$20k Bill From The IRS
I started doing my own taxes back in 2005. It wasn’t until 2008 when I started getting little letters by the IRS saying that I actually owe $x.xx more than what I had indicated on my tax return, sent in neat little letters as to not appear too intimidating, and the paragraphs starting out in a benign tone of “Please note, this is not an audit, we merely have found information that is different what you reported.”
In the beginning I used to diligently pay the extra amount. Why? Because I didn’t understand what the fuck they were writing in those letters they sent to my house, it was geek speak.
There is also that bit of fear everyone has when they get a letter from the IRS. Shit, are they gonna say I owe more money? Is there something I fucked up on?
As I started making more money that $x.xx started going up proportionally. Was the tax software I was using incorrect? No. Was I doing it wrong? No. So I decided to go ahead and have a competent CPA do my taxes for me from 2012-2014. Long story short, that move didn’t decrease but actually increased the size of future IRS correction bills.
In those 3 years I got some of the highest ‘corrections’ requested by the IRS. Every 3-4 months I would get a new letter sent to my address, snap a picture of it and email it to my accountant. Sometimes they were repeat requests, sometimes responses to my replies and on 5 different occasions a bill.
Brent, my CPA, would then tell me why they were wrong and that I should call them and tell them why they were wrong. I tried that once (calling them) and got some grandpa on the phone who basically talked me out of what I told him – in a bit of a patronizing tone (though likely well intentioned). I hung up the phone and had this confused dog look on my face.
I then picked up a pen and paper and wrote exactly what I needed to say to these fucking scoundrel salespeople they had on the phones. After my letter was received I would get a few more communications for 6 more months as if they never got my letter, requesting the same bill.
But suddenly I started getting letters saying “after close review of the information you sent us you no longer owe us any money”. This happened every year. I’m not making this shit up. Dude? For real?! All that headache and paperwork just for you to say “Meh, you don’t owe us the money, go fuck yourself, we’ll get you next time.”
Today I got the best letter ever from the state of Oregon.
I mean this one is just … verrückt. I made a gross of maybe $250k in 2015. From my W2 paychecks approximately $23k was withheld for state income taxes.
When I filed my taxes I was actually gonna get a couple grand back, though for some reason the money never arrived. Oregon needed to verify some shit so they asked me for my fucking birth certificate. Really? Okay, snapped picture, uploaded it to their website.
Then this letter. Apparently I don’t get a refund of $2k, but I do owe an extra $20,000. I mean sure, perhaps Oregon State income taxes have now gone up to 19%, it is a pretty decent state to live in but I have a tough time believing that income taxes are higher in Portland than New York.
I got duped a few times in the past by my mortgage companies and student loan companies. I rarely blame others for my mistakes, but these really weren’t legit interactions.
The student loan and mortgage companies were private enterprises, built to make a profit by operating as close to the margin of the law as possible. But what about the IRS? I mean really, how many times have they tried to swindle me out of my money. Since 2009 the only extra money I paid from all their audit letters was less than $25.
I’m all about having faith in my government and supporting them with my tax dollars. But it’s this sort of shit that makes me question the integrity of my government’s financial department. If the IRS doesn’t know what they are doing and can’t interpret their own laws, does the US government know what they are doing with their money?
Sometime this week I will write one of my hand-written letters to the IRS telling them why their $20k tax bill is shockingly wrong, yet again. But how can I escape this annoying IRS tax cycle?
Well, I ended my reliance on Sallie Mae by paying off my student loans less than one year after deciding that Sallie Mae was a dishonest company. I also got the better end of the deal by having my secondary loan essentially dismissed by the guarantor, oh what a beautiful moment that was – I’ll tell you that story some other time.
I will minimize my dealings with the IRS when I no longer generate any taxable income. I still will get to enjoy all the good stuff that I paid into but I won’t be squeezed year after year by the IRS. I can generate some income to live off of but end up paying pocket lint to the IRS based on deductions and exemptions.
Dr. Mo being asked in 2019, what’s your biggest accomplishment this year now that you are retired? “Well, I paid $0 to the IRS. I still got a letter saying I owed $123,000 but it’s okay, I sent them a letter back saying they should garnish my future wages until that bill is paid off.”