Initial Client Situation Overview
In our recent case study, we delve into a challenging situation faced by one of our clients who received a notice of deficiency from the IRS, allowing only 90 days to petition the tax court. The crux of the matter was a proposed balance due of over $200,000 for the tax year 2020. This presented a significant challenge, prompting the client to seek assistance from Cumberland Law Group.
Client Background
Our client, understandably distressed by the substantial proposed tax liability, approached us seeking a resolution. The primary concern stemmed from an erroneous calculation of gain by the IRS. With a team of experienced tax attorneys at the helm, we set out to comprehensively address the complexities of the case.
Challenges
The key challenge lay in rectifying the inaccuracies in the IRS’s calculation of gain, specifically the omission of the mortgage and closing costs. Additionally, our client was eligible for the sale of a home exclusion, a factor crucial to the overall tax liability but overlooked by the IRS.
Cumberland Law Group Methodology in Action
To address these challenges, our team employed a meticulous approach. Conducting an in-depth review of the client’s records, including closing and title documents, we identified the critical issues. The methodology included highlighting the incorrect calculation of gain by the IRS, emphasizing the exclusion eligibility, and presenting a compelling case to the tax court.
The Results
The culmination of our efforts resulted in a significant triumph for our client. The tax court agreed with our arguments, leading to a substantial reduction in the initially proposed tax liability. What was once over $200,000 was successfully brought down to a mere $6,488. This outcome not only relieved our client of a considerable financial burden but also allowed them to move forward with confidence, putting the tax challenge behind them.
If you find yourself in a similar predicament or have questions about your tax situation, please feel free to reach out to our firm. The Cumberland Law Group team is always ready to navigate complex tax situations and achieve favorable outcomes for our clients.
Thank you for taking the time to explore this client success story with us.
