Posted on 12/06/2009 12:48:00 PM PST by Publius
Rachel Porcaro knows she's hardly rich. When you're a single mom making 10 bucks an hour, you don't need government experts to tell you how broke you are.
But that's what happened. The government not only told Porcaro she was poor. They said she was too poor to make it in Seattle.
It all started a year ago, when Porcaro, a 32-year-old mom with two boys, was summoned to the Seattle office of the Internal Revenue Service (IRS). She had been flagged for an audit.
She couldn't believe it. She made $18,992 the previous year cutting hair at Supercuts. A few hundred of that she spent to have her taxes prepared by H&R Block.
"I asked the IRS lady straight upfront — 'I don't have anything, why are you auditing me?' " Porcaro recalled. "I said, 'Why me, when I don't own a home, a business, a car?' "
The answer stunned both Porcaro and the private tax specialist her dad had gotten to help her.
"They showed us a spreadsheet of incomes in the Seattle area," says Dante Driver, an accountant at Seattle's G.A. Michael and Co. "The auditor said, 'You made eighteen thousand, and our data show a family of three needs at least thirty-six thousand to get by in Seattle."
"They thought she must have unreported income. That she was hiding something. Basically they were auditing her for not making enough money."
(Excerpt) Read more at seattletimes.nwsource.com ...
You sound like a generous tipper. ;)
What on earth?
H&R Block only charged me $80.00 to do mine. Either she had very complicated taxes or something else major has been left out.
I did tell the IRS agent that I spoke to in November that I wanted the “Timothy Geitner payment plan”. No go for me. I get penalties and interest.
The proverbial foxes guarding the chicken coup. Which brings up yet another problem we have.
We have to find a way, some how, to force the lamestream media, CBS, ABC, NBC to start reporting on the NEWS, even when it doesn’t suit their leftist agenda. Half of this country (the conservative/Christian half) is 100% against mandatory, government run healthcare, against cap & trade, and against the leftist takeover of banks, the auto industry and everything else they’re trying to do. They’re not even reporting on the latest scandal, Climategate.
We HAVE to find a way to make them either start reporting the inconvenient truth/news, or make they pay for not doing so.
You ALWAYS have to file, even if it’s a 1040 ez. When I was in college, and not making any money, all I had to say was “I didn’t make any money last year and I didn’t make any money this year and I don’t expect to make any money next year.” Even if your income is $0 you have to declare it.
>You ALWAYS have to file, even if it’s a 1040 ez.<
Wrong. From irs.gov
You must file a tax return if your income is above a certain level. The amount varies depending on filing status, age and the type of income you receive.
For example, a married couple both under age 65 generally is not required to file until their joint income reaches $17,900. However, self-employed individuals generally must file a tax return if their net income from self employment was at least $400.
Check the “Individuals” section of the IRS Web site at IRS.gov or consult the instructions for form 1040, 1040A, or 1040EZ for specific details that may affect your need to file a tax return with IRS this year.
Even if you don’t have to file, here are six reasons why you may want to file:
Federal Income Tax Withheld. If you are not required to file, you should file to get money back if Federal Income Tax was withheld from your pay, if you made estimated tax payments, or had a prior year overpayment applied to this year’s tax.
Recovery Rebate Credit. If you did not qualify or did not receive the maximum amount for the 2008 Economic Stimulus Payment, you may be entitled to a Recovery Rebate Credit when you file your 2008 tax return.
Earned Income Tax Credit. You may qualify for the Earned Income Tax Credit, or EITC, if you worked, but did not earn a lot of money. EITC is a refundable tax credit meaning you could qualify for a tax refund.
Additional Child Tax Credit. This credit may be available to you if you have at least one qualifying child and you did not get the full amount of the Child Tax Credit.
First time Homebuyer Credit. If you bought a main home after April 8, 2008, and before July 1, 2009 and did not own a main home during the prior 3 years, you may be able to take this refundable credit.
