IRS Question

[cjsmith]

Anyone here ever been audited? What's your experience been like?

Fortunately, the letter I received is only asking me for one thing -- documentation for one number on my return. (Mortgage interest.) And it doesn't actually use the word 'audit' anywhere. A rumor I've heard says that once they decide they're only asking you about one thing, they won't then widen their scope again -- but that's just "a rumor I've heard", not "something I've seen in black and white in an IRS publication".

Also fortunately, I think the thing they're asking about is in fact documented. I believe I can supply the paperwork they need. (joedecker, any advice on presentation from your lovely and talented wife would be *enormously* appreciated. Maybe she'd barter for a gift certificate to a nice restaurant or something.)

Comments

[joedecker.livejournal.com]

I'll pass the question along. :)

[cjsmith.livejournal.com]

Thank you!

I am hoping the 1098 and ...something... showing me as also being on the loan will suffice.

[dr-scott.livejournal.com]

The mortgage interest info form is computer-matched -- they match the SSN on the report from the mortgage company with yours. Often the SSN on the info return is only half the story, and technically you should attach a statement to your 1040 when, say, you are taking half the deduction on a jointly-owned property with the SSN on the info return being the other part-owner's. A simple explanation and some documentation will usually suffice.

I don't think you have much to worry about. You're not being audited.

I was audited 25 years ago. I went in with a helpful attitude -- "see, I understand the technicalities of what I am doing here" -- and they accepted my interpretation. Things are very different today, and there are very few field audits (they come to you) or office audits (you go to them.)

[cjsmith.livejournal.com]

technically you should attach a statement to your 1040 when, say, you are taking half the deduction on a jointly-owned property with the SSN on the info return being the other part-owner's.

I do, every year. I think -- I hope -- they are just going to want the 1098 and maybe some loan or title document showing my name attached to the property.

You're not being audited.

Cool. I had the impression that ANY time a return was questioned it was called some level of "audit", but that may be my mistake. :-)

[dr-scott.livejournal.com]

Technically a letter requesting documentation may be called a computer audit, but it's not an audit of the kind where everything is subject to questioning and the examiner is allowed to follow his/her nose wherever it leads, which is the terror-striking kind people fear when they think audit. This kind is easily dealt with by substantiating the item in question, and nothing else will come up.

[cjsmith.livejournal.com]

Yeah, that's the sense I have. Chris (joedecker's wife, a tax accountant) said it similarly: if I get the paperwork back I'm fine, but if I can't substantiate it the auditor may do more fishing, depending basically on how busy and how annoying the auditor is feeling. (She called it a "mail audit".)

[airporter.livejournal.com]

Taken from experiences up here, where the CRA (IRS) is not as apparently all-powerful:

If it's just answering a question or providing supplemental information, you've simply been pulled from the pile for a double check - we don't foward much documentation anymore, so just about anything is fair game for 'review'. I agree that you're not being audited.

Approaching the query seriously, and providing the information in a courteous and timely manner, with your reasoning if it's a grey area, usually puts paid to these kinds of queries. As you've already got your dots and tees sorted, it should be no problem.

I've had many audits (at work, and a couple of personal) and find the key to getting what I want is simply presenting the information and being reasonable. In this manner, even when I've disagreed with an auditor, I'm usually able to get some kind of compromise or reversal.

Lots of babble, there. You've no worries.

[cjsmith.livejournal.com]

Thanks! Yes, at least I can be timely -- that has great return for the effort required. I'd be a fool not to do it. :-)

[ambar.livejournal.com]

I was audited once, over the cats -- I said it was a business, they said it was a hobby. I won, but I probably spent over $1k on lawyer and accountant advice, and there's no way to put a price on six weeks of white-hot bubbling stress.

[cjsmith.livejournal.com]

Aaaiiiiieeee. Yeah, the stress would be NO fun. Heck, just figuring out how to present my 1098 in a courteous and businesslike manner is enough for me.

[sunnydale47.livejournal.com]

I've gotten letters like that several times -- most notably when they lost two important forms and insisted I never sent them (everything had been all together in the same envelope) ... and then when I sent them an envelope with the copies they lost one of them again and I had to send it a third time!

But I've been asked to document other things from time to time and never had a problem. Just send them what they want and they'll leave you alone.

[cjsmith.livejournal.com]

Way cool. I just need to make sure I keep copies of it all, then. :-)

[shadopanther.livejournal.com]

My mother has had the IRS question how she figured things on her taxes twice. Both times, her interpretation of the law ended up as correct.

[cjsmith.livejournal.com]

Yeah, the IRS clerks are human too... or so they'd have us believe, heh heh heh.

(Non?) audits

[fyellin.livejournal.com]

Over the years, I've gotten several of these. Usually they want to know where a number comes from, or why some information they received from elsewhere didn't appear on your tax return.

Respond in a nice, professional manner providing them exactly the information they want, no more and no less. Make it clear precisely how you derived the number that appears on the tax return.

As I'm typing this, I see on my desk a "Closing Notice" that I got a couple of weeks ago from the IRS:

Thank you for providing us with additional information about the issue we recently wrote to you about. We are pleased to tell you that, with your help, we were able to clear up the differences between your records and your payers' records.

Don't sweat about it too much. It's just one of modern life's minor irritants.

Re: (Non?) audits

[cjsmith.livejournal.com]

After looking at the letter more carefully, they want to see records of my payments, too. As I still get cancelled checks this is not *too* much of a pain... just some!