TIME: Almanac 1993/TIME Almanac 1993.iso/time/040891/0408203.000

Text File | 1992-08-28 | 6.1 KB | 140 lines

                                                                                BUSINESS, Page 54

MONEY ANGLES

"Dear IRS . . . "


By Andrew Tobias


    I finished my taxes today, which isn't much to crow about
when you consider that they were my 1989 taxes. (Hope to finish
1990 next week. Big job. Been busy.)

    It's not that I was late. No, I got my 1989 taxes in right
on time. But then a few weeks later I got a note from the
Internal Revenue Service. It was a nice note, as these things
go. The IRS computer has definitely been through charm school
in recent years. But "as a result of an error we have corrected
on Schedule E of your return, you owe IRS . . . [an arm and a
leg]."

    Well, actually it wasn't an arm and a leg. More like a
finger. Still, because I had done my return with one of those
computer software packages that promises no mistakes (and
because my name and face were on that computer software
package), I was more than a little curious to know just what the
error was.

    "Yo," I wrote back. "You corrected an error on my return?
Getcho hands off my return!" Then I tore that up and sent,
instead, a meek request that they identify my error. Call it a
sixth sense I have for dealing with bureaucracy.

    JUNE 25 Back came a letter from Glynda F. Hankins, chief
of the IRS taxpayer assistance section, over whose signature I
would guess 10 billion such letters go out each year, telling me
the IRS was looking into my inquiry and would try to get back
to me within 30 days. I was impressed.

    AUG. 17 The promised response. Thanking me again for my
inquiry, it went on to say: "Our records show we received a
return from you on Apr. 15, 1990; however, it is not immediately
available. Please send us a newly signed copy."

    AUG. 23 Before I could whip off another 30-page return, I
got, just six days later, yet another nice letter from Glynda
Hankins, this one informing me that "the information you
requested is enclosed." Except that it was not. Enclosed instead
were a copy of the basic "who must file" instructions (someone
had underlined, in purple, the paragraph about widows and
widowers) and a photocopy of a death certificate for a man named
Clyde Majors, who had died in 1988 of "myocardial infarction due
to a ruptured esophagus." ("WARNING:" read the bottom of the
death certificate the IRS had photocopied for me, "Any
reproduction of this document is prohibited by law.")

    "I am sympathetic to the enormous task the IRS is charged
with," I wrote back, "but as you can imagine, it is hard for me
to understand what Mr. Majors' esophagus might have to do with
the error on Schedule E of my return." I went on to explain
that, lest this turn into some sort of nightmare in which I
awoke one day to find my home being loaded onto a truck, I was
enclosing the disputed amount due, plus interest -- but that I'd
still appreciate knowing, at their convenience, what the alleged
error was on my Schedule E. I knew that if I turned out not to
owe the money, I'd eventually get it back with interest.

    SEPT. 26 A letter arrived acknowledging my letter and
promising a response within 30 days. Like all the others, this
one closed with, "We apologize for any inconvenience we may have
caused you, and thank you for your cooperation. Sincerely,
Glynda F. Hankins." And I must tell you that, even though it's
naturally just a form letter, that kind of touch -- to me at
least -- makes a difference.

    NOV. 2 "The information you requested is enclosed.
Sincerely Yours, Glynda F. Hankins." No death certificate this
time. Just a blank 1989 Schedule E. Nothing else.

    "I already have plenty of blank tax forms," I wrote back.
"But at your convenience . . . "

    NOV. 28 A letter came from Glynda Hankins acknowledging my
letter and promising a response within 30 days.

    JAN. 29 Ta-Dah! Here was a copy of my 1989 Schedule E,
which someone had marked in red to show that Lines 32 and 33
didn't add up to Line 34. Bingo! It hadn't even occurred to me
to look for that kind of error, for if there's one thing a
computer can do, it's add.

    As it happens, my return was correct -- the numbers only
appeared not to add up. (If you care: included in Line 34 were
numbers from a supplemental schedule of additional partnership
investments that wouldn't fit on the main form. It was a
legitimate glitch. My software should have made it clearer to
the IRS's software that supplemental numbers were being included
in Line 34. Their software should probably have known to look.
It serves me right for investing in so many stupid partnerships
in the first place.)

    Points to be made:

    -- Don't assume the IRS is always right. The telephone
advice they render is correct only about 91% of the time,
according to a Money magazine test -- admittedly a dramatic
improvement from prior years.

    -- Don't assume your accountant is always right. My
mother's taxes are done by a top tax attorney who relies on a
large professional software package. But in checking the return
he prepared, I found, and he confirmed, that his software had
her paying $2,000 too much.

    -- Don't be afraid to correct your mistakes. The form you
need is a simple two-pager, Form 1040X. You specify which
year's taxes you are correcting, show the correct new amounts
and explain the changes. Contrary to myth, IRS agents don't sit
around waiting to pounce on these things. The IRS swears that
filing a 1040X does not increase your chances of being audited,
and considering how busy the IRS is these days, that is probably
true. If you owe more tax, the 1040X lets you make a clean
breast of it. If you paid too much, you'll get a refund. There
are only three parts to the 1040X, and Part III inexplicably is
devoted entirely to letting you change your mind about whether
you want $1 of your taxes to go to the Presidential Election
Campaign Fund.

    --Don't give up. The apparatus is in place, even if it's
a little creaky, to try to deal with your problem in a civilized
way.

    -- Don't even think about inviting Glynda Hankins to
lunch. She is very, very busy.