Ludwig von Mises Institute
Israel at the UN
Cascade Policy Institute
Voluntary Trade Council
Dr. George Reisman
Mises Economics Blog
The Angry Economist
Civilian Gun Self-Defense
In The Pipeline
Fall of the State
Voluntary Trade Blog
Free Money Finance
Neo's Nest Egg
It's Good to Doublecheck
I don't do my own taxes. It wouldn't be good for my health. I'm perfectly happy to take my stack of papers to a smiling accountant who for a small fee will relieve me of this burden.
But it's good to doublecheck them. I think I just saved myself from an audit.
When I picked up my taxes I was all smiles at seeing a substantial tax refund due to me, instead of my expectation of a near wash (federal refund offset by what I would owe to the state). I almost mailed in my returns immediately, but a fortuitous telephone call and subsequent shopping trip pulled me away from my taxes until later in the evening.
At that time, I decided to browse through my returns and see what was responsible for my large refund. I reached my Schedule D and immediately saw a problem. I had no long-term capital gains. Impossible, I thought, because I had sold two lots from my employee stock purchase plan that I knew resulted in such gains.
As much as I detest knowing anything about taxes, in this instance I think my meager knowledge saved me from an audit. The IRS would know about those sales, but they weren't on my tax returns! <gulp> As repellent as it is to waste my mental capacity with information about taxes, I think an audit would be even more horrible.
So, what happened? How could my preparer get this wrong? I learned the answer when I returned my returns and explained the problem.
There's no scandal here — the error was almost trivial. It was a photocopying mistake. The particular 1099 that described these stock sales was printed on both sides, but only the front side had been photocopied by the tax preparation staff. And they worked from their copies, not from the originals (which were also in their possession). The information about these sales was, of course, on the back side.
They're fixing the glitch.
This is the sort of event that makes me stop and wonder. Professionally, I'm accustomed to seeing systems fail for subtle and complex reasons. I vacillate between thinking how remarkably robust microprocessors are as compared to other systems, and worrying that it only takes one mistake in some mundane detail to make them fail.
But making photocopies? Give me a break. That shouldn't go wrong.