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afchic
12-27-2010, 23:01
It really scares me that these idiots have so much power over the rest of us.

Back in September, the hubby and I recieved a letter from the IRS stating our 2008 return was being audited, based on the deduction we made for alimony. It seems what we claimed as a deduction was not what the ex claimed as income. So we were told what paperwork to send in to substatiate our claim: Property Settlement that identifies alimony and child support amounts to be paid, cancelled checks of same, copies of the life insurance policy on the hubby in which the ex is the sole beneficiary and cancelled checks showing monthly payments. This is to ensure we weren't counting that a part of the deduction.

So the first page of the property settlement (which I highlighted for them) states Hubby pays ex $450/week alimony which comes out to $1935 per month (4.3 weeks per month) which comes out to $23,220 a year. Child support for the one remaining minor child comes to $125/week, $571/month, $6852. Child support can't be claimed as a deduction on our tax return only alimony, although child support does not need to be declared as income for the ex, alimony does.

So for the past 4 months we have been getting updates from the IRS stating they are still evaluating our case and will provide us their findings as soon as they can.

Well, that came today. You can imagine our surprise when the IRS auditor stated that only $8,400 of the $30,072 we paid in alimony and child support can be claimed as alimony. " We have allowed $8,400 of the alimony deducted claimed. However your remaining alimony deduction remains disallowed because of the $30,072 you verified paying your ex-spouse, $21,600.00 of that much first go towards child support payments that you owed with the rest going towards your alimony paymets. Any child support owed must first be paid as a requirement to claiming the alimony deduction."

So we owe approximately $3000 in back taxes as well as about $1000 in compounded interest (to include all the time it took them to come to their miraculous conclusion, which by statute was suppose to be done in 4 weeks time)

Now I am not an accountant, but I did take a few years of math in high school and college. I also understand there is this thing called "new math" they are teaching the kids now adays, so maybe that is my problem, but no matter how many times I run it through my scientific calculator it comes out the same. $1935 times 12 is $23,220 and $571 times 12 is $6852. So even to a tax novice like myself, The court orders $1935 a month in alimony and $571 a month is child support does not come out to $21,600 por year in child support and $8,400 in alimony.

I could possibly understand it if they thought the two were reversed, hell most people would, that is alot of damn alimony, but that isn't even the case. I wish to hell we were only paying $700 a month in alimony. I wonder if I can provide this documentation to DFAS and they will stop garnishing Carl's pay $1935 a month. Hell, that is an extra $1000 plus in our pockets:p

So hubby and I call the number provided by the nice people at the IRS, and get a vey nice man on the phone who pulls up our file. In that file is every piece of paper I have sent to the IRS on the subject. So over 5 minutes he sits there and sighs and grunts and groans and admits he can't understand why the auditor of our case has come to the conclusion he has come to. He also tells me they are not suppose to send out these notices at Christmas time, and someone is going to get in trouble for that. Glad they are going to get in trouble for sending us the info at the wrong time, but doubt anything will happen for not being able to do elementary school math.:mad:

So the nice man puts a note in our file stating he believes the auditor was wrong and he will have his supervisor call us to follow up.

So all of this is on top of NJ Family Court garnishing our tax return from lat year because their records are screwed up because their computer system can't comprehend that we pay alimony EARLY every month, and since we send a check once a month, and their computer only can account for weekly payments, we somehow ended up in arrears in their system, and hence the loss of out tax return.

Our lawyer was nice enough to tell us the court recongnized the problem, and we will get our tax return back in exactly 11 years, and 10 months and two weeks when we don't have to pay the last two weeks of alimony. Seems they won't force the ex to pay us back because that just wouldn't be fair to her, it wasn't her fault a mistake was made.

These are the same people that are going to be auditing all of us to ensure we are participating in Obamacare. That scares the crap out me. If I have to go through this too many more times I may have to go postal;)

uplink5
12-27-2010, 23:25
So for the past 4 months we have been getting updates from the IRS stating they are still evaluating our case and will provide us their findings as soon as they can.



It takes them 4 months to make up some new math and give you an answer (Christmas be dammed of course) and they expect you (us) to know this shit when we file. There are lots of people who need to wake up......

Hang in there.....jd

kgoerz
12-28-2010, 08:31
I think everyone who pays Taxes has been hit by the IRS. After I paid 4+ thousand this year. I got a letter saying I owed $1157.00 more. No explanation except the amount of interest thats accruing. I know several friends that received letters saying they owe more then what they originally paid.
Seems to me that they are really going after the people who actually pay Taxes lately. They only gave me a phone number to call. When I could not get a live person I decided to wait until I visit my accountant this year to pay it. Cost me $12.00 a month in interest and fines.

