Can I do anything about a partial disallowance received in the mail. It says we couldn’t verify the total federal withholding amount you reported on your tax return.

[BSSE1]

We received the following notices from the IRS.

February 12, 2024, I received a letter (LTR 4464C) That Stated:

“Dear Taxpayer – We received your income tax return and we are verifying its accuracy.  We’re holding your refund until we finish reviewing the information reported. 

We selected your return to verify one or more of the following:

• Income
• Income tax withholding
• Tax credits
• Business Income"

Then (Mach 11, 2024) I received a notice CP05A – You need to send supporting Documentation. 

They requested supporting documentation showing dates and wages were earned, the gross income received, and federal tax withheld for the tax return.

"Documentation can include:

• Copies of at least 3 pay statements or check stubs, including the end of the year statement/check stub. (Don’t send a copy of Form w-2, Wage and Tax Statement)"

My wife and I sent in the pay statement requested (3/15/2024).

Then we received a certified letter dated April 4, 2024 (LTR 106C)

"Amount of claim:           $2,234.00

Dear Taxpayer:

                CLAIM OF PARTIAL DISALLOWANCE

This letter is your notice that we partially disallowed your claim for credit or refund for the period above.  We allowed only $1,441.00 of the claim.

WHY WE PARTIALLY DISALLOWED YOUR CLAIM

 We partially disallowed your claim because we received your response; however, we couldn’t verify the total federal withholding amount you reported on your tax return.  We corrected your account to reflect the amount shown in our records.”

Now my wife and my return is very simple – just wages earned, Charity (tithing to Church).  Matter of fact – The Your Audit Risk Results from Turbo tax was squarely on the low side.   I verified that the amount from the W-2s matched what was in the return.  I see no error on my part at all.

There is no other explanation for why the full amount of the claim was disallowed.

My plan is to request a small dollar case appeal for a claim.  However, my best evidence is to use the W-2 issued by the employers to show the total federal amount withheld.   

Is there anything else I should review or provide to verify our easily-verified income for 2023?

I would appreciate any thoughts, advice, instructions.

[DawnC · Accepted solution]

You are not being audited.  Check your Form 1040.  Specifically, look at Line 25 (federal withholding from tax forms).   If your actual tax forms match what is entered on Form 1040, you should have no problem disputing their findings.   Considering you sent pay stubs that verify the withholding amounts, I would expect them to adjust their records.   You have different notices from different IRS departments, so it appears they are not on the same page.    Maybe the employer did not remit what they withheld??   All you can do is to respond timely and go through the process until it is worked out.    Taxpayer Advocate Services  (just in case)

[BSSE1]

Thank you DawnC.    Line 25d = W-2 (Federal Income Tax withheld) = Pay Stubs submitted.  That is why I am confused.  We each talked with our HR/Payroll department.  They were baffled also.  I'll move forward my appeal.  Thanks again !