Just home from a week in
Shaken by the letter's tone … I read about the extra $40,000 … in supposedly unreported earnings. Then I found myself wondering how a small business could suck in $40,000 extra ... and not see it. 
It must have been an error I figured … because MITA wins international awards for its integrity. When it comes to finances, we deeply value honesty here at the MITA center.
Yet IRS’s bold statement on the front page claimed that income figures reported in their files do not match entries on my 2006 form 1040. The notice went on … “If this information is correct, you will owe $14,668. Yikes! Good thing I’ve learned how to nudge past toxic dregs of fear.
After catching my breath ... I called my respected accountant and he agreed to help me out. I offered to resubmit all statements of income for 2006. Next I called my senior VP … Dr. Robyn McMaster … and asked if we’d been richer than noticed in 2006. Then I contacted an employer who’d sent my tax forms for the 4,600 that IRS claimed was really a hefty 46,000.
After slogging through endless mires built into sluggish IRS phone lines … a financial rep finally picked up. With my prompting … he spotted the wayword figure … and agreed that IRS personnel popped a decimal into the wrong place. Their error added $40,000 to taxable income. No wonder the mismatch in my tax forms and theirs!
As brain based business leaders … we often speak of mistakes that can teach us and bring us into a better place … and I am wondering if that can happen here. I lost hours of work finding the IRS error, and had to fight off stress that comes with any thought of crossing tax experts ... or submitting incorrect figures. Before I could even unpack from my trip … I had to check back with person after person to spot the problem … and thankfully several colleagues helped. At what cost?
You could say that IRS mistake cost me dearly …both in time and emotions. The letter indicated I would be also charged an extra $2,274 in penalties … in addition to $1,023 or more in interest ... if the $15,000 was not paid by March 20. To their credit … they’d be happy to accept payment on VISA … if necessary.
When Mr. Fallen, at IRS, spotted the decimal error, he simply stated … “These things happen … not to worry.” He promised to shift the decimal to its correct spot and assured me that my owed balance dropped to zero in response.
This experience left me curious about our government’s mistake making policies … and their willingness to make amends for errors. With my list of penalties still in front of me … my question here is.
What penalty exists for IRS errors? Could IRS officials restore tax payers’ confidence that we can work together for finer financial results for this country? I’m speaking of communication that builds goodwill … through integrity and mutual respect. What do you think?
My sense is that someone charged by the IRS is presumed guilty upfront even though you have 30 days to set it right. Even in a court of law an individual citizen is given more respect than that. Thanks goodness you spoke with someone who could see the error was on their part.
It would be interesting to know how many such decimal errors the IRS might make in a year. Hmmm... do you think they might be hiding some of the facts?
Posted by: Robyn McMaster | February 23, 2008 7:14 AM | Permalink to Comment