Has anyone received a 2022 CP14 notice from the IRS ? It changed my client's tax calculation without any explanation whatsoever. I called the IRS tax practitioner hotline and they told me it involves form 8960(Net Investment Income Tax). They took my client's LOSS on Schedule C and made it into a profit on line 8 subject to the 3.8% net investment income tax ! First of all, it is NOT passive income, it's a business loss where my client materially participated. Second of all, how can the IRS change a LOSS into a Profit ? I have been practicing for 40 years and this is the craziest thing I've ever seen! Any feedback would be greatly appreciated !
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Norman Jacobs
CPA
JACOBS & COMPANY, CPAs PC
Merrick NY
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