Sample. Taxpayer Identification Number: [ ] Kind of Tax: [ ] Amount of Additional Tax: $[ ] [ ] [ ] [ ] Tax Year(s): [ ] [ ] [ ] [ ]

Transcription

1 Department Transmitta Number Date of Issue of the /01/2013 Treasury Originating Office Form Number SE:S:CCS:CRC:EP 3338C IDRS CORRESPONDEX Interna Revenue Service Tite: Audit Reconsideration Acknowedgement Letter Number of Copies Distribution to: Former Letter Origina 1 to TP 3338C (Rev 01-11) OMB Cearance Number Expires - IMF Letters Considered in Revision: Taxpayer Identification Number: [ ] Kind of Tax: [ ] Amount of Additiona Tax: $[ ] [ ] [ ] [ ] Tax Year(s): [ ] [ ] [ ] [ ] Dear [ ] We received your inquiry requesting a reconsideration of prior audit resuts for the tax year(s) shown above. In order to begin the audit reconsideration process, you must submit supporting documentation for each disputed item from your origina audit. You can find those items on the Form 4549, Income Tax Examination Changes, you received during the audit. If you did not receive your Examination Report, you may contact to obtain a copy. The supporting documents you provide must be compete enough for the examiner to make a fair determination. Aso, the documents must be new information that the examiner has not aready considered during the origina audit. If the information that you provide us supports a reduction to your tax iabiity, we wi make the necessary adjustments to your account. Likewise, if the facts, circumstances, and tax aws do not support a reduction, we wi not adjust your iabiity. We wi send you a written expanation of the reason(s) for our determination. A If you have not previousy done so, pease compete Form 12661, A "Disputed Issue Verification" to te us what items you are A disputing. Attach any documentation that you have not previousy A submitted to support your position. Pease submit Form 12661, your A documentation, and a copy of the Examination Report to the address A isted at the cose of this etter. A

2 B If you previousy identified the disputed issues with an IRS Contact B Empoyee, refer to the information in the foowing paragraphs that B woud be required to support your position. Pease submit the B documents as requested for each item in dispute to the address isted B at the cose of this etter. B C MARRIED FILING SEPARATE RETURN C Pease furnish your spouse's fu name, current address, and C socia security number. C D HEAD OF HOUSEHOLD D Acceptabe documentation incudes: D D - If you were divorced or egay separated, a compete copy of D divorce decree or separation agreement, incuding any modifications. D - Copies of canceed checks and receipts for the quaifying person's D expenses such as mortgage payments, rent, utiities, repairs, D insurance, food, cothing, and other persona expenses for 6 months. D - Records to show who paid or contributed toward the support of the D quaifying person(s) and the amount contributed by each person D invoved, incuding amounts received from governmenta agencies such D as food stamps or any payments made by any socia service agency. D - Copies of schoo records, driver's icense and medica bis for D the quaifying person to verify his or her pace of residence for 6 D months. D E QUALIFYING CHILD FOR EARNED INCOME TAX CREDIT (EITC) E Athough not a-incusive, acceptabe documentation incudes: E E - Copies of documents that verify your reationship to the chid, such E as: E Birth certificates or other officia documents of birth that E verify your reationship to the chid E Marriage certificates that verify your reationship to the chid E Letter from an authorized adoption agency E Letter from an authorized pacement agency or appicabe court E document E - If the quaifying chid was a student under age 24, copies of E officia schoo records showing they were a fu-time student for at E east five months during the tax year. E - If the chid was permanenty and totay disabed at any time during E the tax year, a etter from the chid's doctor or other heathcare E provider verifying the disabiity. E - Copies of records that show your quaifying chid ived with you for E more than haf the tax year. These records must be officia and must E show the name and address of each quaifying chid. Some exampes of E records you coud use are schoo records, doctor records, a andord E statement, or a etter from the cergy, etc. on officia stationary. E F DEPENDENCY EXEMPTIONS F The foowing tests must be met for an eigibe Quaifying Chid (QC) F and Quaifying Reative (QR). F F - Quaifying Chid (QC) Requirements: F Athough not a-incusive, acceptabe documentation incudes: F - Birth and marriage certificates that verify your reationship to the F chid ony if the chid is not your natura or adopted chid.

