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Why We All Hate the IRS

January 9, 2010

In an outrageous story out of Seattle, single mother Rachel Porcaro was audited for not making enough money. She works at a hair salon and made $18,992 at $10/hr. The all-knowing IRS decided that based on their spreadsheet of incomes in the Seattle area, she could not “make it” on less than $36,000. So – they launched an aggressive and punitive audit.

Living at home with her parents and two children, she does not use welfare, food stamps or other public assistance, saying “We’re an Italian family. We’re surviving as a tribe. It seems like we got punished for that.”

Seriously. Not only did the audit drag out over a year, her parents were also audited. The IRS said that she could not claim the Earned Income Tax Credit because she lived in her parent’s home (paying monthly rent, btw). Therefore, she owed the government $16,000 for 2006 and 2007 – almost a year’s salary. Of course she could not pay it. Her father, a small business owner, asked his accountant for help. The accountant quickly determined the IRS was wrong in how it was interpreting the tax laws. He sent in the necessary code citations and hoped that would be the end of it.

Instead, the IRS responded by launching an audit of Rachel’s parents. According to the Seattle Times,

Rob and his wife, Patty, had to send in house blueprints, bank statements, old utility bills. Rachel was asked to prove her children were hers, as well as document the money she’d spent on her children’s clothes, health care and so on.

In the end – after TEN THOUSAND dollars in accounting fees, her parents were cleared and the IRS backed off their claims about the EI credit. But – they insisted she could not PROVE she was supporting her children because she did not have enough receipts, so she had to stop claiming them as dependents. She recently paid the IRS $1438 plus penalties and interest. Her children are in “tax limbo“. She can not claim them as dependents, nor can her parents.

The accountant said that that it is well-known that the system targets the weak – people with sloppy returns, for example. “It’s the way a wolf goes after the weakest sheep”, he said.

Today, there are no words to describe my loathing of bloated government agencies who love to bully people simply because they can.

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