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Have you been audited?

M

MarionC

Ideal_Rock
Premium
Joined
Dec 9, 2013
Messages
6,244
I'm going through one now, as the victim of a random audit.

My 2 complaints, aside from the enormous hassle...

1.] they can ask anything they want. How about your Grandparent's birth certificates, marriage licenses and death certificates...got those handy? How about the names of your long deceased stepfather's first set of kids' grandchildren's' names?

2.] the legal help needed to wade through it is expensive.

Truly, I did not fully understand how invasive our system can be. It's horrifying to see even this little tip of the iceberg.
This is just a passing storm to me [I dearly hope]. It makes me feel so terrible for those people really caught up in the system.

Speaking of tips of icebergs, I wish I could buy some new earrings to distract myself, but my lawyer's wearing them instead.
 
Were you associated with any Tea Party or other Conservative organization? Might explain their overdone curiosity. They asked TP groups looking for 501(c3) status even what they dreamed about. What books they are reading. What they pray for. The questions you list are absolutely ridiculous & have zero to do with whether you paid your taxes. It's simple harrassment & should not be allowed -- I don't think it's legal, but this gov't gets away with it. Watch out for the precedent it sets!

My dad got audited for his business. Two years in a row. They asked him all kinds of nutty questions. When it came to the Christmas party he gave at our house 3 years earlier for his employees, they wanted to know who was there & how many drinks of what each person had. At that point Dad threw the guy out of his office. Nothing more ever came of it, but I doubt anyone can do that now.

--- Laurie
 
Laurie,

yes, so you get what I'm talking about. Thank you for writing - It makes me feel better.
The audit was triggered by the sale of the family business. Everything was done to the letter, thank goodness, but as you pointed out, they can still make things uncomfortable.

Your Dad is my new hero =)
 
No. I've seen other people go through it...

We pay a very good tax person to do our taxes. He worked for the IRS for 20+ years. If an audit came up, he'd take care of it.... For a mere $250/hour.

We have had a couple of issues thanks to DH's ex. It is impressive how miserable (and expensive) even the tiniest thing can be.

Oh... And only in the special IRS math can you have a $20,000 bill that you pay in full only to be told that you still owe $20,000


Good luck! I hope it goes as smoothly as possible.
 
Thanks, TooPatient.
 
Sorry you are going through this Jimmianne! I hope it is over soon and without any more stress. (((Hugs))) for a quick and painless resolution.
 
yes and as we speak we are being audited for tax year 2009. My favorite part is where I have to justify my donations to Goodwill, Kiwanis etc. I have receipts from every place. Those generic ones they give.. 2 bags ladies clothes etc.
They want a list of exactly what items were in each and every bag. They also want to know where it was purchased originally and proof of ownership please. That is NOT ON ANY IRS document or publication anywhere.
My husband swears its because I have a big mouth on FB. :naughty:
 
Kids, I think we live closer to Russia than we used to. Depresses me more than I can express, and scares me. I'm probably next, for writing this here!

Unbelievable questions, Sparkleu -- almost as bad as Jimmianne's, though hers take a special prize. How do you suppose those IRS agents stand to look at themselves in the mirror when they go home after driving people crazy all day?

--- Laurie

P.S. My dad was my hero in many ways, Jimmianne. :wavey:
 
I'll bet there are people on PS who are going through this and are too paranoid to post.
I sort of feel that way, but I had to post to get rid of the stress of dealing with it alone.
Talking to others about it helps =)

I really do think the "what's in the bags" is the winner :lol:
* * * * *

Thanks, Missy!
 
Yep, not by the IRS but by the State; we pay State income tax also. They audited me and determined I owed them $200 and it happened again a second time but I can't remember if they found anything wrong, if so, it was minimal. I suspected it was because I submitted a lot of tax-credit energy saver forms (Solar panels, ground-loop heat pump, washing machine.)
 
Nope--sounds like a total nightmare. Sending you lots of dust to get through it easily!
 
