Wednesday, February 3, 2010

Update on the audit

I went to the Post Office yesterday to mail off the documentation requested by NYS Tax Department "Audit Group 3" telephone representative.

Basically, she said that I all I needed to do was to explain that we'd declined to claim our older daughter on the federal form in order to allow her to get the education credit and to provide the name and Social Security number of our daughter, so the tax department could look up her tax return and see that she hadn't claimed her own exemption on her return. (Why the NY tax form didn't give any opportunity to provide this information right on the original tax return in the first place is not clear. The federal Form 1040 requires listing the names and SSNs of all dependents claimed on the return, but the NY tax return did not and still does not provide any place to do that.)

It's also unclear to me why the Audit Group 3 phone representative could not just take that minimal information directly over the phone from me, especially since the wording of the audit notice letter had suggested it was possible for taxpayers to resolve matters over the phone, and this matter does look extremely straightforward.

(It's possible that their idea of "resolving matters over the phone" means getting the taxpayer to agree that the NYS Tax and Finance Department is correct and pay the assessed amount by credit card over the phone! Perhaps the only people who need to respond by mail are those who don't agree with the bill enclosed with the audit notice. It's likely that they hope many taxpayers will take the path of least resistance and just surrender and concede the bill, even if it's not correct. The National Taxpayer Advocate's reports have pointed out that many low income taxpayers--who are far more likely to be audited than the average American--do exactly that.) I trotted to the Post Office to mail off the form with an attached letter of explanation providing the information required. I sent it Certified Mail ($3.24) and set up email notification, so I'll know when it arrived. There's a good chance it will arrive today (2/3/2010), which is somewhat strange to contemplate, since the audit notice letter itself was dated 2/4/2010.

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