Tuesday, June 1, 2010

Me 1, IRS 0

I have been fighting with the IRS for some time now, over our First-Time Home Buyer's Tax Credit. For those of you who have been living under a rock for the last year and a half or so, Uncle Obama has been giving out a substantial tax credit for those folks who have recently purchased their first house, or haven't owned a house in a while and just purchased another one.

Now, those long-time readers of my blog might remember when we bought our house. Oh, about LAST AUGUST!

When we bought our house, we took the money out of our savings for the down payment, thinking we'd get it back in the tax credit. So, we filed a 1040X in early October, 2009 to amend our 2008 taxes and applied for the credit. A fairly normal procedure at that point in time...I even found instructions on realtor.com on how to fill out the 1040x and the one-page tax credit form.

Since there were a lot of folks taking advantage of the credit, the IRS said to wait at least 8-12 weeks for the paperwork to process. Okey-dokey, we should hear something by mid-January. The holidays ensued, and the allotted time came and went with no news.

I called the IRS around the first of February, to see what I could find out. To my great surprise, I got to speak to an actual person, who spoke fluent English, and was very friendly. Not something I expected from the IRS, certainly. She confirmed that they indeed received our paperwork, and further had sent us a letter in early January asking for more information before they could process the return. I replied that I had not received a letter, and asked where they had sent it. Sure enough, they sent it to the address of the house we used to rent. This was a problem.

While we lived in the rental house, all our important mail went to a locked box at a UPS Store. I did not want to have to change our address with everyone if/when we moved. So, when we DID move, I did not think to file a change of address. I also did not remember that the IRS does NOT want a mailing address on your tax filings, they want an actual physical address. So, when they sent the letter asking for more info, it went to the address on file with the IRS, the old house which no one lived at anymore. Needless to say, the letter has still never made it to us.

Now, those of you paying close attention might at this point notice the same flaw in logic I pointed out to the nice IRS lady. If I filed an amended return for the first-time home buyer credit, wouldn't that automatically mean I HAD A NEW ADDRESS?!? I even put the new address on all the forms I had to fill out! IRS lady agreed with me, and admitted that whoever entered the information into their system should have checked the address they had on file for me against the address on the form. However, she said, and I quote, "It depends on who entered the information and how diligently they do their job as to whether that gets done or not." Now that's the IRS I expected, the ones just wandering through their day with no regard to what happens as a result of them doing/not doing their jobs. I was surprised that one of their own would actually verbally admit to what I had always suspected but had no way to prove!

So, I asked the next obvious question. What additional information were they looking for? This time I got a much more governmental-like answer. IRS lady could not see the contents of the letter from her screen. She did not have access to see such things. Whew! My faith in the red-tape-laden bureaucracy was restored.

IRS lady said the best she could do for me was to "fix" my address in their database and make sure that a copy of the original letter was sent to the new address. I guess that's better than nothing. She then told me it could be up to two weeks before I saw the letter, but if I had not seen it by then to call back. Okey-dokey.

About two weeks later, an 8.5x11 white envelope from the IRS showed up in the mailbox. Great, now we'll finally unravel the mystery of the missing information from that simple one-page form. Well, not exactly...this was a letter saying that the IRS had disallowed the amended return for...wait for it...our LACK OF RESPONSE TO THEIR REQUEST FOR MORE INFORMATION! Classic. Our government hard at work, with one hand not talking to the other.

According to the letter, I had thirty days to dispute the disallowment and have the matter reviewed by a tax examiner. They also included a rather involved set of instructions on how to file the dispute and what other paperwork to include. I spent the better part of a day first understanding the procedure, and then gathering all the paperwork and writing the dispute letter. I faxed that to the IRS, made a PDF copy of everything for myself (CYA), and sat back to wait the two weeks I was told I must wait before calling the IRS to make sure the paperwork had been properly entered into their system.

Two weeks go by and it is now early March. I called and verified they had indeed received the dispute and were working diligently on it. Another IRS lady told me that they have, by law, up to thirty days to respond to my dispute and I should receive a call or a letter by then. More waiting.

Towards the end of March, I received two copies, in two separate envelopes mind you, of a letter saying they are working on my case but they will need until April 19th to respond to me. At this point, I am not surprised at the delay. Annoyed, yes...but not surprised.

Just before April 19th, I received two more letters, again in two separate envelopes, saying that they are indeed sorry but they must delay again until May 19th. At this point, my patience is wearing dangerously thin. However, I know if I call and annoy them, they will drag this out even longer. They are the government...they don't care; they don't have to. I do resolve to ESM that this has now become a matter of pride, and I WILL outlast these buggers and get my money, even if it is the last...thing...I...ever...do!

May 19th comes and goes. No letters in duplicate. No calls. No nothing. Hmmmm. So, on the 26th, I called the IRS once again. Again, I spoke to a lady who was very courteous, but a bit more abrupt than the last several. After she verified my identity, I explained my story in the Reader's Digest abridged form once again. I heard the keyboard in the background begin clicking furiously and she came back and said, "Yes sir, I see we have approved your amended return on the 24th and you should be receiving your tax credit check within two to four weeks." HUH?!? No further delays? No more red-tape forms? What happened to the information you allegedly needed back in January? I waited all this time for "oops, sorry"?!? Showing good sense, despite being taken aback by this sudden, positive turn of events, I did not ask any of those questions and simply thanked her for her time and hung up. I then broke out the happy dance! A little premature, I know...but I could not help myself! At last, forward progress! *grin*

So, today I go to our mailbox and find a hand-addressed envelope from the IRS containing a letter outlining the same information I got from my last phone call. And another envelope with A CHECK!!! YAY!!! Even better, the check contains the credit amount, plus back interest from when I filed the amended return back in October! So, even though it took nine months to get this sorted out, at least I got an extra 5% to show for it. Now I understand why the check got here so quick. They figured out how much interest they owed me and did not want to have to pay a penny more!

After having worked in government as long as I have, and after having lived through this incident, I have a few words of wisdom to pass along when dealing with governmental entities. As always, YMMV, so don't blame me if these don't work out so well for you.

One, read and listen carefully and follow all instructions to the letter. That takes away their ability to use that as an excuse and they can't really give you a hard time for following their rules. Two, patience-patience-patience. It will probably take longer than you expect, but they should eventually find their butts with both hands. Three, it doesn't generally pay to get irate with them. They can easily make your life much more difficult, and generally without any repercussions to them.

Following those simple tips brought this saga to a successful conclusion for me. Hopefully you won't ever have to use them, but if you do I hope they help you in some small way.

-- Sundown, Out.

1 comment:

  1. Has it been a MONTH since I've swung over here???? Geeze, I think this is the time flies syndrome!

    Ah, well, belated congratulations for beating the bureaucracy!!


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