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Engagement Work Plan · v5 · 06/11/2026 · IRS: Form 8821 · SSN ***-**-9568

David L. Crenshaw — IRS & CA FTB Resolution

TY2020 · TY2021 amendments · TY2025 filing · Collections & penalty resolution · Registered Tax Preparer · CTEC · ERO · IRS Authorized e-File Provider
⚡ DEADLINE — CA FTB: $21,680.25 due 06/13/2026 (FTB 4963C, TY2021, penalty code AD). Practitioner hotline call with client conferenced must occur no later than Fri 06/12. Combined agency exposure: $110,052.99. IRS: LT16 issued 09/09/2025 (ref 9835938153) — levy jeopardy; prior installment agreement DEFAULTED. Q2 2026 estimated payment due 06/16/2026.
PHASE 1
Authorization & Urgent Agency Contact
This week · IRS 8821 + FTB 3520-PIT · FTB deadline defense
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Client signing session — both authorizations in one sittingURGENT
IRS Form 8821 (Tax Information Authorization) + FTB 3520-PIT (full POA). 8821 packet prepared 06/11 — supersedes the 2848 packet. SSN entered at session only.
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Submit FTB 3520-PIT via MyFTB — same day as signingURGENT
WET SIGNATURE only (FTB rejects e-sign). Part III: Q1 All-Years = YES, Q2 = NO with "NA" — covers 2020 automatically.
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FTB Tax Practitioner Hotline call — client conferencedBY 06/12
916-845-7057 · Acct 121-28574-74. Request: same-day verbal access, hold on 06/13 balance pending 540X/1040-X, AD penalty detail, installment agreement terms as fallback.
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Client approves mailed MyFTB authorization code
Part V full-access code arrives by MAIL, one per tax professional — David approves same day. Representation by phone/writing works on POA approval regardless; the code only unlocks full online access.
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Submit IRS 8821 — online or fax Ogden CAF
"Submit Forms 2848 and 8821 Online" / fax 855-214-7522. Line 3 covers 1040/1040-X 2020–2026, Civil Penalty, collection/lien information. Copies-of-notices box CHECKED. Must reach IRS within 120 days of signature.
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Pull IRS transcripts 2020–2025 via e-Services TDS
Account + wage & income all six years, PLUS Record of Account TY2020–2021 — required to reconcile the $45,023 TY2021 assessment against the filed net profit of $10,117 (a later assessment is on the account). Also starts closing the 2022–2024 gap.
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Confirm federal lien status & collection posture
LT16 issued 09/09/2025 (ref 9835938153) — levy jeopardy. Request enforcement hold via client-conferenced ACS call (800-829-1040 / Stop 813G). CSED dates + prior DEFAULTED installment agreement history from account transcripts.
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Revoke prior preparer — both agenciesBEFORE SIGNING SESSION
RESOLVED 06/11: prior preparer — client terminating. Execute revocations per Revocation & Call Scripts Packet: IRS revocation statement → fax 855-214-7522; FTB revoke via MyFTB or 3520-RVK; records request sent to prior preparer.
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Establish IRS call protocol — client conferenced
8821 is information-only: holds, installment agreements, and abatement discussions happen with David on the line. Escalation trigger: if formal representation becomes necessary, EA/CPA executes a fresh Form 2848.
Phase complete
PHASE 2
Client Information Request — Intake & Substantiation Interview
New 06/11 · Feeds Schedule C rebuild for TY2020 / TY2021 amendments
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Verify phone numberCONTACT
On file: (323) 794-5148 — confirm current and best daytime contact (needed for 2848 Line 1).
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Obtain email addressCONTACT
Required for 3520-PIT, MyFTB approval prompt, and engagement correspondence.
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Confirm occupation as stated for 2020 / 2021
CONFLICT TO RESOLVE: filed return uses NAICS 561730 (landscaping) but bank pattern is auto broker/dealer (441120). Pin down actual 2020–21 activity — drives Schedule C line A/B and the entire expense narrative.
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Medical insurance — marketplace coverage?AMENDMENT IMPACT
If Covered CA / marketplace: obtain 1095-A for 2020 AND 2021 — Form 8962 PTC reconciliation must ride on each 1040-X. If self-employed and premiums paid: SE health insurance deduction. Missing 1095-A is a common amendment rejection point.
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Business vehicle — Ford F-150?LARGEST DEDUCTION
CONFLICT: bank feed shows BMW Financial ~$7,060/yr + Loan 61 — no F-150 in 2020–21. Confirm which vehicle, purchase date, cost, financed/leased, business %. Gather: gas, oil changes, tires, car note or lease payments, insurance, loan interest, washes, repairs, registration. Decision point: standard mileage vs actual expenses — need a mileage reconstruction (calendar + deal records) either way. If F-150 >6,000 lbs GVWR and >50% business use in year placed in service: §179/bonus depreciation angle on the actual-expense path.
