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Spring has Sprung: Can the IRS be far behind?
by LaVonne Boruk
The snow is melted, the last icicle diminished to less than a warm teardrop. The last few days of February in my neck of the woods have been warm and sunny with little rainfall. The winds of March are just around the corner and soon will be blowing sand in our eyes.
His Nibs has taken out the ladder, scraper, paint brush, and tools. He is systematically going around the exterior of the house looking for any damage the harsh winter caused. He looks for loose shingles on the roof, rotted out areas under the eaves and around the doors and windows. Home maintenance is a never-ending chore. This winter hit the roof over the carport the hardest. He is working diligently to make repairs and spruce it up.
He tilled the vegetable garden, and put out some cool weather plants. He raises the sweetest onions in the world, bar none. It's his green thumb and loving care. Nothing can turn hot and sour under his care. He doesn't grow lemons or hot peppers, though. The middle of March will find him planting in earnest for a bountiful crop of fresh vegetables to eat all summer long, and even put away for the next long hard winter.
Then April will be upon us. Ah, April! My favorite month of the year. Not too cool, not too warm, nor too wet or too cold. Flowers burst into bloom, brightening up the green carpet of lawns everywhere. Dogwoods, wisteria, azaleas make Columbia a beautiful city. And then . . .
And then, that dreaded April 15th is upon us. Tax day is here! But wait! Why should we dread that day? Is the roof going to cave in? Is the mortgage going to come due? Is your spouse going to divorce you? Will your children abandon you? Is the world going to end? No, none of those things are going to happen. Not if we've been honest, and given Uncle Sam his rightful due.
Will you be audited this year? You could be. I could be. Anyone could be randomly chosen by the IRS for audit. But is that anything to get bent out of shape about? To make foolish threats? Shades of Oklahoma City.
You have nothing to worry about from the IRS as long as you've been honest, reported all of your income and did not pad your expense account. Even that cash you were paid under the table must be reported, and taxes paid on it. Uncle Sam is not stupid. He knows all your games and tricks. So play by the rules and you'll have nothing to worry about. I'm convinced of that. You can try to convince me otherwise, if you like, but I warn you, you'll have a hard time doing it.
So what should you, the average taxpayer, do when you receive that dreaded notice that you have been chosen for audit? The one thing you should not do is panic, or try to fool your good old Uncle Sammy. He's smart, believe me, and not easily fooled. And don't make any threats. Even idle threats will get you into more trouble. The one thing that IRS hates more than being short-changed in their rightful due, is being threatened by foolish people. Threats, even innocuous threats, do not sit well with the IRS or the federal or state governments. And it certainly will not do you, the taxpayer, any good. So what should you do?
I'll tell you what I did the year that both my federal and state tax returns were audited. My husband happened to be in the thick of battle in Vietnam that year. He had the privilege of waiting six months after his return to the US to file his tax return. But I had to file mine, and having his power of attorney, I chose to file his as well. And I filed separately, since for that particular year it was better for us to file separately.
We had three young children. Normally, we would have filed married, filing jointly. But this year I was working in South Carolina, and the state required me to file as a non-resident, since, legally, we were residents of Texas. This is when life began to get complicated, for me. I made certain choices that didn't sit well, particularly with the state of South Carolina. You see, at that time, Texas had no income tax. South Carolina didn't like that idea. Still, my income had been earned in SC, so the state could tax me.
I was receiving money from my husband, but I was earning more money than he was providing for us (He had to keep some for himself). Therefore, I chose to allow him to carry one dependent while I carried the other two children. And this is what triggered the audit. I had to prove that I furnished more than half the support of these two dependents. That was the only question the audit required me to answer. And if you are ever audited, pay attention to the one or more things that are questioned. Do not bring into the conversation any other question. If you do, you could be opening a can of worms.
Fortunately, I had taken a class in tax preparation. I've always done our taxes, even to this very day. I would never pay a tax preparer to put a few numbers on a sheet of paper. Only you are responsible for your taxes. The tax preparer is never responsible for your taxes. So get that thought out of your head. The preparer is only responsible for his/her own honesty or lack of it. And he/she is going to put on the paper only the numbers that you tell him to put on it. So why not put them there yourself, and save some money to boot?
So what did I do? First, I went over my tax forms myself. Finding no error, I took it to a CPA. That cost me nothing, since I could see one on the nearby military post. He went over my tax forms and told me they were correct. He then proceeded to re-file my taxes for that year, and I typed up a letter of explanation of the items in question. That's all there was to it. The IRS even let me mail it in rather than going downtown to meet with them. But you don't mail it without their permission. If they tell you to go downtown, you go to their offices, or whatever convenient place they have chosen to meet with you. If that place and/or time is not convenient for you, then you can ask to do it by mail, or some other place and/or time If your taxes are complicated take along the CPA or the tax preparer who prepared the tax return in question.
What about amended tax returns? Some folks climb the walls at the very thought of amending their tax returns. Well, folks, I've done that many times and have never had a problem with it. The amended tax return is usually much simpler than the original return, because usually there is only one item to be amended. So never be afraid to amend your taxes should the need arise. Things do change. We do make mistakes. The amended tax return rectifies the mistake that was made in the original. It is often to your benefit to file an amended return. You can do that for three years after the return in question was filed. For example, the 1999 tax return must be filed by April 15, 2000. Therefore, you have until April 15, 2003 to file an amended return for the 1999 tax year.
What if you are in business for yourself? That's a whole new ball game. In that case you must file estimated tax returns and pay your taxes and the full amount of your own social security (FICA), quarterly. Not fair, you say? Think about it. All of us pay our taxes quarterly. That is, the employed person has taxes held out of his paycheck every payday. His employer then sends the withheld taxes and social security (FICA) to the IRS along with the other half of the employee's social security. In other words, the employed person pays only half his own social security and his employer pays the other half every three months to the IRS. Now what was that you said about "Fair?"
Birds are chirping outside my window. I think I'll go see what they have to say. Maybe they have a new song for me today. And if I look hard enough I may find a daffodil in bloom.
©2000 LaVonne Boruk
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