3 F - If the quaifying chid was a student under age 24, copies of F officia schoo records showing they were a fu-time student for at F east five months during the tax year. F - A doctor's (or other) heathcare statement to verify the chid was F permanenty and totay disabed at any time during the tax year. F - Verification you paid more than haf of the chid's support during F the tax year. F - A statement of account from a chid support agency, a statement from F any government agency verifying amounts you and/or your dependent F are: received during the year, proof of odging costs (renta agreement), F proof of househod expenses (utiities or repair bis), daycare or F doctor bis for the chid, or cothing bis for the chid. F - Copies of records that show your quaifying chid ived with you for F more than haf the tax year. These records must be officia and must F show the name and address of each quaifying chid. Some exampes of F records you coud use are schoo records, medica records, a F andord statement, or a etter from the cergy, etc. F F - Quaifying Reative's (QR) Requirements: F Athough not a-incusive, acceptabe documentation incudes: F F - If the person is a bood reative, copies of birth or marriage F certificates to verify your reationship. F - If the person is not a bood reative, proof the person ived with F you during the entire tax year. Some exampes of records you coud F use are schoo records, doctor records, a andord statement, or a F etter from the cergy, etc. F - Verification you paid more than haf of the quaifying reative's F support during the tax year: a statement of account from a chid F support agency, a statement from any government agency verifying F amounts you and/or your dependent received during the year, proof of F odging costs (renta agreement), proof of househod expenses F (utiities or repair bis), daycare or doctor bis for the F quaifying reative, or cothing bis for the quaifying reative. F G FORMS W-2, 1098, 1099 G Because your tax return did not report the same income or deductions G as reported to the IRS by empoyers or trustees, you must provide G verification of a income received from the foowing sources, G incuding, but not imited to: G G - Wages, saaries, tips, fees, commissions (copies of W-2's). G - Interest, dividends, unempoyment compensation, proceeds from G bartering, gambing winnings, prizes, awards, tips, disabiity G income, etc. (copies of Forms 1098, 1099, 5498, W-2G). G - Pensions, annuities, royaties, estate or trust income and G non-empoyee compensation (copy of Forms 1099R, 1099S, 1099MISC, G K-1). G - Aimony received (a copy of divorce decree or separation G agreement). G - Income earned from providing chidcare or other sef-empoyment G (copies of records used to figure income). G H INDIVIDUAL RETIREMENT ARRANGEMENTS H If you meet one of the exceptions to the 10% Penaty, pease provide H documentation that shows you met an exception. Some of the most common H exceptions

4 H H - Totay and Permanenty Disabed H - Substantiay Equa Payments received H - Distribution for Higher Education H - First Time Homebuyer H - Roover to another Quaified Pan H - Death Benefit H - Quaified Domestic Reations Order (QDRO) H H Documentation can incude, but is not imited to, bank statements, H canceed checks, corrected 1099-R, statement from medica H practitioner expaining disabiity, and a copy of the Quaified H Domestic Reations Order (QDRO). H I MOVING EXPENSES (Form 3903) I Athough not a incusive, acceptabe forms of documentation incude: I I - Copies of canceed checks and receipts verifying the amounts you I paid to trave to your new home and to move your househod goods and I persona property. I - A statement from your empoyer showing the aowance or I reimbursement paid to you for moving expenses. This statement I shoud identify the amounts by kind of expense, such as automobie, I train, pane and transportation of househod goods and persona I property. I - A statement from your empoyer as to whether the reimbursement was I incuded on Form W-2. I - The names and reationship of househod members who moved with you. I - The name and address of each empoyer you have worked for since I moving to your new pace of empoyment and the dates you were I empoyed by each. I - Computations showing number of mies by direct route from your od I residence to your new pace of empoyment and from your od I residence to your od pace of empoyment. I J SELF EMPLOYMENT HEALTH INSURANCE (1040 page 1) J Acceptabe documentation incudes: J J - Proof of amount paid for heath insurance. J - If you or your spouse is an empoyee, copies of statement(s) from J a of your empoyers as to your eigibiity to participate in the J empoyer's heath pan at any time during the year. J - Proof the sef-empoyment pan provides nondiscriminatory heath J insurance coverage to empoyees. J K ALIMONY PAYMENTS K Acceptabe documentation incudes: K K - Compete copy of your divorce decree and any modifications, copies K of your canceed checks, money orders or pay statements showing K wage garnishments, and information to verify that you are current K with chid support (if appicabe). The socia security number of K the recipient is aso required. K L MEDICAL AND DENTAL EXPENSES (Schedue A) L Acceptabe documentation incudes: L

