I knew the letter from the IRS sitting in my mailbox was bad news just from the color of the paper.
It was not light green, the color of a refund check from the United States Treasury. Instead, it was white, warning that it contained some sort of demand, audit notice, or threatened legal action.
In fact, it was far worse than that.
In the most stilted, bureaucratic language possible, I was informed that my $100,000 tax refund for 2017 had already been paid out to someone else.
Another party using my name and Social Security number, but a different address, had already filed a 2017 return for me.
In order to get my money back I would have to file a new return and include hard copies of every single piece of supporting documentation. It was, in effect, a full paper audit. Then I would have to wait 60 days.
This was 3 months ago.
I informed my accountant immediately. I heard him shout across the room to his partner, “Hey Joe, I’ve got another one.”
He said that half of his clients had had their refund checks stolen this year, and, as a result, the IRS was now demanding automatic audits on all refund requests into four figures or more.
It gets worse. Budget cuts at the despised government agency mean that huge delays are occurring in almost all interactions. Even routine requests can sit on a bureaucrat’s desk for two years. The number of standard audits has fallen substantially.
The ones that take place are just a quick pass over, often conducted by mail, rather than the in-person, full proctologic examinations of the past.
Furthermore, the government didn’t have the money to pay for the latest upgrade of QuickBooks Pro.
This means it is unable to use the online accounting service’s spreadsheets during audits when the taxpayer’s accountant has upgraded, greatly increasing the time required for each audit while decreasing its effectiveness.
As a result, QuickBooks is seeing the fastest and most widespread adoption of its latest software version in history.