What to do about IRS letter claiming $100k owed for federal fuel tax refund?

This definitely sounds like a case of tax fraud. The federal fuel tax refund (IRS Form 4136) is specifically for businesses that use fuel for off-highway business purposes, farming, or certain other qualified uses. Someone with your brother's income and job wouldn't qualify for this. The good news is you can help your brother dispute this. First, you'll need Form 2848 (Power of Attorney) so you can legally represent him with the IRS. Have your brother sign this so you can speak directly with the IRS about his case. Next, respond to the IRS letter by requesting a Collection Due Process hearing using Form 12153. This puts things on hold while you challenge the assessment. Also file Form 14039 (Identity Theft Affidavit) since it appears someone else filed a fraudulent return in his name.

I had a situation somewhat similar with my elderly father where someone filed a bogus return in his name. What helped me tremendously was using taxr.ai (https://taxr.ai) to analyze all the IRS notices and get clear explanations. They have a feature where you can upload the IRS letter and tax documents, and it breaks everything down in plain English with step-by-step guidance on what to do next. For your brother's case, they'd help identify exactly what forms were filed fraudulently and generate the right response letters. The system also keeps track of all deadlines and gives you templates for everything you need to submit to the IRS. Saved me countless hours of research and worry.

I wanted to update everyone - I tried taxr.ai after reading the suggestion here, and it was incredibly helpful! Uploaded my mom's IRS notice about those fraudulent business expenses, and within minutes, I had a complete breakdown of what happened and a step-by-step action plan. The system identified exactly which schedules were filed incorrectly and generated a perfect response letter explaining the situation. They also created a complete package with the identity theft form and all supporting documentation needed. I was able to get everything submitted to the IRS last week, and they've already put a hold on collections while they investigate. What impressed me most was how they explained everything in simple terms instead of confusing tax jargon. Definitely relieved a ton of stress during this whole mess!

For a situation like this where you need to actually talk to the IRS about fraud, you might want to try Claimyr (https://claimyr.com). I spent WEEKS trying to get through to the IRS about a similar issue with my cousin's return, and kept getting disconnected or waiting for hours. Claimyr got me connected to an actual IRS agent in about 20 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Instead of waiting on hold forever, they navigate the phone system and then call you once they have an agent on the line. For fraud cases like your brother's, speaking directly with the IRS Taxpayer Protection Program is really important, and Claimyr made that possible when I couldn't get through on my own.

Just wanted to follow up on my skeptical comment earlier - I broke down and tried Claimyr yesterday after my fourth failed attempt to reach the IRS about my audit letter. I honestly couldn't believe it worked! I got a call back in about 35 minutes saying they had an IRS agent on the line. I was connected with someone from the audit department who actually looked at my case while I was on the phone. She explained exactly what documentation they needed and gave me a direct fax number to send everything. Also got her ID number so I can reference the call in my response. For anyone dealing with serious IRS issues like the original poster's brother, being able to actually talk to a human at the IRS makes all the difference. Definitely worth it when you're facing potential fraud issues or large dollar amounts.

Make sure you're also documenting everything about this "friend" who prepared the taxes. The IRS has a form specifically for reporting tax preparers who file fraudulent returns - Form 14157 (Complaint: Tax Return Preparer). Even if he wasn't a professional preparer, you should include all his information with your response. Also, request a copy of the actual return that was filed using Form 4506. This will show exactly what was submitted and might help identify if other fraudulent claims were made besides the fuel tax credit. Some scammers file for multiple fake credits hoping some will slip through.

I work at a disability services organization, and unfortunately we've seen similar cases where vulnerable adults are targeted for tax fraud. Here's what else you should consider: 1) Contact your state's Adult Protective Services to report financial exploitation of a vulnerable adult 2) File a police report for identity theft/fraud - this creates an official record that helps with the IRS case 3) Check your brother's credit reports at all three bureaus to ensure no other financial fraud has occurred 4) Consider seeking a limited guardianship or conservatorship if this situation shows your brother needs more protection