Hi,

Yes, I have been audited twice. I owned three properties and with the depreciation that you can claim plus capital expenditures my tax bill was nil. On my way to the tax man for my audit, I met a lawyer friend who said, "just look confused". I do all my own taxes, and brought all the paperwork i had. It took several hours, but the questions only pertained to the my taxes. Since I don't cheat, I was just a little nervous. I ended owing them $0. He even complimented me.

The first time I was audited was just after a divorce. I took the exemption for the mortgage, even though the house was in both our names. He wanted to know where I was getting the income to pay, since I wasn't working. I told him, my son was ill and I couldn't work, but my father helped me with money. He accepted that and so that audit was fine as well. He was really nice.

Annette
 
Smitcompton,

I'm glad to hear good things. I think you must have a charmed life. =)

I think if I didn't have lawyers it might be easier! I could easily act confused - :confused: :lol:
It's my natural state.
Today's request from them is that I must document the cause of my Mother's death - which is not listed on her death certificate.[She was 90].
Weird, or what?!?! I mean, what COULD that possibly have to do with anything. [[[[[sigh]]]]]
 
YIKES, Sparklelu, I don't know who prepares your tax returns, but s/he should have alerted you to the fact that generic receipts are worthless so far as the IRS is concerned because you can only claim deductions for the fair market value of the items -- and if you're claiming a total charitable deduction for all non-cash gifts of more than $500 , you need to file a separate Form 8283.

The IRS doesn't keep any of this a secret: the basics re valuation are in the instruction booklet for the Form 1090's Schedule A; more detailed info is in their print-online publications; and they periodically issue PSA's about this that are picked up by media. E.g.,
http://www.irs.gov/uac/Publication-526,-Charitable-Contributions-1
http://www.irs.gov/uac/Form-8283,-Noncash-Charitable-Contributions
http://www.nj.com/south/index.ssf/2012/12/internal_revenue_service_outli.html

Since TurboTax et al flag attention to this, seems as if you'd be better off using one of those programs instead of whomever you've been using for tax return preparation. And you could also suggest to your local GoodWill and Salvation Army they include a notice on the virtually "blank" receipts they issue. The Salvation Army branch I donate stuff to has a notice printed on their receipts, with a link to their online valuation guide, as does our local GoodWill; GoodWill also steers you to an app for tracking and the valuation of such noncash charitable contributions:
http://satruck.org/donation-value-guide
http://www.goodwill.org/wp-content/uploads/2010/12/Donation_Valuation_Guide.pdf
http://charitydeductions.com/cm/goo...ite&utm_medium=txtLink&utm_campaign=gwWebsite

Odd as it might seem, the Taxpayer Advocate's Office really is independent of the IRS & can be really useful; I'm not sure if they will step up to the plate for someone who's already in the midst of an audit, but there's no downside to contacting them:
http://www.irs.gov/Advocate/Local-Taxpayer-Advocate

Good luck!
 
Jimmianne|1403199148|3696625 said:
Today's request from them is that I must document the cause of my Mother's death - which is not listed on her death certificate.[She was 90].
Weird, or what?!?! I mean, what COULD that possibly have to do with anything. [[[[[sigh]]]]]
Click to expand...
The inquiry may have nothing to do with your own tax status, Jimmianne. They may seeking to ascertain whether her estate owes taxes -- or it may be related to an investigation into healthcare fraud or identity theft by persons of which you would be unaware.

I'm guessing, Laurie, that your dad wrote off the costs of hosting the Xmas party for his employees as a business expense. If the figure was higher than what is customary for such an at-home event, that would trigger questions about how many people were there, etc. The self-employed have always been more likely to get audited because hiding income, inflating business deductions is easier for those persons (not saying your dad ever did this!) than for those of us who receive an employee's paycheck.

