Unfortunately, I did not sign up for the Audit Defense on my 2020 return. I've never needed 'audit defense' and I am capable of defending my own tax return and have extensive records to back up my numbers.
On my 1040 Sched C, the box is checked on line 32b which states 'Some investment is not at risk'. I have no idea how that box got checked, or what TurboTax query prompted that box to be checked. Nor why I was not directed to fill out form 6198 to detail those expenditures as required by the IRS. That alone would have prompted me to flag this issue and correct it. Seems unusual.
This one checked box has caused me 60 days of going back and forth with the IRS, just trying to figure out where the 'math error' is. The first agent I talked to was stymied that my Sched C deductible expenses on the E-file return I sent were absent on the IRS transposed copy. She said it was clearly an IRS error and referred me to a 'manager', saying someone would call me back within 30 days. A month later and still no response from IRS.
I finally contacted another agent on the phone today and just learned it was line 32b that was somehow checked on my 1040, and since Form 6198 was not included [Thanks Turbo Tax!], they disallowed my deductions and expenses leaving me with a tax liability.
My recourse now is to disagree with the original CP11 and re-file an amended tax return WITHOUT the line 32b box checked - 32a checked instead.
This all could have been easily prevented if TurboTax had prompted an alert for Form 6198 when the line 32b box was checked - regardless of how the mistake occurred.
I greatly appreciate your input, JamesG1 !
