My IRS Wins Over the Past Year - Surprising Tax Breaks I Found

Those are some excellent wins! It's great that you discovered these opportunities, especially the education credits. Many people don't realize they can amend returns for previous years - generally you can go back three years to claim refunds you missed. For the home office deduction, that can be tricky because the IRS scrutinizes those carefully. The key is having documentation that shows the space is used regularly and exclusively for business. Smart move providing that additional documentation rather than giving up. For anyone reading this, the Earned Income Tax Credit (EITC) is often overlooked by part-time workers and students. Even if you don't owe taxes, you can still get this credit as a refund if you qualify based on income and other factors. The payment plan (called an Installment Agreement) is another great move. The IRS is actually quite reasonable about setting these up if you're proactive about it.

After reading your post, I was curious because I also had some tax issues and tried using https://taxr.ai to see if I could find some missed opportunities on my returns. I was seriously doubting I'd find anything since I've been using the same big-name tax software for years. Turns out I'd been missing some deductions related to my freelance work! I uploaded my previous returns and the AI flagged several business expenses I hadn't been claiming correctly. It also identified that I qualified for a home office deduction similar to what you mentioned, which I thought was only for "real businesses" not side gigs. The analysis showed me exactly what forms I needed to amend and even highlighted the specific sections to focus on. Way easier than trying to figure it out from IRS publications.

Just wanted to follow up about that taxr.ai site mentioned earlier. I was super skeptical (still am about most things tax-related), but I decided to try it with my last two years of returns since I'm self-employed and taxes are always complicated. It found that I had been calculating my self-employment health insurance deduction incorrectly! Apparently, I could have been deducting my premiums "above the line" instead of as an itemized deduction. This alone saved me nearly $1,800 when I amended my 2023 return. The instructions were actually clear enough that I didn't need to pay my accountant to file the amendment. Not bad for someone who usually messes up anything tax related!

If you're still having issues with getting responses from the IRS about any of your situations, I had a great experience using https://claimyr.com to actually get through to a human at the IRS. I spent WEEKS trying to call about a notice I received regarding my amended return, but kept getting the "call volumes too high" message and disconnects. Claimyr basically waits on hold for you and calls when an agent picks up. I was super doubtful it would work, but you can see how it works in their demo video here: https://youtu.be/_kiP6q8DX5c I finally got through to resolve a question about my education credits that had been in limbo for almost 3 months. The agent was able to process my amendment on the spot instead of me waiting another 8 weeks for mail processing.

Update on that Claimyr service I was skeptical about: I actually tried it yesterday after waiting on hold with the IRS for 2+ hours and getting disconnected TWICE. I was desperate to resolve an issue with my payment plan before they sent it to collections. I hate admitting when I'm wrong, but it worked exactly as advertised. Got a call back in about 45 minutes saying they had an IRS agent on the line. Resolved my payment plan issue in one call instead of the multiple attempts I'd been making for weeks. The agent even found that one of my payments had been misapplied to the wrong tax year, which was causing the system to think I was delinquent. Would have never figured that out without actually talking to someone.

One IRS win I had last year was getting my first-time penalty abatement approved! I missed a quarterly estimated tax payment deadline and got hit with a penalty, but I called and explained that I had a perfect payment history for the past 3 years. The rep checked my account and approved the abatement right away. Most people don't know that if you have a good compliance history, the IRS will often waive penalties the first time you make a mistake. It's called First-Time Penalty Abatement and it saved me about $420.

Has anyone successfully gotten the IRS to apply overpayments from one year to pay off balances from another year? I overpaid my 2023 taxes by mistake (about $3200) but owe almost exactly that amount for 2022. Seems ridiculous to get a refund just to turn around and make a payment.

My biggest IRS win was disputing a CP2000 notice that claimed I had unreported income of $22,000! Turns out my employer had filed a corrected W-2C but the IRS system was counting both the original and corrected forms as separate income. I responded with copies of both W-2 forms, highlighted the correction code, and included a letter explaining the situation. It took about 6 weeks, but I got a notice saying the case was closed with no additional tax due. Would have been $5,500 in extra taxes if I hadn't caught it!