The Reaper
12-28-2010, 12:02
We had the New Homeowner Tax Credit denied, allegedly because we were making property tax payments on the lot we built the house on.

When I called the IRS, they asked me why we had property tax writeoffs, and as soon as I explained it, the guy said no worries, he would fix it. Six to eight weeks later, we got the check.

My tax preparer said that it was BS, they basically deny legitimate deductions whenever possible and hope that a percentage of the people will not complain or dispute it.

Dispute, document, appeal, and go upchain to a supervisor whenever necessary.

TR

afchic
12-28-2010, 16:26
We had the New Homeowner Tax Credit denied, allegedly because we were making property tax payments on the lot we built the house on.

When I called the IRS, they asked me why we had property tax writeoffs, and as soon as I explained it, the guy said no worries, he would fix it.

My tax preparer said that it was BS, they basically deny legitimate deductions whenever possible and hope that a percentage of the people will not complain or dispute it.

Dispute, document, appeal, and go upchain to a supervisor whenever necessary.

TR

The fact this has become the norm not the exception completely blows my mind. And of course you can't sue the bastards for the expenses you incure trying to clear your name. If these individual auditors were held accountable for their actions, I am sure you wouldn't see as much of this crap as you do.

Richard
12-28-2010, 18:14
All this reminds me of why I have an accountant who specializes in tax laws to do my tax returns. I just keep every damn receipt and bank/IRA/etc statement, give them to her, and she computes, files, and answers any questions from the effin' size 2 hats at the IRS (if necessary). It hasn't happened yet and, to me, she's worth every penny of the $400 I pay her annually and has led me to believe that those who choose the 1040EZ and do it themselves may be asking to be audited in the hopes that they will/can not argue their own cases.

OBTW - I cannot wait to see how the IRS is going to monitor our proposed national healthcare programs - NOT! :eek:

And so it goes...

Richard :munchin

bandycpa
12-28-2010, 19:07
All this reminds me of why I have an accountant who specializes in tax laws to do my tax returns. I just keep every damn receipt and bank/IRA/etc statement, give them to her, and she computes, files, and answers any questions from the effin' size 2 hats at the IRS (if necessary). It hasn't happened yet and, to me, she's worth every penny of the $400 I pay her annually and has led me to believe that those who choose the 1040EZ and do it themselves may be asking to be audited in the hopes that they will/can not argue their own cases.




Now that's just good advertising right there. And very timely too. :D

T-Rock
12-28-2010, 19:19
Hi, we’re the IRS, we know where you live, and we‘re coming for you…

:eek: > http://www.youtube.com/watch?v=iA09kAfCe2A&feature=related

afchic
12-29-2010, 10:15
All this reminds me of why I have an accountant who specializes in tax laws to do my tax returns. I just keep every damn receipt and bank/IRA/etc statement, give them to her, and she computes, files, and answers any questions from the effin' size 2 hats at the IRS (if necessary). It hasn't happened yet and, to me, she's worth every penny of the $400 I pay her annually and has led me to believe that those who choose the 1040EZ and do it themselves may be asking to be audited in the hopes that they will/can not argue their own cases.

OBTW - I cannot wait to see how the IRS is going to monitor our proposed national healthcare programs - NOT! :eek:

And so it goes...

Richard :munchin

We have an accountant too, unfortunately they weren't just asking for reciepts, but things to do with the hubby's divorce, so he helped us a little, not a lot. Finding a new one as we speak.

afchic
12-29-2010, 16:49
Hey Afchic -- was hubby behind on child support for any reason? If he was behind, the IRS is going to say that part of the alimony goes to make up that support first, then gets applied to alimony.

Also, there are very specific ways that alimony needs to be designated in a divorce judgment to avoid taxes. Unfortunately, just saying that a payment is for alimony (aka known as the PC spousal support) is not enough. Double-check with your hubby's divorce attorney that he wrote it correctly.

If that isn't the problem, I suggest consultation with a tax attorney to see if there is anything he/she can do. Attorneys are hurting along with everyone else and you probably will be able to find one that will consult for free or very low cost.

He has never been behind on any payments, always at least 2 weeks ahead. We know exactly what can be claimed for alimony, which is why they wanted all the other documentation such as child support, life insurance payments to ensure we weren't using that as a deduction as well.

I don't want to have to hire ANOTHER attorney because of someone elses' screw up. Hopefully we can get this handled with them directly because having to make payments to another lawyer because of his ex-wife's BS is more than I can handle. No offense to the lawyers on the site, but from my experiences lately lawyers are just about worthless. I do all the research and then get charged $250 an hour for them to write a damn letter based on my research.