When it comes to things like tax evasion & insurance fraud, people can get very "creative". Like this doctor who bilked taxpayer coffers out of $19 million & claimed his wife as an employee to the tune of more than $1.2 million:
http://washingtonexaminer.com/new-j...ening-treatments-in-19m-fraud/article/2539613
He's not an isolated example:
http://www.irs.gov/uac/Examples-of-Healthcare-Fraud-Investigations-Fiscal-Year-2014
 
MollyMalone|1403246770|3697110 said:
Jimmianne|1403199148|3696625 said:
Today's request from them is that I must document the cause of my Mother's death - which is not listed on her death certificate.[She was 90].
Weird, or what?!?! I mean, what COULD that possibly have to do with anything. [[[[[sigh]]]]]
Click to expand...
The inquiry may have nothing to do with your own tax status, Jimmianne. They may seeking to ascertain whether her estate owes taxes -- or it may be related to an investigation into healthcare fraud or identity theft by persons of which you would be unaware.

I'm guessing, Laurie, that your dad wrote off the costs of hosting the Xmas party for his employees as a business expense. If the figure was higher than what is customary for such an at-home event, that would trigger questions about how many people were there, etc. The self-employed have always been more likely to get audited because hiding income, inflating business deductions is easier for those persons (not saying your dad ever did this!) than for those of us who receive an employee's paycheck.

When it comes to things like tax evasion & insurance fraud, people can get very "creative". Like this doctor who bilked taxpayer coffers out of $19 million & claimed his wife as an employee to the tune of more than $1.2 million:
http://washingtonexaminer.com/new-j...ening-treatments-in-19m-fraud/article/2539613
He's not an isolated example:
http://www.irs.gov/uac/Examples-of-Healthcare-Fraud-Investigations-Fiscal-Year-2014
Click to expand...

Thanks for the explanation. The thing that bothers me most aside from the invasiveness, is that 7 weeks of lawyers' fees for this audit has been 23k and we aren't done yet.
 
Oh geeze, Jimmianne, that's crazy! I hope the lawyer is helping enough to be worth it.

Jimmianne said:
MollyMalone|1403246770|3697110 wrote:

Jimmianne|1403199148|3696625 wrote:Today's request from them is that I must document the cause of my Mother's death - which is not listed on her death certificate.[She was 90].
Weird, or what?!?! I mean, what COULD that possibly have to do with anything. [[[[[sigh]]]]]

The inquiry may have nothing to do with your own tax status, Jimmianne. They may seeking to ascertain whether her estate owes taxes -- or it may be related to an investigation into healthcare fraud or identity theft by persons of which you would be unaware.
Click to expand...

MM, that kind of investigation is not in the IRS's purview on a tax audit. Cause of death, or as Jimmianne wrote: "How about your Grandparent's birth certificates, marriage licenses and death certificates...got those handy? How about the names of your long deceased stepfather's first set of kids' grandchildren's' names?" have NO relation to whether her taxes have been paid correctly. If they have doubts about the estate, they must audit that, itself. It's simply harrassment. Possibly with the goal of making the audit so draining financially & economically that the taxpayer won't fight a penalty if the IRS decides to levy one. The IRS under this administration has been used as a hammer against citizens who disagree aloud with said administration & this has the same ring exactly.

Yes, I understand why they asked my father the questions they did -- it's standard bean-counter stuff. However, he had had enough when they wanted specifics from 3 years earlier that nobody -- even the agent himself in a similar situation -- would have. If someone were going to overspend on a party, believe me, it would not be one in the home, without claiming caterers, car-parkers, etc. There are so many genuinely suspicious tax returns that wasting a businessman's time and the IRS's time on small potatoes like that is plain dumb -- typical bureaucracy. He came through both audits without problem, even after having tossed out the agent. It's one reason he was my hero -- so honest & ethical he practically squeaked with cleanness, lol.

--- Laurie
 
two words: flat tax
The IRS can go away forever.


I'm so sorry you have to deal with this.
 
moneymeister said:
two words: flat tax
The IRS can go away forever.
Click to expand...

Yessssss!!!!!
 
