Taxpayer came to our firm with over $30k in liability from a tax return where the IRS made a “quick change” (an adjustment on a return that is not from an audit) on a tax return filed five years prior from our representation. The IRS stated our client did not report stock sales from Incentive Stock Options (“ISO”) and the taxable income the sales generated. After reviewing the IRS notice, the tax return, and financial information provided, we determined the ISOs were in fact Disqualified ISOs, which has different tax treatment as ISOs. Since Disqualified ISOs are already included in wage income, the IRS’s “quick change” resulted in double-taxing the client. We reached out to the IRS and presented our case citing the differing tax treatment and the substantiation we had to prove our position. The IRS response was to remove the entire liability; meaning the client no longer owed any money to the IRS.
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“TAX-DEAL”: 829-3325
“TAX-DEAL”: 829-3325
