In a case that's dragged on for over 3 yrs now, here are the facts:
Taxpayer filed erroneous returns for 2007 and 2008, with another preparer, inflating their income in order to qualify for child tax credits (while living abroad). Total income reported was about $25000-. After getting those refunds, an audit was commenced.
After I succeeding in proving that taxpayer was entitled to dependency exemptions on their two young children (!), appeals is now stating that the amended returns I filed, to show the correct (much lower) income, cannot be approved, that taxpayer signed false (original) returns, and that the original return's figures will "stand". (??) Also, since taxpayer cannot prove most of this income, it is considered unearned income, so that even the eic is in question.
If you can provide any helpful advice, please reply by Thursday or Friday (11/22). Thank you in advance.
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Martin Cohen
MARTIN H. COHEN, CPA
West Hempstead NY
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