5 L - Copies of canceed checks, receipts or statements for a medica L savings accounts, medica and denta expenses (incuding medica L insurance) showing the person for whom each expense was incurred, L aong with any insurance or empoyer reimbursement records. Submit L a copy of your medica insurance handbook or poicy describing the L benefits and reimbursement poicy, and verification of premium cost. L - For prescription drug expenses, copies of statements or receipts L showing the amount paid and the date purchased. L - For other expenses (incuding equipment, capita improvements, L transportation and odging) proof of payment and statements to show L cost and medica requirement. L M STATE AND LOCAL INCOME TAXES/STATE TAX RETURN (Schedue A) M Acceptabe documentation incudes: M M - Copies of state or oca returns for the years invoved. M - Copies of canceed checks and receipts for taxes paid during M the year. M - W-2 or other statement showing state and oca income tax withhed M during the year. M - Documentation to support state and oca taxes paid on a motor M vehice, aircraft, boat, home, or home buiding materias if caimed M in addition to the tabe amount. If actua vaue used, submit M computation and support for purchase of arge items. M N REAL ESTATE AND PERSONAL PROPERTY TAXES (Schedue A, C, E, or F) N Acceptabe documentation incudes: N N - Verification of your ega ownership of the property. N - Copies of canceed checks, mortgage statements or receipts for N taxes paid. Submit a copy of your property tax bi and N documentation for any property tax rebates or refunds. N - A copy of the settement statement if rea property was sod or N purchased during the year. N - Verification of any specia assessments deducted as taxes and an N expanation of their purpose. N O INTEREST PAID (Schedue A, C, E, or F) O Acceptabe documentation incudes: O O - Copies of mortgage interest statements, equity credit ines/oans, O and and mortgage contracts, and amortization schedues for any O outstanding oans. Submit copies of canceed checks, receipts or O other evidence of payments made for the year(s) under examination. O - Copies of statements from financia institutions, investment O brokerages or persons to verify your tota investment interest O deduction. O P CONTRIBUTIONS (Schedue A) P Acceptabe documentation incudes: P P - If the contribution was ess than $250.00, copies of your canceed P checks and receipts for contributions to churches or other P organizations. P - If you contributed more than $ to a singe organization, an P acknowedgement/statement or receipt from the organization showing P the date of the contribution, amount of the contribution, a

6 P description of any goods or services received, and an estimate of P the vaue of the goods and services received, or if the goods and P services provided are soey intangibe reigious benefits, then a P statement to that effect. P - If the contribution was other than money, the name and address of P the charitabe organization and the description of the item(s) P contributed. A copy of the appraisa of the fair market vaue of P each item on its contribution date and its origina cost. P - If you caimed expenses for attending a convention or simiar P activity, a statement showing you were an officia representative P of the organization. Aso, another form of documentation is the P organization's reimbursement poicy, expense receipts and an P itinerary or agenda for the activity. P Q CASUALTY AND THEFT LOSS (Schedue A) Q Acceptabe documentation incudes: Q Q - If your property was insured, a copy of the insurance report Q showing the date and nature of the oss or damage to the property. Q This report shoud aso show the amount of damage, amount of Q coverage carried, and the date and amount of the caim paid by Q insurance, or the amount of the caim pending. Q - If your property was not insured, copies of the fire or poice Q department reports on osses from the fire, theft, or accident. Q - Photographs or videos showing the extent of the oss, if avaiabe. Q - An appraisa from a quaified estimator or adjuster showing the fair Q market vaue of the property before and after the casuaty or Q showing an estimate of the damages. Q - Verification of the cost or other basis of the property, the date it Q was acquired, and the actua cost of repairs. Q R BUSINESS USE OF HOME - FORM 2106 EXPENSE (Empoyee Business Expenses R on Schedue A) R Acceptabe documentation incudes: R R - A statement from your empoyer stating that you are required to R maintain an office in your home. R - Copies of canceed checks and receipts verifying expenses incurred, R such as interest, taxes, insurance, repairs and utiities. R - A cacuation of the tota square footage of your home and the tota R square footage used for business. R - Copies of the documents that estabish the cost or other basis of R the home, incuding the vaue of the and. R S LEGAL, TAX, AND INVESTMENT COUNSEL FEES (Schedue A) S Acceptabe documentation incudes: S S - Copies of canceed checks, receipts, and statements showing the S amount of the payment and the purpose of the expense. S T MISCELLANEOUS DEDUCTIONS (Schedue A) T Acceptabe documentation incudes: T T - An itemized isting of a items caimed. T - Verification of the deductions caimed. T U CREDIT FOR CHILD AND DEPENDENT CARE EXPENSES (Form 2441)

