They say that every dark cloud has a silver lining, and after watching the big shots at the IRS testifying before Congress yesterday, I’m starting to believe it.
As a small business owner I live in fear and trembling of only one thing, an IRS audit. I pay my taxes, file my returns on time, and pay my accountant lots of money to make sure it’s done right. So on paper, I have nothing to fear. Yet, I still fear the IRS for one simple reason; they have the power to destroy me, and my ability to fight back is extremely limited. Despite the best efforts of my highly paid accountant, the chances that I am in full and complete compliance with our 74,000 page tax code are slim if not impossible. Eventually, my number will come up, and I will be hauled in front of the most powerful agency of the federal government where I will be considered guilty until I prove my innocence.
But, after watching the three stooges yesterday, Douglas Shulman, Lois Lerner, and J. Russell George, I have been greatly relieved. Using their testimony as a guide, I now have much less reason to fear an audit. I have taken extensive notes from their testimonies and if I’m ever audited, I’ll know exactly what to say. It might go something like this:
Soulless IRS Apparatchik: Mr. Dunnevant, do you know why you’ve been asked to appear here today?
Me: Yes, I believe that you guys want to audit my 2010 tax return.
Soulless IRS Apparatchik: Actually we already have. It’s actually quite impressive, 24 pages long, all the appropriate schedules attached. Unfortunately, you neglected to properly account for the carried interest multiplier on your accelerated depreciation form for the month of February, and I’m afraid that will prove to be an extremely costly mistake.
Me: Well, let me be the first to publically apologize to the IRS for my accountant’s error. I am truly sorry.
Soulless IRS Apparatchik: I’m afraid you can’t simply blame this on your accountant. How do we know that this wasn’t your idea to avoid paying your fair share, and not some accounting error?
Me: Well, there’s no way you’ll ever know, because…I can’t recall. Again, sorry about that.
Soulless IRS Apparatchik: Wait a minute, according to our records, you met with your accountant no less than 13 times in the months leading up to the filing deadline. Do you expect me to believe that in all those meetings this issue never came up?
Me: Look, just because I met with Carl 13 times doesn’t mean we talked about taxes.
Soulless IRS Apparatchik: What DID you talk about…with an accountant…who does your taxes??
Me: Mostly just about every day stuff, how are the wife and kids, the weather, the Red Sox bull pen…
Soulless IRS Apparatchik: Mr. Dunnevant, I find that very hard to believe.
Me: I know, right?!
Soulless IRS Apparatchik: Mr. Dunnevant, defrauding the United States Treasury is a very serious offense.
Me: And I am really, really bummed about it, so once again…I’m sorry.
Soulless IRS Apparatchik: I’m afraid that an apology isn’t good enough, we will need more information.
Me: Well, you’re not gonna get it, because I can’t remember anything, and even though I didn’t do anything wrong or break any laws, I’m afraid I’m gonna have to invoke my 5th amendment right against self-incrimination and respectfully decline to answer any of your questions.
Soulless IRS Apparatchik: In that case, I have no choice but to drop the audit against you. You are free to go.