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Taxes & licenses
Dealer/broker license, DMV/business license fees, city business tax, sales-tax amounts paid on behalf of deals (ties into pass-through analysis).
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Home office
Exclusive-use space? Square footage / total home sq ft · rent or mortgage · utilities · renters/homeowners insurance. Simplified method ($5/sq ft, max 300) vs actual — note 2020–2021 residence differs from 2025 Victorville home.
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Storage
Storage unit rent 2020/2021 — monthly amount, facility name, business purpose (vehicle parts, records, inventory?). Check bank detail tab for recurring facility debits.
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Supplies
Office supplies, detailing/cleaning supplies, small tools — receipts or bank-evidenced merchants.
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Travel
Hotels, airfare, Uber/Lyft, rental cars — business purpose per trip (auctions, out-of-area vehicle pickups?). Overnight + away-from-tax-home standard; meals at 50%.
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Communication devices
Cell phone, laptop, iPad — purchase dates, cost, monthly service, business-use %. Devices may be §179/de minimis expensed in year of purchase.
Phase complete
PHASE 3
Income Reconstruction — Open Items
Bank deposit method · pass-through resolution · missing years
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Obtain Aug 2020 + Jun 2021 statementsAUDIT FINDING
Both "complete" years are 11 of 12 months — these two were never extracted. Request with the 2022–2024 batch. Hold 1040-X filing until reconciled.
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Per-deal records — pass-through vs gross receipts
Same-day deposit/withdrawal pairs & Aug 2021 wire round-trips ($7,800/$8,000 · $2,500/$3,000). Confirmed so far: 2020 Oct SQC $4,924, 2021 Aug wire ~$10,500.
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2022–2024 bank statements — 36 missing months
Request from USC Credit Union (#1597600); cross-check against IRS wage & income transcripts from Phase 1.
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2025 withdrawal/debit detail extraction
Deposits done line-by-line; debit side not yet captured.
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2025 ATM cash & round-dollar deposit sourcing
$27,293 unsourced — drives the high/low scenario spread.
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2025 Zelle sender classification
Family vs business clients, sender by sender.
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TVG win/loss statements + full gambling documentation
TVG, casino, crypto platforms — session records for 2025.
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W-2 from Fiber Optic Solutions (2025)
December payroll appears in bank detail at $4,276.66 net deposits.
Phase complete
PHASE 4
TY2020 & TY2021 Amendments
1040-X × 2 · CA 540X · AD penalty challenge
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Rebuild Schedule C — TY2020
Bank-evidenced gross receipts net of confirmed pass-throughs + Phase 2 expense substantiation.
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Rebuild Schedule C — TY2021
Same methodology; biggest balance year ($81,856.61 IRS).
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Prepare & file 1040-X — both years
GATED on: (a) expense substantiation clearing break-even vs reconstruction, (b) Record of Account reconciliation of the TY2021 assessment basis — if the $45,023 came from an exam/CP2000, the vehicle may be audit reconsideration rather than 1040-X. Attach 8962/1095-A if marketplace coverage confirmed.
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CA conformity — Schedule X / amended 540 for TY2021
Federal amendment flows to CA; every $1,000 documented ≈ $466 combined savings.
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Challenge FTB accuracy-related penalty (code AD)
$5,738.50 — reasonable cause + reduced underpayment via amendment.
Phase complete
PHASE 5
TY2025 Return Preparation
Unfiled · mixed SE + W-2 + gambling · Victorville residence
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Schedule C — 2025 self-employment
Cash App / Zelle / PayPal / cash receipts per income analysis tab.
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W-2 wages + withholding
Fiber Optic Solutions, December start.
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Gambling income & losses
W-2Gs + session method; losses on Schedule A only to extent of winnings — itemize vs standard decision with new mortgage interest.
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Mortgage interest / property tax — new Victorville home
Form 1098 from lender.
Phase complete
PHASE 6
Resolution & Closure
Penalties · lien · installment agreements · case close
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Q2 2026 estimated paymentDUE 06/16
Form 1040-ES — prevents the pattern that defaulted the prior IA from repeating. Calculate from 2025/2026 income picture.
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IRS penalty abatement requests
FTA eligibility check + reasonable cause on $15,350.47 combined penalties (2020+2021).
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Post-amendment balance strategy — IRS
Installment agreement / lien withdrawal (Form 12277)-subordination analysis on the reduced balance. Prior IA DEFAULTED — identify root cause before structuring the new one.
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FTB closure
Post-540X balance + AD penalty outcome; IA if residual balance remains.
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Final client deliverable package
Filed returns, agency confirmations, exposure dashboard final state, records-retention guidance.
Phase complete