7 U Acceptabe documentation incudes: U U - If you were divorced or egay separated, a compete copy of your U divorce decree or separation agreement (incuding any U modifications). Aso incude the dates you had custody of the chid U and dates the other parent had custody of the chid. U - The name, address and socia security number of each person or U organization you paid for chidcare or for the care of a disabed U dependent. Aso submit copies of canceed checks and receipts U documenting the expenditures. If you do not have canceed checks, U provide a statement from each person or organization showing the U name, address, period of care and amount paid. U - If you paid the expenses for a disabed dependent, a doctor's U statement showing that the dependent was physicay or mentay U unabe to care for himsef or hersef. U - A statement from your empoyer outining any dependent care benefits U paid. U V FOREIGN TAX CREDIT (Form 1116) V Acceptabe documentation incudes: V V - Copies of receipts or statements showing foreign source income and V foreign income taxes paid or withhed from your earnings. Provide V transations of the necessary words so that the foowing items are V cear. V Type of foreign tax paid or accrued; V Date of payment or accrua; V Exchange rate used to convert foreign currency to U.S. doars; V and V Amount of payment V - A compete copy of the tax return(s) fied with foreign authorities V covering the same periods as your U.S. tax return. Ceary indicate V the tax iabiity and refund (or baance due) on the foreign return. V - A ist and verification of the foreign taxes paid or accrued that V reate to tax years other than the one being examined. Provide V copies of foreign tax returns for those years. V - A schedue showing how you computed the credit carryback or V carryover, if appicabe. V W FEDERAL INCOME TAX WITHHOLDING/EXCESS FICA W Acceptabe documentation incudes: W W - Copies of a Forms W-2, W-2G, or 1099 to verify withhoding or W excess FICA withhed by empoyers or trustees. W X CAR AND TRUCK (Empoyee Business Expenses on Schedue A, or Schedue X C, E, or F Expenses) X Acceptabe documentation incudes: X X - Copies of repair receipts, inspection sips, and other records X showing tota mieage for the year. X - Copies of ogbooks and other records to support business mieage X caimed. X - A copy of your appointment book or caendar of business activities X for the year. X - If you are caiming actua expenses, copies of paid bis, invoices X and canceed checks or automobie expenses. These woud incude

8 X gas, oi, tires, repairs, insurance, interest, tags, taxes, parking X fees and tos. X - A copy of the bi of sae or other verification to estabish cost X or other basis in the vehice, incuding the trade-in of another X vehice. X Y EDUCATION EXPENSES (Empoyee Business Expenses on Schedue A) Y Acceptabe documentation incudes: Y Y - A statement from your empoyer expaining whether you needed the Y education to keep your job, saary or status. Expain how the Y education heped maintain or improve the skis needed in your job Y and how much reimbursement you received. Break down the Y reimbursement by category of expense. Y - Copies of canceed checks and receipts to verify amounts Y you spent for tuition, books, transportation and other educationa Y expenses. If you were away from home overnight for educationa Y purposes, provide expense verification for your meas, odging and Y trave. Y - Documents such as transcripts, course descriptions and cataogs Y showing your period of enroment in the educationa institution Y and the principa subjects studied. Y - Compete information about any schoarship or feowship grants, Y incuding amounts you received during the year. Y Z EMPLOYEE BUSINESS EXPENSES (Verification of Reimbursement or No Z Reimbursement) Z Acceptabe documentation from your empoyer incudes: Z Z - A copy of your job description or a brief outine of your duties. Z - A copy of the reimbursement poicy or a statement that there is no Z reimbursement poicy. Z - Verification of whether or not reimbursement is incuded on your Z W-2, and if it is, where the reimbursement is reported to. Z - The amount and kind of expense reimbursed, charged or provided. Z - The specific expenses not covered by reimbursement poicy. Z - The name of the territory assigned to you and the dates and Z ocations of temporary jobs. Z - Copies of the expense vouchers submitted to your empoyer. Z - Copies of ogs, diaries or other records of expenses showing a Z expenses incurred, job ocations, and dates you were at each Z ocation. Z 0 GAS, FUEL AND OIL (Empoyee Business Expenses on Schedue A, or 0 Schedue C, E, or F Expenses) 0 Acceptabe documentation incudes: Copies of canceed checks and receipts for gas, fue, and oi 0 expense. 0 - Documentation that verifies the amount of the Gas Tax Credit caimed 0 was aso reported as income. 0 1 INSURANCE EXPENSE (Empoyee Business Expenses on Schedue A, or 1 Schedue C, E, or F Expenses) 1 Acceptabe documentation incudes: Copies of a insurance poicies for which you deducted premiums.

