The IRS Audit Blog

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Question: Were you ever audited by the IRS?

I was once, because my employer submitted incorrect information. We withdrew taxes-paid money from my 401K for my stepdaughter’s college tuition, and it was sent to the IRS as a before-tax withdrawal. Fortunately, it was corrected with a minimum of hassle.
Laurel g — Oh, man, what a bummer! I am so sorry that happened to you.
Oldman — You’re either fibbing or you’re not a U.S. resident.

Answer: Yes. Mine did not turn out as well as yours though! I was audited for nearly ten years back. For the year I had been audited, we had paid about $15,000 in medical bills for our (then) young son. I had shown all the checks that had been cashed to our bookkeeper, and all was fine, at the time. Then, nearly ten years later, a strange auditor came to audit many people in our area. HE insisted that those cashed checks were not proof that I had paid any hospital bills at all! The hospital had changed hands, and had no billings for me to show this auditor. The auditor said that, “you could have just cashed $5,000.00 checks at your hospital, as far as I know.”………………….I called Sacramento to ask if these cashed checks were proof of hospital payments. The person there said they were. I explained my problem, and then, the person said that the auditor had the right to not accept them, if he ‘felt’ there was any other reason I might have cashed them at a hospital! I couldn’t believe it! I DID have to pay about $10,000 to the IRS, after they did their penalties, late fees, all those things. Another person is this area is an artist who makes about $20,000 to $60,000 on each piece of art that he sells. This auditor told him he did not have a business, since he only sold one or two items a year! He had to pay really large tax fees, as well. Sometimes, auditors are very strange. Normally, they are fair.

Health Bills Could Expand IRS Role

WASHINGTON — Internal Revenue Service agents already try to catch tax cheats and moonshiners. Under the proposed health care legislation, they would get another assignment: checking to see whether Americans have health insurance.

Tackle IRS Audit

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