Ok, so let me just warn you, this post will be a bit lengthy. I have alot to say today. We just completed an IRS audit of 2 years (2007 & 2008). This took 2 days, 5 hrs the first day and 3 hrs the second day. This will be time lost forever to me, and I feel I got jipped! I do not know why we got audited, other than we are a small business owner/self employed. The official answer was it was random, according to my auditor "B" as I will refer to him, we just won the reverse lottery. (However I do have my own thoughts as to why we were chosen). Thanks B, not much comfort at this point. I will try to recap some of the highlights of our time together.
Basically I had to bring in a bazillion records for everything from gas receipts to client files. I was told that the IRS had every right to contact our bank and ask any question they wanted about of finances, and that they could turn over our information to any government agency if needed. Now, I am not worried that the FBI will be rifling through our gas receipts, but the concept does make me a little uneasy. I had to lay out what a typical day for our business was, what Dewayne does for the business, how he gets clients, how he does a job, how he bids jobs, what do I do for the business, how we keep records. I had to fill out a record of what our monthly/yearly expenses are- what we spend on groceries, entertainment, getting our hair cut. Yes I really did just say that, they wanted to know how much we spend on our hair!I had to justify so many things, it was just plain crazy. We got dinged on a few things, and the truth is that they were just honest mistakes. There was no shady behavior, we just did not know!! B said I did not have enough documentation on a couple of things, but I gave everything I had. I am not sure I could give any more. The second day, as I was going through the x-ray machine upon entering the building, the security guard asked me if I had mace in my bag!! It was a bottle of hand sanitizer. I asked him if he saw alot of mace coming through there, he didn't really answer me. I guess he must.
So, the outcome? I won't tell you the actual damages, because it is just ridiculous. Especially after we paid an arm and a leg already. I feel that if we made mistakes, then we should pay. I get that. Here's what burns me up. The IRS charged us back taxes, a 20% penalty fee on those taxes, interest ranging from 4-6%from April 15, 2007 and 2008, and the best of all, they charged AN ACCURACY FEE of almost $1100.00! What is an accuracy fee you ask, so did I. I asked B, "so you are charging me to do my audit?" He says, "well if that's what you want to call it." They charged us to audit us!!!!! I did not ask for this!! Trust me I have so many better ways to spend $1100.00 than on your stinkin Accuracy fee. So, the options for payment are to pay in full because the IRS really likes that according to B, to be on a payment plan with interest of course, or file for a 4 month extension to make your mind up, with interest again. Interest on top of the interest you are already hit with. And once again B says "well you owe the IRS interest and it is their right to collect it because you didn't pay the correct amount at the time you filed your taxes". Well B, I guess they do feel it's their right, I have other opinions about that. Oh, and I asked about settling for half, say I brought in cash next week half the payment? Well, I have to fill out a 45 page document to start the process, which according to B takes months to get through. And he said our chances are slim because we'd both have to be unemployed and our house in foreclosure to get a deal like that. Well, B, we may not be far from that,
How is a small business owner supposed to make it? We seriously would go under if we had employees. Oh yeah, we got dinged on claiming the payroll taxes we had to pay on our employee in 2007. You can only claim HALF of that. How about paying half of the payroll taxes? What a croc! President Obama runs around moaning about credit card companies and how it's highway robbery what interest they charge people. Um, can we talk about 20%, can we talk about accuracy fees? You can shove it . I was a Bush supporter, although he got pretty squirrley at the end. I voted for McCain because he was the lesser of two evils, and only because he had Palin on the ticket. You know what? They vast majority of them are crooks. I am sick and tired of being raped by the government. We work hard, we pay more than our fair share- we are somewhere in the 25% or so tax bracket. We cannot get ahead because we are forced to pay STUPID taxes and fees. We have to carry Workman's Comp insurance even though we have no employees and my husband cannot use it if he were hurt on a job. That runs us about $700 a year. It is high time the taxpayers of this country tell our government to stop it!! Stop stealing my money, and if you are gonna take it, spend it wisely.
Ok I will stop for now. I am sure you will hear more from me on this.