9 1 - Copies of canceed checks for insurance paid, or invoices for 1 insurance owed. 1 2 JOB HUNTING (Schedue A) 2 Acceptabe documentation incudes: A copy of the og or diary showing your job hunting activity and 2 copies of canceed checks or receipts showing expenses paid, 2 incuding payments to empoyment agencies. 2 - A statement from your empoyer showing the amount of reimbursement, 2 if any. 2 - Documents to estabish the type of job you were seeking. 2 3 RENTAL EXPENSES (Schedue C or F) 3 Acceptabe documentation incudes: Copies of canceed checks and receipts to verify a renta 3 expenses caimed. 3 - A copy of the ease or renta agreement, canceed checks, and 3 statements for rent paid or owed during the year. 3 4 ENTERTAINMENT, MEALS, GIFTS AND OTHER EXPENSES (Empoyee Business 4 Expenses on Schedue A, or Schedue C Expenses) 4 Acceptabe documentation incudes: Copies of the records and receipts for entertainment expense and 4 meas you caimed. The records must have been made timey and must 4 show the name(s) and business reationship of the person(s) 4 entertained. The records aso must show the date, pace and purpose 4 of the entertainment and the amount of the expenditure. 4 - For entertainment faciities, copies of the records showing the 4 expenses you incurred. Show tota use, and business use of the 4 faciity if you maintained it. 4 - For business gifts, copies of records and receipts showing the cost 4 of the gifts you provided, the persons to whom the gifts were given, 4 and their business reationship. 4 5 TRAVEL, LODGING, AND OTHER EXPENSES (Empoyee Business Expenses on 5 Schedue A, or Schedue C Expenses) 5 Acceptabe documentation incudes: Copies of documents showing that this trave was reated to your 5 business. 5 - Copies of transportation tickets, receipts, and canceed checks to 5 substantiate the expenses you caimed. 5 - Copies of odging receipts and verification of the number of days 5 away from home overnight for business purposes. 5 - Copies of brochures, activity schedues, and agendas for a 5 conventions, cruises or meetings. 5 6 UNIFORMS, EQUIPMENT AND TOOLS (Empoyee Business Expenses on 6 Schedue A) 6 To substantiate this expense, you must provide the foowing: A statement describing the items caimed and an expanation of how 6 they reated to your empoyment. 6 - A statement from your empoyer stating whether or not the expense

