2010 HCTC, waiting for refund

Perhaps you should now contact a Taxpayer Advocate:

What do you mean by "HCTC"? Maybe "Health Care Tax Credit"??

Small business and tax exempt organizations have a new tax credit available in 2010-2013 if they pay health insurance premiums on behalf of their employees and meet several conditions related to number of full time employees, amounts paid, and so on, but this is not available to individual taxpayers.

As an individual, you may be able to avoid some penalties related to early withdrawals from your IRA if they were for health care, but you will still owe tax on the amounts withdrawn, and there is no credit that I'm aware of.

Perhaps if you mention the specific form(s) you filed (or line number(s) on Form 1040) and some approximate dollar amounts, you could get more assistance or clarification here.

...

Elgibility for HCTC is _much_ more restrictive than simply being unemployed, so other than the waiver of the 10% additional penalty for early withdrawal you'll have to meet those requirements.

It's my understanding that those who are eligible will already have received information about it...

Here's the info I've seen previously. Note the provisions expired 2/11 so it's not there for this next tax year even if you do/did qualify last.

To John Fisher - I don't see what he has to contact the advocate about. There has been NO adjustment made to his return so I don't see what there is to argue over. The OP didn't mention a refund, but if he's expecting one and the IRS delays it for the exam he would be entitled to interest on the refund he gets.

To the OP - just because the IRS sent you a notice saying your return was selected doesn't mean it will undergo a full audit. First the IRS computer in Martinsburg, WV scores returns and marks ones it "thinks" may be outside the norm. Then the return is sent to a human classifier who looks it over to see if its audit worthy - this process can take a year or more (though it shouldn't - the IRS is way behind). IF (and that is a big IF) the classifier thinks the return is audit worthy its packaged up and assigned to a local IRS office for another look. IF that person believes the return is audit worthy you'll get a letter telling you what they want to see from you. If that person thinks the return is OK as is, you'll get a letter saying that and your refund check will follow.

In my experience it usually takes the IRS between 12 & 18 months to actually issue the Audit Letter - telling you what they want to see and where to send it. Then its just like the Army - Hurry Up and Wait. They want whatever they request from you right away, but it will take them months to review that info and get back to you. It can take between 18 & 24 months from filing to get audited and resolve it - one way or another.

If you haven't heard from the IRS within 30 months of filing you likely won't ever hear from them about that year.

In your case I'd advise you to relax - let the IRS do its thing. In the meantime make sure you have all the documentation necessary to support what you THINK the issue is. Remember, you don't really know WHY they pulled your return - you're just guessing.

Gene E. Utterback, EA, RFC, ABA

text -

Gene, in my experience, I have gotten results (in cases similar to this one) by consulting an advocate. This after months of calling assistors who really just look at a computer screen, don't really have anything other than stock answers, and can't fathom the anxiety of clients who are expecting refunds. Some people really are in need, in spite of any interest they may be earning. In any case, it might help to get the situation resolved a little more quickly. (mnsvho)-:)

Thank you, all, for your contributions to this thread. Apologies for not being as clear as I might.

Yes, I was unemployed due to my job being sent to India. India was put on the list for Trade Adjustment recently I believe. I was receiving training aid via the TAA program. I was carrying health insurance for my family while enrolled in authorized TAA training - the duration for which I am supposed to be eligible for the Health Care Tax Credit, HCTC.

I an now employed, at 50% salary, and the refund from the IRS would forestall any addition need to withdraw from my IRA -- until my income improves. I told that to someone on the phone at IRS and they also recommended the Taxpayer Advocate since she believed my story contained financial hardship.

Sorry to hear this could take a year or more. Good to know that, as it helps me make plans for the near term.

Thanks again to all for sharing your experience and advice!