MollyMalone said:
YIKES, Sparklelu, I don't know who prepares your tax returns, but s/he should have alerted you to the fact that generic receipts are worthless so far as the IRS is concerned because you can only claim deductions for the fair market value of the items -- and if you're claiming a total charitable deduction for all non-cash gifts of more than $500 , you need to file a separate Form 8283.

The IRS doesn't keep any of this a secret: the basics re valuation are in the instruction booklet for the Form 1090's Schedule A; more detailed info is in their print-online publications; and they periodically issue PSA's about this that are picked up by media. E.g.,
http://www.irs.gov/uac/Publication-526,-Charitable-Contributions-1
http://www.irs.gov/uac/Form-8283,-Noncash-Charitable-Contributions
http://www.nj.com/south/index.ssf/2012/12/internal_revenue_service_outli.html

Since TurboTax et al flag attention to this, seems as if you'd be better off using one of those programs instead of whomever you've been using for tax return preparation. And you could also suggest to your local GoodWill and Salvation Army they include a notice on the virtually "blank" receipts they issue. The Salvation Army branch I donate stuff to has a notice printed on their receipts, with a link to their online valuation guide, as does our local GoodWill; GoodWill also steers you to an app for tracking and the valuation of such noncash charitable contributions:
http://satruck.org/donation-value-guide
http://www.goodwill.org/wp-content/uploads/2010/12/Donation_Valuation_Guide.pdf
http://charitydeductions.com/cm/goo...ite&utm_medium=txtLink&utm_campaign=gwWebsite

Odd as it might seem, the Taxpayer Advocate's Office really is independent of the IRS & can be really useful; I'm not sure if they will step up to the plate for someone who's already in the midst of an audit, but there's no downside to contacting them:
http://www.irs.gov/Advocate/Local-Taxpayer-Advocate

Good luck!
Click to expand...

We are working with the TAO and they have been great. I did my taxes with the help of turbo tax and yes I used fair market value and used the program that goes with it it's deductible or what ever it's called. I actually have separate lists I create for each bag. And no bag has a resale value of more than $250.
I even had photos of some of the larger items( dresser and headboard) taken at the friggin goodwill place!
They did not understand how someone could own so much still to give away. I had to literally show here is the purchase at Macys in 2008 now there it is in 2009 going to Kiwanis.
Apparently the IRS does not like garbage pickers who claim stuff as their own and they are cracking down on what to them seem excessive generosity!

Because the IRS IS OUR COUNTRIES MORAL COMPASS
 
moneymeister said:
two words: flat tax
The IRS can go away forever.


I'm so sorry you have to deal with this.
Click to expand...

I agree
 
I was audited by the state. My tax preparer told me that they were auditing everyone in the state who had rental property, declared a yearly loss and still claimed a refund. I had to submit a couple of hundred pages of documentation of very small charitable deductions and expenses for repairs, and it was indeed onerous, though not $23,000 worth of lawyer fees! At the end of all that, they waited six months -- and sent me a $38 refund!

We do have an incredibly complicated tax system that needs reform, and it has been repeatedly found that a small taxpayer is more likely to be audited than a truly rich person -- or corporation. My sister was an IRS agent and used to try to disentangle the affairs of little old ladies with shoeboxes full of receipts, which she was not supposed to do. But she couldn't stand suffering. Unfortunately, it is easier to squeeze blood from that sort of turnip than to get it from the truly powerful -- who probably have their profits hidden in an offshore account anyway.
 
I have not visited this thread in a long time. Yesterday I got the lawyer bill for last month - $17,000. I simply can't think about it - there is nothing I can do but close my eyes, shut off my mind and write the check. They bill 1/4 hour every time they open a letter or check an email...and the billing for one day was over $3000 for the senior partner to review the files. All legal and above board.
As I said - I just pretend it's not happening and pray it's done soon. :boohoo: Pay while you pray :lol:

edit: oh yes...and spending lots of time on SMTB!
 
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