10 6 was required. Aso, provide your empoyer's description of the 6 reimbursement poicy and the amount reimbursed on the aowance 6 paid; and 6 - Copies of canceed checks and receipts verifying expenses. 6 7 BAD DEBTS FROM SALES OR SERVICES (Schedue C) 7 Acceptabe documentation incudes: Verification of your debt, such as a note or contract estabishing 7 the debtor-creditor reationship. 7 - The fu name and the ast known address of the debtor. 7 - Evidence of your efforts to coect the debt. 7 - Evidence of the coectibiity of the debt in the year caimed. 7 - Evidence that the debt previousy was incuded in your income. 7 8 COPIES OF ALL FORMS 1099 FOR COMMISSIONS PAID (Schedue C or F) 8 Acceptabe documentation incudes: If Forms 1099 were not issued, the names, addresses, and socia 8 security numbers for recipients of commissions. 8 - Copies of contracts or other written agreements for contract abor. 8 - Copies of canceed checks and a other records to verify amounts 8 paid to each person in each contract. 8 9 COST OF GOODS SOLD (Schedue C) 9 Acceptabe documentation incudes: Copies of the physica inventory sheets for both the beginning and 9 ending inventory for the year. 9 - Copies of receipts, canceed checks, purchase journas or 9 summaries, and a other records for materias, suppies and other 9 costs incurred to raise, produce or purchase goods for resae. 9 - Copies of canceed checks, contracts and other records to verify 9 the amount paid to each person or contractor. The names, addresses, 9 and socia security numbers of persons paid. 9 - The description and computation of the cost of the inventory items 9 withdrawn for persona use. Incude gifts to famiy and friends, and 9 items for persona consumption. 9 a COST OF LIVESTOCK OR OTHER ITEMS BOUGHT FOR RESALE (Schedue F) a Acceptabe documentation incudes: a a - Copies of the physica inventory sheets for both the beginning and a ending inventory for the year. a - Copies of the receipts, canceed checks and purchase journas or a summaries for goods purchased for resae. a - The description and computation of the cost of inventory items a withdrawn for persona use. Incude gifts to famiy and friends, and a items for persona consumption. a b DEPRECIATION/SECTION 179 (Schedue C or F) b Acceptabe documentation incudes: b b - Copies of the purchase invoices, settement sheets, receipts, and b any other evidence to verify ownership of the assets. b - A computation of how you determined the depreciabe basis of the b assets. Provide a detaied depreciation schedue for a assets.

11 b - Copies of records and og books showing the tota business and b persona use of the depreciabe assets. b - For rea property, verification of your ownership of the property, b the date acquired, the cost of the property, the and aocation, b and the cost of improvements or additions to the property. b c DEPRECIATION OF RENTAL PROPERTY (Schedue E) c Acceptabe documentation incudes: c c - Evidence to verify your ownership of the property, the date c acquired, the cost, and the computation of basis, if different from c cost. Aso, submit a cacuation showing aocation of basis to and c and to buidings, and another to show the cost of improvements and c additions to the property. c - A schedue of depreciation computed for the current and prior year. c d GROSS RECEIPTS (Schedue C or F) d Acceptabe documentation incudes: d d - A brief history of your business operations. d - Copies of a books, journas, edgers and workpapers used to d determine gross receipts. d - Copies of a bank statements and deposit sips, both business and d persona, savings and checking, for the 14 month period from d December through January of the year in question. d - Records of a savings and invested funds, for the year. This woud d incude such investment vehices as money market accounts, d certificates of deposit, and other items. d - Copies of records and documentation of a other business and d persona receipts. These might be oans, insurance proceeds, d inheritances, saaries, empoyer reimbursements, gifts, socia d security benefits, and transfers between bank accounts. d - Copies of purchase invoices or cosing statements for acquisitions d and dispositions of business and persona capita items. This d incudes rea estate, automobies, and machinery and equipment. d e MACHINE AND LABOR HIRE (Schedue C or F) e Acceptabe documentation incudes: e e - Copies of a Forms 1099 for machine expenses paid. e - If Forms 1099 were not issued to persons who were paid for machine e work, ist the names, addresses, and socia security number of those e persons. e - Copies of canceed checks, invoices, and other records to verify e amount paid. e f OFFICE IN THE HOME (Schedue C Expenses) f Acceptabe documentation incudes: f f - Copies of statements from third parties, if appicabe, showing you f were required to provide an office in your home or esewhere. f - Copies of canceed checks or receipts verifying expenses incurred f such as interest, taxes, insurance, and utiities. f - Copies of records to support the cost basis for depreciation. f - Verification of the square footage of the home and the tota square f footage in the area used for business. f

