A little before the holidays we got a nice friendly letter from the IRS… they had examined my 2004 returns and decided I owed them about $1000 more. This turned out to be directly related to the fact that for 2004 my employer at the time decided to report a significant portion of my income on a 1099-MISC rather than various lines on the W-2 and then when the error was pointed out to them refused to correct the mistake because their 2004 books were “already closed” and it would cost them money to reopen them. At the time H&R Block looked at all the evidence I had showing why the income should have been on the W-2 and agreed with me, and determined that the best thing to do would be to file as if my employer had reported the income correctly even though they had not done so. We had the evidence to prove our case if it ever came to it.

Well, the IRS did indeed finally decide that they thought there was an issue. We made an appointment with the Block back in December, but their offices lost power due to the wind storm we had back then, and so we had to reschedule for now. At the time we made the first appointment we told them that the only papers we had redily available were the new letters from the IRS, since the rest of the documentation was in boxes in storage… actually, worse than that, when the movers packed our stuff in Florida, they took a lot of my paper archives (including the tax stuff related to this) out of labeled boxes, and dumped them into new… completely unlabeled… boxes. We have several hundred boxes in storage. Packed in tightly. Mostly now unlabeled, even those we had carefully labeled before the move. Somewhere in there is all the documentation surrounding the 1099 vs W2 issue from 2004. It can be gotten, but no time soon. The IRS wants their money by this Friday or they threaten top do nasty things. We told the H&R Block person all this when we made the first appointment. They told us to come in anyway and bring what we had, they should be able to get the rest of what they needed from their files.

But when we got there this morning, they had forgotten all of that. First they sat us down and tried to get us started on doing our 2006 taxes. No… that’s not it at all. Once they knew what was really going on they switched us from the trainee who had been assigned to us to the manager of the branch. She asked us for the papers which we had explained on the phone that we didn’t have. She said that they couldn’t really do anything without that… at least the return itself. We pointed out that they did the return, so they should have it on file. But guess what, they don’t have a national database. Our files are in Florida. They can’t get them in Washington. Then they went to try to look up the number of the office they used in Florida, so they could have that office FAX them a copy of our file… but their systems weren’t working, and they couldn’t get it up to even look up that branch’s phone number. I suggested they call their own national 800 number and ask or maybe call information, but they ignored those suggestions. At this point, they also pointed out that the office in Florida probably only kept the actual final form, not copies of the various documentation we brought them, not even the 1099 and W2 itself, let alone the supplimentary material we had brought in. Which they now thought was probably not enough after all. In the end, they basically said they could do nothing for us until we found the docs, despite having said the opposite when we set up the appointment. (Otherwise, we would not have bothered coming in.)

So, currently plan is: call the IRS tomorrow (they are closed today for President Ford’s funeral) to set up a payment plan to pay what they say we owe (about a grand). H&R says we should arrange to pay as slowly as the IRS will allow us (rather than just going ahead and paying it all at once) because of how the policies are structured on what money you can get back in what timeframes if you later appeal. Then, we need to find our documentation, then come back to H&R block and they will help us appeal these payments and eventually get the money back.

What a pain.

Brandy is very mad and upset, and full of talk of lawsuits against my former employer, who caused all these tax problems by refusing to correct the incorrect forms in the first place, not to mention all the other ways in which they screwed us financially and otherwise. Also of trying to get the IRS to fine them for not correcting the paperwork in the first place. She has some good arguments for why doing all that would be good… but I so much just want to be done with it all. I want to pay the money and then never think about it again. But she is probably right and when we KNOW they have cost us not just this thousand but thosands more (perhaps even tens of thousands) by other things they did… and most likely not just to us, but to other employees over the years… not to mention the costs to their customers, which must be immense… And somebody has to fight back sometime rather than just saying “thank god we escaped” and never thinking about it again like I’d kinda like to do. Dunno. Guess we’ll think about it.

But in the mean time, have to suck up and pay the IRS since it will likely be months if not years until the box with the papers we need to prove that we don’t really owe this 1000$ surfaces.

Bleh. Didn’t I hear something about the 16th Ammendment never being properly ratified making all income tax illegal? Oh yeah, too bad that is all BS. Would be nice if true. :-)