Audit Letters

Did I mention before that we were being audited for our federal taxes?   I know, I know, I could just search the blog history and find out the answer, but since I write this thing and I can’t remember, then maybe you can’t either.   That, or I just have a poor memory.   So if I didn’t mention it before, we’re being audited for our 2013 tax year.

We got a letter last year from the IRS which included a list of several categories they would like for us to show proof for what we’d claimed.   There were only four categories, which was great, only those four categories constituted the bulk of the work/transactions/complexity surrounding our entire return.

The government conveniently included a single, letter-sized envelope for us to return the stacks of paper we were going to be sending and told us to get busy because they’d like an answer in thirty days.  We got busy.   I got busy because I was annoyed—we don’t try to cheat the government.   We don’t even try to bend the rules or find loop holes or anything.   We do “honest taxes”—or at least that’s what we pay our accountant to do.   So this bit about “we’re not sure you paid us everything you should have, can you make sure and show us your work?” got me annoyed.

We were most likely audited because several things had changed in our 2013 return from prior years.   That, or we were just randomly flagged.   Either way, I wanted this potential accusation addressed and cleared up, stat.   I worked on the medical receipts and I found in so doing that my record keeping wasn’t as buttoned up as it should have been.   In part, this was because we’d never needed to prove what we’d paid before.   We paid the bills, sure, but we had never had to show anyone else exactly what bills we’d paid, how we paid them, how far we drove when we did the things that got us the bills in the first place and what medications were prescribed so we could cope with all the bills we’d been paying.

By the time I had our stack of medical records totally in order, spreadsheeted, fretted over and finalized, I had also updated our 2015 medical records to a new level I like to refer to as “Total Thoroughness v2.0”.   Were this auditing audacity to happen in the future, I would simply grab the folder, print out the spreadsheet send it off by return mail with a big, “Nice Try” stamped on the front.

Back to 2013 though: my husband was confirming things for the other areas and I was coordinating an overall spreadsheet including everything we’d claimed, had receipts for and/or had documentation supporting the dollars.   As I kept totaling everything up I knew we had a problem.

You already know what the problem was, right?   The numbers didn’t match up.    On the positive side, we had not been as thorough as we could have been in 2013.   I was able to add travel mileage for every medical-related expense.   I’d gotten summary records from the insurance companies, medical providers and our pharmacy.    In so doing, I’d found a good bit of unclaimed expenses.   But I was missing proof of payment on several things and my insurance company from 2013 no longer existed.   The web site was gone with a “we’re no longer in service” message on the front page.   I had multiple, larger expenses I had paid, but I couldn’t prove I’d paid them.   And worse yet, I had one large bill I thought I paid in 2013 but found out later had rolled into the next year.    So all that combined, we were short.

Nothing could be done about it though.  We mailed off the packet and resigned ourselves to a fine, interest and most likely additional auditing for the next twenty-three years.  We would also have to come to terms with the stigma of being tax evaders.   Well, maybe not all that, we were pretty darned close dollar-wise, but that’s how it felt to me when we realized we were short.

Next, we waited.   When the audit deadline (on their end) came around we got some letters.  We got a status update letter with two copies of the same single-page letter in the envelope.   We also got a second letter in the mail on the same day with another two pages of the same single page letter.    Four copies?  This must be bad.   We must be in serious crap now.    The letters said the government had been quite busy but they hadn’t forgotten us.   They had graciously extended their own deadline and would be back in touch soon.

We waited again and after another month got an envelope with two pages in it…two of the same page in it, saying thanks for all that paperwork we sent in.   It said they had no additional questions and had decided there would be no adjustment on our 2013 Federal Tax Return.  Also, have a nice day.

So we’re not tax criminals.   We’re back on the good guys team again.    Next time, IRS, I’ll be ready for you.

The Big Boy Tiny Girl Nose Explanation:  On the way home from school yesterday my daughter was blowing her nose on tissue number two after yelling “mucous!” from the back seat at me.   My son said, “Reese is the best nose blower.”   I said I agreed.   He thought for another second and then said, “and I’m the best nose picker.”   I laughed and told him he was definitely correct about that one.