12 g PENSION OR PROFIT SHARING PLANS g Acceptabe documentation incudes: g g - Copies of canceed checks and other documents verifying the g estabishment of the pan and contributions to the pan for the g year. g h RENTAL INCOME (Schedue E) h Acceptabe documentation incudes: h h - Evidence to verify your ownership of the property. h - Copies of receipts, ease agreements and other records showing the h tota amount of rent you received. h - A statement from a rea estate agent showing the fair renta vaue h for simiar properties in the same geographic area. If any of the h units were occupied rent-free or beow fair renta vaue during the h year, provide an expanation. h - Te us the tota number of days the unit was rented, and the h number of days you used the unit for persona purposes. h - If the property was converted from a persona residence to renta h property, give the date of the conversion. h i SALARIES AND WAGES PAID (Schedue C) i Acceptabe documentation incudes: i i - Copies of the empoyment tax returns (Forms 940, 941 or 943) to i support your deduction for saaries and wages paid to empoyees. i - Copies of Forms W-2, W-4, and 1099 for a empoyees. i - Copies of payment records, incuding canceed checks, for i saaries and wages paid. i j SALE OF REAL AND PERSONAL PROPERTY (Schedue D) j Acceptabe documentation incudes: j j - A copy of the bi of sae or cosing/settement statement for the j purchase of the property. j - Copies of the verification of the capita improvements made to the j property, such as receipts, bis and/or contracts. j - A copy of the cosing statement and the records showing the terms j and expenses of the sae. j - If the property was repossessed or forecosed, a copy of the income j tax return for the year of the origina sae. Aso, copies of a j contracts or ega documents invoved, and verification of the j repossession or forecosure costs. j - Copies of documents to verify the purchase cost and saes price of j other capita assets sod. j k STOCK SALES (Schedue D) k Acceptabe documentation incudes: k k - Copies of brokerage vouchers and monthy statements estabishing the k purchase price, the saes price, and the dates of transactions. k - If you sod securities on which you had a return of capita or stock k spits, copies of your records showing distributions received during k the hoding period. For worthess securities, provide verification k of the dissoution or iquidation and the amount of the iquidating distribution. k

13 k STUDENT LOAN INTEREST (1040 page 1) Acceptabe documentation incudes: - Copies of the student oan contract (origina and refinanced), interest paid statements and canceed checks or receipts to verify payments. - Copies of transcripts for a years that you incurred student oans. - Copies of receipts for a education costs, such as tuition, fees, room and board, books, and equipment. - Statements for a nontaxabe sources of income from: A empoyer-provided educationa assistance programs Withdrawas from any educationa Individua Retirement Account U.S. savings bond interest that is nontaxabe because you paid quaified higher education expenses Quaified schoarships Veterans educationa assistance benefits Any other nontaxabe payments received for educationa expenses - Copies of a tax returns for years that you incurred student oans. m MEDICAL SAVINGS ACCOUNT (1040 page 1) m Acceptabe documentation incudes: m m - Copies of statements from a empoyers showing the tota number of m empoyees and tota contributions made to your medica savings m account (if a joint return, both spouses). m - A copy of a heath insurance pans. m - Copies of canceed checks or other verifications of contributions. m n SALE OF PERSONAL RESIDENCE (Schedue D) n Acceptabe documentation incudes: n n - Copies of cosing statements for the sae of the residence and for n the cost of the residence when it was purchased. n - Copies of canceed checks and receipts for improvements made to the n residence that was sod. n - A copy of documentation for any casuaty oss deduction previousy n caimed. n - A copy of documentation for any other saes of persona residence(s) n within the previous 2 years. n - If the residence was converted to renta or business use, give the n date of the conversion and the date it reverted to persona use. n - A copy of your income tax return for the ast year the home was used n for business before the sae. n - Copies of a Forms 2119 from prior years to verify the adjusted n basis of the residence sod. n o [ ] o p [ ] p q TIPS q If you have information about your tip income that is different from q the information we received from your empoyers, pease submit one or q more of the foowing: q q - Tip Diary

