Received IRS audit results claiming I owe money but I disagree - what options do I have?

You're in what's called the "partial disallowance" zone - the IRS accepted some of your documentation but not all of it. The most likely scenario is they allowed your niece as a dependent (since you had complete documentation including birth certificate) but disallowed your nephew (missing birth certificate). When you received only $1,500 of your expected $7,800 refund, that reduction represents the tax benefits they denied. The CP22E notice for $546 is probably related to additional taxes owed once they recalculated your correct filing status. The good news is you still have options! You can request an audit reconsideration by sending Form 15096 along with any documentation you couldn't provide during the original audit (like your nephew's birth certificate). You generally have up to 2-3 years from the date of the assessment to request reconsideration. As for your 2020 return being accepted, that's not necessarily confirmation your 2019 documentation was sufficient. The IRS doesn't audit every return, and sometimes they focus on specific years or issues.

After dealing with a similar dependent verification headache last year, I found this amazing tool called taxr.ai (https://taxr.ai) that saved me so much stress. It analyzes your IRS notices and audit documents and explains exactly what the IRS is claiming vs what you submitted. For my situation, it spotted that the IRS had misinterpreted my documentation for my sister who lived with me, showing me exactly where the miscommunication happened. The platform walked me through creating a proper audit reconsideration request with all the right supporting documents highlighted. The coolest part was that it flagged specific parts of my submitted documents that weren't meeting the technical requirements the IRS was looking for. Apparently just sending some types of records isn't enough if they don't contain specific information the IRS requires.

I was initially skeptical about taxr.ai but gave it a shot after my frustrating back-and-forth with the IRS over my dependent care credit. The tool actually spotted that my daycare receipts were missing the provider's tax ID number, which was why the IRS kept rejecting them even though I had proof of payment! After fixing that one detail and resubmitting with their guided reconsideration package, I got approved for the additional $2,800 credit the IRS had initially denied. The whole process took about 6 weeks from submission to resolution. What surprised me most was how the tool explained which specific test each document was proving (residency test, relationship test, etc) so I could see exactly what was missing from my original submission. Honestly wish I'd found it sooner.

If you're still trying to contact the IRS about this issue, good luck getting through. I spent THREE WEEKS trying to reach someone about my audit reconsideration. Either constant busy signals or 2+ hour holds that eventually disconnected. I finally found this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in under 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c They basically navigate the IRS phone tree for you and call you back when they have an agent on the line. The agent I spoke with pulled up my file and explained exactly why they partially disallowed my dependents claim (missing school records) and what specific documentation I needed for reconsideration.

OK I take back what I said about Claimyr. I was super skeptical but my deadline was coming up fast and I was desperate. Not only did they get me through to the IRS, but I was literally talking to someone in 11 minutes after trying unsuccessfully for days. The IRS agent immediately pulled up my case, explained exactly which documents they had accepted vs rejected, and gave me specific instructions for the reconsideration process. Turns out they had rejected my cousin as a dependent because I sent a school record from the wrong tax year - something I would never have figured out on my own. Honestly kind of shocked this worked. Already submitted my reconsideration paperwork with the correct documentation. Definitely worth it just to not spend another week trying to get through.

Something similar happened to me, but I discovered you only have 30 days from the date on that CP22E notice to respond if you want to dispute it! After that, they'll start collection procedures. Two options: 1. Call the number on your notice and request more time to gather documents 2. File a formal protest letter if you have all your documentation One thing that helped me was getting an official transcript of my tax account from the IRS website. It shows exactly what they changed on your return and why. In my case, they disallowed one dependent but kept my head of household status.

make sure you request the audit reconsideration in writing!! i made the mistake of just calling and they said they had no record even though i talked to someone for like 45 mins. also get certified mail with tracking when you send anything to irs!!