I wish I had a magic wand like Harry Potter. Then I might have had a chance against a recent and serious run-in Janet and I had with the IRS Dementors. The IRS is out of control and something needs to be done about it. I’m for tax enforcement, but not when it comes at the expense of those of us who live and play by the rules. Even Midas Touch agrees as he flips them off while I write this. I know this because in spite following all the rules, meeting all filing deadlines, and paying my taxes owed and on time, they still came after us and our business with a vengence. We have been fighting with them for the past year, working through our accountant, as they threatened to take our passports, put a lien on our house, and liquidate our travel business. Not once, but several times. I do all the right things when it comes to my taxes, working through a highly competent CPA, yet they came after us anyway. And for an incredibly stupid reason…a business tax filing for a pass-through LLC where the business owes nothing. All profits and losses pass through to my personal tax liability so filing the business form is a formality.
The IRS complaint was not with our personal taxes. Rather they find us $1000 for failure to file our business taxes on time. It is important to know our business is a spousal LLC. We file an informational return for the business but we pay no taxes directly through the business. By law, for our form off LLC all of our business tax liability, profits and losses, pass through to our personal tax liability and are accounted for there. And they were! So because someone in the IRS felt they didn’t get the business form in time, information which they will get on our personal tax forms, we got fined. But here’s the thing…we did file on time, and we paid our taxes on time. Our accountant produced the business and personal filings with all supporting documents ALONG WITH THE RECIEPTS from the IRS reflecting they made it in before the filing deadline. My guess it got stuck in the computer because of how screwed up the Trump tax reform made things and didn’t get puked out onto someone’s desk until after the deadline. And that bureaucrat didn’t bother to look at the original receipt dates.
The next letter from the IRS threatened to take our passports, put a lien on our house, and take our business. Again, our accountant sent the documentation showing everything was in order, which probably got routed back to the same mindless bureaucrat who send out the late letter in the first place. Again we got another threatening letter. Pay up our we’ll make your life miserable. Finally our accountant elevated it and we got a 60 day referral while the IRS studied the matter. What’s to study? Open and shut case. About two months later we got another letter saying they needed an additional 60 days to review because it was a complicated case. No, it wasn’t! All necessary evidence proving we filed on time had been provided several times.
Finally months later, just as we began gathering info for the 2019 taxyear we got a letter from the IRS telling us they were approving out request to remove the penalties. But the story doesn’t end there. The letter was threatening saying this was a one time relief based on our track record of timely filing. What? If we have a record of timely filing what was different about this timely filing? To add insult to injury, the agent advised us because we were a domestic corporation (which we aren’t) the deadline for us to file our business is 15 March, which it isn’t. TOTAL incompetence.
We have been filing by April 15 every year we have been in business with no hassle from the IRS…now suddenly the filing deadline for business is 15 March? Did ANY business get the memo? Our accountant certainly didn’t. She did note the IRS was changing the tax code way past April and into June trying to comply with the ever changing interpretations of the Trump tax reform, yet expecting filers to comply with the new code change retroactively and without promulgating them to the public. So much for Trump’s claim of being able to file your taxes on a post card. I am so not looking forward to this tax year.
Bottom line, even if you think your taxes are simple, use an accountant. Not HR Block, not Turbotax or any of these box store places, but a bone fide CPA. It is the only way you have a chance against the IRS. The IRS absolutely sucks, and Trump’s tax reform should send the entire IRs, along with Trump, to reform school
The IRS owes me and my accoutant a clear explanation, an acceptance of culpability, and apology. Instead I fully expect an audit.