14 q - A statement/etter from your empoyer stating that the tips didn't q reate to empoyment, or that you are not a directy tipped q empoyee, depending on your present situation q r SELF-EMPLOYMENT TAX r If you beieve you are exempt from this tax, pease submit the r foowing information: r r - A copy of your Form 4361, or r - A copy of your Form 4029 r r If the amount on ine 21 of your Form 1040 income tax return is not r from sef-empoyment, pease submit a statement expaining the type of r income you received, and a copy of the Form 1099, or some other record r you have from the payer that expains the income. r s FIRST-TIME HOMEBUYER CREDIT s In order to verify the property is your residence, the isted items s beow are acceptabe documentation (at east two items are required): s s - A copy of your current driver's icense or other state-issued ID s showing your home address. s - A copy of a recent pay statement (within the ast two months) s showing your name and home address. s - A copy of a recent bank statement (within the ast two months) s showing your name and home address. s - A copy of a current automobie registration showing your name and s home address. s - Confirmation of a change of address from the U.S. Post Office s showing your former and new address. s - A contract from a moving company for your receipt of transported s househod items, showing points of origination and destination. s s To verify the detais of the home purchase, you must provide ALL of s the foowing documents: s s 1. A copy of the fina cosing contract, settement or Form HUD-1 s statement showing the property address, the seer(s) and s buyers(s) names, and the purchase price; and, s 2. A copy of your most recent monthy mortgage statement. If your s purchase was financed through a private mortgage and monthy s statements are not avaiabe, provide a copy of a canceed check s (front and back) from a payment made within the ast three s months. If your purchase was a cash sae, provide proof you paid s for the property such as a copy of your canceed check(s) (front s and back) or other method of payment; and, s 3. If the home you purchased was newy-constructed, a copy of the s occupancy permit. s t Specia Rue for Long-Time Resident Credit t In order to verify that you are eigibe for the Long-Time Resident t Credit, pease provide the items isted beow: t t To verify the property is your new residence, provide a copy of at t east two of the items isted beow: t t - A copy of your current driver's icense or other state-issued ID

15 t showing your name and home address. t - A copy of a recent pay statement (within the ast two months) t showing your name and home address. t - A copy of a recent bank statement (within the ast two months) t showing your name and home address. t - A copy of a current automobie registration showing your name and t home address. t - Confirmation of a change of address from the U.S. Post Office t showing your former and new address. t - A contract from a moving company for your receipt of transported t househod items, showing points of origination and destination. t t To verify the detais of the home purchase you must provide ALL of t the foowing documents: t t 1. A copy of the fina cosing contract, settement or Form HUD-1 t statement showing the property address, the seer(s) and t buyer(s) names, and the purchase price; and, t 2. A copy of your most recent monthy mortgage statement. If your t purchase was financed through a private mortgage and monthy t statements are not avaiabe, provide a copy of a canceed check t (front and back) from a payment made within the ast three t months. If your purchase was a cash sae, provide proof you paid t for the property such as a copy of your canceed check(s) (front t and back) or other method of payment; and, t 3. If the home you purchased was newy-constructed, a copy of the t occupancy permit is aso required. t t To verify that you ived in the prior residence for 5 consecutive t years during the 8 years prior to the date you purchased your new t primary residence, pease provide at east 2 of the foowing: t t - A copy of the fina cosing contract showing the buyer(s) names, t date of purchase, and property address of your prior residence. t - Copies of tax statements and canceed checks showing rea estate t tax payments for the property for at east 5 consecutive years; the t information shoud show the address of the property. t - Copies of annua mortgage interest statements for 5 consecutive t years. t - Any other information which shows your ownership of the prior t residence, and that you used it as a principa residence for 5 t consecutive years. This may incude copies of homeowner insurance t poicies, statements from utiity companies, or schoo records t which show your name(s) and address. t The supporting documents for each disputed adjustment must be compete enough for the examiner to make a fair and accurate determination. Aso, the examiner must not have considered the information previousy. Submit ony photocopies of a documents used for verification. DO NOT SEND ORIGINALS. When possibe, attach a copy of the Form 4549, Income Tax Examination Changes, you received during the audit. When we receive your supporting documentation for audit reconsideration, we may temporariy stop the coection activity on

16 the account. However, if you are currenty in an instament agreement, you must continue to make payments. Submit your supporting documentation within 30 days. If the documentation does not support your position, we wi resume coection and notify you accordingy. Pease submit your documentation, aong with this etter, to the Audit Reconsideration Unit at the foowing service center address: [ ] u You can aso fax your documents with page one of this etter to u [ ] (not to-free). Pease ist your taxpayer u identification number and the tax period on each page. u If you have questions, you can ca us at [ ] between the hours of [ ] and [ ]. Print your teephone number and the best time for us to ca you if we need more information in the spaces beow. Keep a copy of this etter and copies of any information you send us for your records. Home Teephone Number: ( ) Best Time to ca: Work Teephone Number: ( ) Best Time to ca: Thank you for your cooperation. Encosure(s): v Form Pubication 3598 w [ ] Sincerey yours, Letter 3338C (Rev )