my personal irs odyssey - part four

a quick recap ... and yeah i got audited (can you feel the cpa smirking?)

nothing puts fear in the hearts of men like the dreaded irs audit.

we’ll get to that in a moment, but first, a quick review of what i’ve shared so far.

for four separate tax years, 2019 - 2022, i submitted paper returns where i stated my “wages” were $0. and you probably felt a sinking sensation in the pit of your stomach at the thought that I was throwing away my freedom, my life, my children’s inheritance … and you questioned my sanity.

but you hung in there with me and i showed you how my “wages” were zero because, per the definition of “wages” in section 3401(a), it’s clear that “wages” are strictly the remuneration paid by an "employer" to an "employee" and because i’m not an “employee”

3401(c) "employee"

"For purposes of this chapter, the term "employee" includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term "employee" also includes an officer of a corporation."

then I don’t have “wages.”

well, the organization i provided my labor to incorrectly labeled my remuneration for said labor as “wages,” so i simply rebutted the allegation on the specific form provided for such purpose.

of course, the diligent bureaucrats can’t have us uppity tax slaves not paying our tithes to the criminals so they threw a slurry of threatening letters and notices at me, which i basically ignored while gleefully taunting said bureaucrats.

for full disclosure here is a listing of the notices and letters we have encountered so far as educated filers:

• letter 12c

  • received for 2019, 2020, 2021 & 2022

• letter 3176c

  • received for 2019 & 2020

• letter 3175c

  • received for 2020

• letter 105c

  • received for 2019

• letter 525

  • received for 2020

  • this is the topic of the remainder of this post

• notice cp15

  • received for 2019 & 2020

  • $5000 penalty charge [666] times two (one for each of us) for both years

• notice cp22a

  • received for 2019

  • not shown as it simply reverses one of the three original $5000 penalty charges on notice cp15

• notice cp39

  • received for 2020

  • not shown but says, “we applied the $5,000.00 overpayment from your 2021 tax return to the amount owed on the tax return you filed in 2020”

  • which means they stole from my 2021 return in order to settle one of their fictitious penalty charges for 2020

• notice cp49

  • received for 2021 & 2022

  • not shown but the one for 2021 is same as cp39 but from the tax year 2021 perspective, which shows my return being reduced by $5000

  • the one for 2022 shows my return being reduced to settle some of their fictitious penalty charges for 2019 but with no corresponding notice cp39 for 2019

• notice cp42

  • received for 2021

  • not shown but basically the same as notice cp49, which shows my return being reduced by another $5000

  • which means they’ve taken a total of $10,000 from my 2021 return to pay both the $5000 penalty charges for 2020

• notice cp21b

  • received for 2020

  • i’ll share this one below

• notice cp12

  • received for 2022

  • i’ll share this one and our reply in a later post

and now, on to the audit! here’s that letter 525:

they’re auditing my federal income tax return. oh no!

so now what? well, the instructions seem pretty simple: review, respond.

okay, let’s see what they need me to review: forms 4549 and 886-a with attachments.

the first is form 4549 where they propose to “correct” my form 1040 and then asses a penalty for my “lack of accuracy” and charge me interest on top:

yikes! instead of owing me the erroneously withheld amount of $23,354, now they claim we owe them an additional $32,309!

we’ll of course cover all the details but the most important thing to note about this form is:

the next enclosure we need to review is form 886-a “explanation of items” with attachments describing the penalty and interest charges that we saw above:

the most important page in the entire mailing:

the criminals are grumpy because i insist they give me back every penny of what was erroneously withheld from me.

first they tried with letter 12c to get me to incorporate the allegations on form w-2, so when i refused they did it for me. that’s the $94,307 shown under “wages” for item 1.b.

then another institution reported allegations of taxable interest on a form 1099-int that I was unaware of so failed to rebut. that’s the $54 shown for item 1.a.

the $13,419 is what they are alleging as the amount they potentially owe me, but is currently frozen. as that isn’t what I reported on my return, the amount withheld of $23,354, you may be wondering where they got that number. here’s the form cp21b that fails to explain why that amount is different from my return:

if you do not agree you need to respond. they really want you to call so they can lose the evidence you replied. nice try. i only reply by certified mail, return-receipt, so i have proof these criminals received my response:

okay, as we’re reaching the “email length limit” the saga of our first audit continues in part five.