The Audit Saga Continues…

I have found myself having to use words that no American ever wants to have to pass over their lips, “I am being audited by the IRS”. It is hard for me to imagine myself in this position for the second time, especially because I’m one of those conservative, honest types. You know, the kind that wishes they could color outside of the lines, but their conforming nature would never allow such abandon. Yeah. Sad but true. I don’t color outside of the lines, and I don’t lie on my taxes.

Anyway, the first time I was audited was several years ago, and I must say it was not that unpleasant or difficult. They sent me a letter, I sent them a copy of my records to prove the deduction I’d taken was legitimate, and they sent me a nice letter saying they’d accepted the documents and that my taxes were deemed accurate.

This time the IRS is again questioning a deduction. Now that I found my records for 2006 (see my blog, ”The Audit”), it would seem an easy thing to send proof of the deduction in the nice-but-too-small envelope they provided. Oh, if it could only be so simple. The thing that would prove my deduction beyond a doubt requires a government agency to provide a letter stating that they paid money, on our behalf, to a particular individual. Due to the privacy laws, the government can only supply a letter stating the bank and account number they sent the funds to. Yeah. The government is auditing me on something I cannot get proof of because of the government’s privacy law. Yes, I know they are different agencies, factions… whatever…, but I still find it ironic.

Okay, so I called the IRS to solve this by asking a simple question: Can’t they just look at the other person’s tax return and see that they claimed the money as income? Uh…aren’t they the IRS and have access? You know, look at my tax return and see the deduction, look at the other person’s return and see the income….and viola! Proof positive. The guy at the IRS said, “Well, of course we will do that as part of our investigation.” So answer me this. Why not do that and avoid having to send an audit letter in the first place????