How to Write a Letter to the IRS

Charley Long is a truck driver, the 18-wheeler variety. He is a member of a limited liability company, Fishy Co., a seafood company in Mobile, Alabama. Charley’s job entails delivering fresh fish to restaurants and wholesale fish distributors in Mississippi and Louisiana. Charley’s routine varied. Sometimes, he drives straight back to Mobile from Lafayette. On other occasions, he parks at a truck stop and sleeps in his cab, which is equipped with small, sparse sleeping accommodations, or spends the night in a motel along the road before returning to Mobile. When Charley drives straight back to Mobile, Charley will eat one meal. When he sleeps overnight, he will eat two meals, a late dinner, and breakfast. During the current year, Charley incurred the following expenses: Meals incurred on nonstop trips = $1,000 Meals incurred when slept in-cab = $800 Meals incurred when slept in motel = $600 Lodging = $2,800 Total = $5,200 You are encouraged to use tax resources to help you determine which items are deductible. You are welcome to use these as support in your letter, as appropriate. ISSUE: The IRS has disallowed all of the above expenses on the grounds that they are not bona fide travel expenses but personal expenses, meaning that Charlie owes taxes on the entire $5,200. Assume Charlie appropriately prepared a Form Schedule C with his personal tax return and included these expenses as part of his business. Prepare a response to the IRS of at least 400 words that indicates the amount of expenses deductible and the amount of taxes owed, assuming Charlie is in the highest tax bracket. The letter should include the following: Explanation of the taxpayer’s business and expenses Explanation of the IRS disallowance of the expenses Tax laws to support the deductions, where applicable Conclusion as to the number of deductions allowed, where applicable The IRS office from which the letter originated is Treasury Department, 324 25th St., Ogden, UT 84401. Charlie’s address is 3300 W. Indian School Road, Apt. 230, Chandler, AZ 85048. The response should be formatted like a professional business letter. While APA style is not required for the body of this assignment, solid academic writing is expected, and documentation of sources should be presented using APA formatting guidelines. A partial list of sources is: Sec. 162(a)(2) and Reg. Sec. 1.162-2(a) U.S. v. Correll, 389 U.S. 299 (1967) Williams v. Patterson, 286 F.2d 333 (5th Cir. 1961) Rev. Rul 75-168, 1975-1 C.B. 58 and Rev. Rul. 75-432, 1975-2 C.B. 60 For ideas on how to write a letter to the IRS, you can search online and refer to the Topic Material “How to Write a Letter to the IRS”