OK, so my job is to go to parties, interview celebrities, and travel to cool places. Fun, right?
Right. Except for one thing. I’m a target for the taxman.
My legitimate business expenses look like a day in the life of Paris Hilton, and the Department of Revenue and IRS have normal ranges for things like dining out and going to cocktail parties in, say, Martha’s Vineyard. I fall far outside the norm, so blam! They keep crawling up my ass.
Recently, the Mass. Dept of Revenue sent me a notification of an audit on my returns for 2008 and 2009, zeroing in on Section Y (which mostly pertains to travel expenses, car, etc.). This happened to me a few years ago with the IRS, and it was an astronomical pain in the nether regions, not to mention a tremendous time-suck. I had to organize receipts (which I squirrel away like someone on My Strange Addiction), correlate them with my calendar and tear sheets of magazine stories I’d written, along with letters from my employer and Lord knows what else. In short, it was less fun and more time-consuming than studying for my Bar Mitzvah. But I did it. My accountant appeared before the IRS tribunal. They even admitted that I was right. And then they said I still had to pay a boatload of money, PLUS my accountant sent me a hefty bill.
Needless to say, my latest correspondence from the state was unwelcome. I sent a copy to my accountant, who emailed back that whatever I decided to do, I needed to call them the very next day. Their 20-day response time was past, and 20 days is apparently sufficient to respond to anything, even if you’re busy traveling (to places like Croatia and Maine and Long Island and even a cocktail party or two on Martha’s Vineyard).
When I phoned my auditor, Deborah, she was extremely pleasant. She listened to me whine about how unfair it was that just because of my job I got singled out so odiously. She even commiserated with me and made the heartfelt (if laughable) suggestion that I write a letter to the powers that be. When we got down to brass tacks, she told me how much money they were questioning—a sum I certainly have better use for but one that’s probably less than what I’d have to pay my accountant to fight it, let alone the aggravation of doing the deadeningly tedious crafts project they require to document every single expense. So I decided to just pay.
The problem with this approach, as my accountant pointed out, was that the DOR may tip off the IRS, whom, if they question the same tax returns, would be coming after a much larger chunk of money. One that I really don’t have.
But sometimes, you take your chances, and I’m sure it’ll make a huge dent in balancing the budget.
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One Comment
You probably should have fought this for the exact reason you state, which is your concern that your state tax capitulation will cascade into a Federal tax issue. What is truly amazing, though, are the stipulations in their lettter to you that declare that everything should be on 8.5 x 11 inch paper and that only Human Resources or the President of your company can tell them what the expense reimbursement policy is. In any event, whatever else you do, “Please do not use staples.”