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Published:   |   Last Updated: February 8, 2024

TAS Resolves A Tale of Two Investment Claims

TAS Success Stories

Every year the Taxpayer Advocate Service (TAS) helps thousands of people with tax problems. This success story is only one of many examples of how TAS helps resolve taxpayer issues. All personal details are removed to protect the privacy of the taxpayer.

If a taxpayer has income from investments, the taxpayer may be subject to the Net Investment Income Tax (NIIT), in addition to other taxes. One taxpayer recently contacted TAS for assistance on NIIT. He had filed two claims for the same tax year. The first was a protective claim. This type of claim is filed to protect the taxpayer’s right to recover tax and is normally based on expected changes in IRS regulations, pending legislation or litigation. In this case, the claim was filed pending a U.S. Supreme Court ruling on the validity of the NIIT.

The second claim was filed because the taxpayer’s certified public accountant incorrectly included NIIT on the taxpayer’s return even though the taxpayer was not liable for this tax. The IRS denied the second claim based on the U.S. Supreme Court’s ruling in California v. Texas, 141 S.Ct. 2104 (June 17, 2021) (holding that the Affordable Care Act (ACA) was constitutional, and thus the NIIT, which was enacted as part of the ACA, was valid). TAS successfully advocated by explaining why the taxpayer was not liable for the NIIT. The IRS processed the taxpayer’s second claim and issued a refund of over $300,000 to the taxpayer.

When working with TAS, each taxpayer is assigned to an advocate who listens to the problem and helps the taxpayer understand what needs to be done to resolve their tax issue. TAS advocates will do everything they can to help taxpayers and work with them every step of the way. Occasionally TAS features stories of taxpayers and advocates who work together to resolve complex tax issues.

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