| name | taxpayer-correspondence |
| language | en |
| description | Drafts structured taxpayer correspondence summarizing tax records, income, deductions, credits, and tax positions. Covers IRS/state inquiry responses, audit preparation, advisor-client communications, and filing support. Use when drafting tax summary letters, responding to tax authority notices, preparing audit defense correspondence, or organizing client tax records into structured summaries. |
| tags | ["analysis","drafting","letter","regulatory","summarization","summary"] |
Taxpayer Correspondence
Drafts structured correspondence summarizing tax records and financial information for authority responses, audit preparation, or advisor-client communication.
Prerequisites
Gather before drafting:
- Tax returns — federal and state for relevant years
- Income documents — W-2s, 1099s (INT, DIV, MISC, NEC, B, R, SSA), K-1s
- Deduction/credit support — receipts, 1098s, 1098-Ts, charitable records
- Financial statements — bank/brokerage statements, business P&L if applicable
- Authority correspondence — IRS/state notices, inquiry letters, audit notifications
- Filing context — filing status, dependents, estimated payment history
Quick Start
- Collect all source documents for the relevant tax year(s)
- Build the identification block with taxpayer info and purpose
- Populate income, deductions, and credits — tie every figure to a source document
- Summarize tax position (liability, withholding, balance due/refund)
- If responding to a notice/audit, add the authority response section
- Run the compliance checklist
- List next steps with deadlines bolded
Output Structure
1. Identification Block
| Field | Content |
|---|
| Taxpayer Name | Full legal name |
| TIN | Last four only (XXX-XX-####) |
| Tax Year(s) | All years covered |
| Filing Status | MFJ / MFS / Single / HOH / QSS |
| Purpose | Response to [notice] / Audit prep / Filing support / Advisory summary |
| Reference No. | IRS notice or case number if applicable |
2. Income Summary
Organize by IRC category. Reconcile each line to source documents. Flag discrepancies between 1099 reporting and return amounts.
| Category | Amount | Source Document |
|---|
| Wages & Salaries (Line 1) | $ | W-2 from [employer] |
| Self-Employment (Sch C) | $ | 1099-NEC, P&L |
| Interest (Sch B) | $ | 1099-INT |
| Dividends (Sch B) | $ | 1099-DIV |
| Capital Gains/Losses (Sch D) | $ | 1099-B |
| Rental Income (Sch E) | $ | Lease agreements |
| Retirement Distributions | $ | 1099-R |
| Other Income | $ | [specify] |
| Adjusted Gross Income | $ | |
3. Deductions & Credits
Deductions:
| Deduction | Amount | Authority | Documentation |
|---|
| Standard / Itemized | $ | IRC §63 | |
| Mortgage Interest | $ | IRC §163(h) | Form 1098 |
| SALT (capped $10K) | $ | IRC §164 / TCJA §11042 | State returns, property tax bills |
| Charitable Contributions | $ | IRC §170 | Receipts, acknowledgment letters |
| Business Expenses | $ | IRC §162 | Receipts, mileage logs |
| Retirement Contributions | $ | IRC §219 / §401(k) | Plan statements |
| HSA Contributions | $ | IRC §223 | Form 5498-SA |
Credits:
| Credit | Amount | Authority | Eligibility Basis |
|---|
| Child Tax Credit | $ | IRC §24 | Qualifying children, AGI phase-out |
| EITC | $ | IRC §32 | Income limits, qualifying children |
| Education Credits | $ | IRC §25A | 1098-T, enrollment verification |
| Energy Credits | $ | IRC §25C/§25D | Manufacturer certification |
4. Tax Position Summary
| Item | Amount |
|---|
| Total Tax Liability | $ |
| Withholding (W-2, 1099) | $ |
| Estimated Payments (1040-ES) | $ |
| Credits Applied | $ |
| Balance Due / (Refund) | $ |
Include: prior-year carryforwards (NOLs, capital losses, credits), amended return history, and open statute-of-limitation periods (3 years per IRC §6501; 6 years if >25% gross income omission).
5. Authority Response Section
Include only when responding to IRS/state notice or audit.
- Notice/Issue Identification — restate each item questioned
- Position & Support — for each item: taxpayer's position, legal authority (IRC, Treas. Reg., Rev. Rul., case law), and supporting documentation
- Penalty Abatement — reasonable cause (IRC §6664(c)), first-time abatement, reliance on professional advice
6. Compliance Checklist
7. Recommendations & Next Steps
Prioritize time-sensitive items with bold deadlines. Include actions required, documents to gather, estimated payments due, and planning opportunities. Flag statute-of-limitation or response deadlines prominently.
Pitfalls & Checks
- Privacy — never include full SSN/TIN; last four digits only
- Reconciliation — tie every figure to a source document; note unresolved discrepancies explicitly
- No fabrication — identify document gaps; never estimate or fabricate figures
- Uncertainty — disclose reasoning and uncertainty level for ambiguous positions
- Audience tone — plain language for clients; precise IRC terminology for authority responses
- Circular 230 — include disclaimer on written tax advice when applicable; do not provide covered opinions without appropriate disclaimers
- State considerations — address state-specific conformity or decoupling from federal provisions