Health Coverage Tax Credit. Certain individuals, who are receiving certain Trade Adjustment Assistance, Alternative Trade Adjustment Assistance, or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a Health Coverage Tax Credit when you file your 2008 tax return.
My point was, a less than energetic couple I know, ARE on food stamps, getting $400 a month worth, and still whinning and complaining.
I live modestly and spend about $200 a month on food, for 2 people, and yet I feel I eat pretty well. Working hard AND doing the hard work of shopping sales.
What I was trying to get at is an agreement with you. If I had $200 extra a month, OF SOMEONE ELSES MONEY, I could eat steak and lobster.
I'm proud of how I shop, and the deals I find and take advantage of. I eat well, but for modest costs. What I eat, I earn. I feel richly blessed by God. And because I feel these blessings come from God, I am truely thankful for all I have, even if it is modest.
I can afford if I wanted to, to eat strip steaks every once in awhile.
I am happy and content with what I have to eat, and the work I do to earn that food, and the work to make my money go farther. I am angered by lazy people, both physically and mentally, who LIVE OFF other peoples hard work. Who live above and beyond the means that those who have provided for them do. And yet still they complain.
Pretty much I'm angry with welfare recipiants who feel entitled to welfare, and yet complain for more. Those eating steak and lobster, on the dollars of those eating roasts and hamburger.
They did this crap to my dad one year. He was in a bad accident and didn’t work for 6 months. He’s a consultant. He and my mom were fine with money...they had a savings and insurance, but the very next year they came after him.
Well, it was out of character, since we don't often have relatives die, but it wasn't questionable...we took photos of everything - nearly everything in the house and took it over in truckloads...we just made the mistake of not itemizing everything or every load.
"It would have been better not to have tried to take the deduction for donating your relative's stuff to charity."
Well, that's your opinion, but the charitable deduction exists for the purpose of encouraging acts of charity...the government shouldn't then penalize you for it.
I’ve since learned that large charitable donations such as these always get the 5th degree, so it’s best to get your receipts in order, and if you don’t have any, take a smaller amount on a deduction than you actually gave away...it’s just not worth the audit.
The IRS is what our founding fathers conceived a revolution for.
I had a woman who does household sales for a living handle the emptying of my Dad’s house. Whatever didn’t sell was donated. We were given a detailed list of what was donated, including the sale lady’s assessment of value. We gave it to the accountant handling the final estate income tax return. Everything I claim personally is itemized, with modest value claimed, and a receipt from the charitable organization. I hope we’re covered. Thanks for your comments.
I was simply raised that “that’s what you do” and I suspect a lot of others were too. You pay a pro to do it unless you could be that pro, same as you pay a professional mechanic for complex repairs to your car, or an electrician for anything more complex than swapping out a worn out light switch.
Add to that being pretty terrible at math, you better believe I’m not doing my taxes myself, even with easy finances and not a lot of money. It’s protection money!
Sometimes the federal attorneys have more horse sense than a whole IRS office.
Modern tax preparation software has greatly eased the filing process for the average citizen with seriously tax-affecting personal circumstances. The math isn’t the issue in most cases anyhow. It’s forgetting to put something down, or to put it down in the right place. Tax filing software also is not very good at reminding the taxpayer about items that are more likely to be challenged by the IRS and what kind of proof would likely be required in an audit.
Sorry, not buying it. I know lots of people with no income. They don’t file. People with Social Security income who don’t file, too. This is not my field, but all those people cannot be breaking the law. There must be a minimum income level for filing a tax return.
We need to out these people from the IRS...Put their names out and show up and freep them..a web sit would be nice...
The business I work for went through a similar issue a few years ago. We were audited by our local IRS office when the amount of excise taxes deposited was found to be under what the gov’t thought a business our size should be generating. It took a year to conclude and no adjustments were needed. Fortunately, I was able to handle it without attorneys and accountants...
It sounds like you have it covered and a good way for you to get help doing the work. I bet that kind of sale does much better than a garage sale. You are well documented for estate needs too.
I think you received and shared good advice. Thanks.
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