Lifetime Learning credit can be claimed for each student. The amount you can claim as a credit does not vary (i.e., increase) based on the number of students for whom you pay qualified expenses.
Both the Hope Credit and Lifetime Learning Credit may be reduced, or eliminated, if your modified adjusted gross income exceeds certain limits, based on your filing status. You cannot claim either credit if you are married filing a separate return. The credit is claimed on Form 8863 (PDF).

 

[partgypsy]

Basil, there is alot more info on the irs website. Another thing I''m thinking, is that they are acting almost like you already got paid for it. Could you be getting some other assistance that negates that credit?

partgypsy


://www.irs.gov/publications/p970/ch03.html#d0e3850
No Double Benefit Allowed
You cannot do any of the following:
• Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim a lifetime learning credit based on those same expenses.
• Claim a lifetime learning credit in the same year that you are claiming a tuition and fees deduction for the same student.
• Claim a lifetime learning credit and a Hope credit based on the same qualified education expenses.
• Claim a lifetime learning credit based on the same expenses used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or qualified tuition program (QTP). See Coordination With Hope and Lifetime Learning Credits in chapter 7 (Coverdell ESA) and chapter 8 (QTP).
• Claim a credit based on qualified education expenses paid with a tax-free scholarship, grant, or employer-provided educational assistance. See Adjustments to Qualified Education Expenses, later.
Adjustments to Qualified Education Expenses
If you pay qualified education expenses with certain tax-free funds, you cannot claim a credit for those amounts. You must reduce the qualified education expenses by the amount of any tax-free educational assistance and refund(s) you received.
Tax-free educational assistance. This includes:
• The tax-free part of scholarships and fellowships (see chapter 1),
• Pell grants (see chapter 1),
• Employer-provided educational assistance (see chapter 11),
• Veterans'' educational assistance (see chapter 1), and
• Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance.

 

[basil]

Thanks for the advice. I''ve photocopied all the documents and I''m going to mail another letter, I guess.

Part gypsy, I''m eligible for the lifetime learning credit, not the Hope credit. None of the reasons for not being eligible apply to me.

I did my taxes with TurboTax, so I really doubt there was a clerical/arithmetic error. It''s all very weird. They just seem extremely reluctant to even consider they may have made a mistake.

 

[partgypsy]

Basil, I would see if you could get on the phone with a representative of the IRS. It seems like there is some kind of miscommunication that might be cleared up if you can speak to someone.

 

[Skippy123]

Date: 6/18/2007 6:24:54 PM
Author: Skippy123
Can you go down to the IRS building and talk to them? It actually take persistence with them. I am sorry.

My parents had a similar situation. So talking to someone helps clear it up.

 

[basil]

I called them before and they were very unhelpful. The lady just said that she couldn''t figure out why I did not get the education credit and recommended I write a letter.

 

[Skippy123]

yes, my parents wrote letters certified and took names while calling.