Examination

I’ve never been audited by the IRS before, although I do not fear an audit as I prepare my tax returns honestly and conservatively. Also, I keep all my records. I don’t mess around with the IRS and don’t push any envelopes. I learned this week that they do an “examinations by mail” in addition to their in-person audits. Basically what this means is that if their computers flag something that looks suspicious at all, they recalculate you taxes with the questionable item removed. They tack on penalties and interest, and send you a letter telling you the total that you owe. I got such a letter this week regarding 2006, one of the years I filed electronically.

I found it a bit heavy-handed. I can see how this method is efficient, as receiving a whopping bill from the IRS compels you to take care of the matter pronto, but what happened to innocent until proven guilty? Basically I have 30 days to prove my innocence or else. (Fortunately, it only took me about 30 minutes!) The letter did state that by sending the letter the IRS wasn’t saying I was dishonest but if their zero is correct, I would be very dishonest. You couldn’t chalk that up to a mistake. (The line in question was the charitable contributions line for which the largest component of this deduction for me was funds given to the Church, and I have the donations statement and all other receipts so I should get another letter in a few months saying we’re cool.)