July 10, 2003
by Chris Feeney
What if we all ran our businesses like the tax collectors? I know I risk an automatic audit when I say bad words about the IRS or the Missouri Department of Revenue (DOR) but I simply cannot help myself. Imagine being able to send out bills to your customers when they don't even owe you anything. Hide that fact behind a bunch of legalese and mumbo-jumbo that only a handful of professionals can decipher and then top it off with an arbitrary set of deadlines, penalties and interest schedules and you have a sure-fire moneymaker. Top it off with the ability to turn a person's life upside down via an audit, which is the equivalent of having mob muscle threatening to break both your legs if you don't pay.
Maybe I'm overreacting but it's irritating to waste a couple hours of your day trying to understand why the DOR says you owe it money when every piece of evidence you have (most of which they sent you attached to the stupid notice) says you don't owe them squat.
Okay so $76.51 is not that big a deal. I probably should have just sent the check in and not bothered trying to interpret the three page Notice of Proposed Changes to my 2002 tax return. Instead I made the mistake of trying to actually understand why the government was needing more of my money. Maybe it was the fact that I believe that I gave them more than their fair share already. Perhaps it was the feeling like these guys were trying to sell me lightning rods or driveway repairs but it sure seemed like a scam to me the way this whole thing read.
The first red flag flew in the opening paragraph. Well it started there when the letter advised me to review the proposed changes on page 2 and the "Detailed" Explanation of Proposed Changes on Page 3. The detailed explanation turned out to be one sentence that told me the amount reported as amount due on your return will be changed to…
The problem was that the new amount due was $1 less the amount I had paid. So at least by the way I was reading this statement, they owed me a $1 refund. Instead, I was getting a $73 penalty plus $0.91 of interest and another $3.60 of "Additions to taxes".
Somehow that one line "detailed" explanation didn't help me decipher this accounting equation. No matter how I read it I couldn't make this notice read any different. Somehow or other the DOR was penalizing me for paying $1 too much. Now if someone gives me too much money when they buy a newspaper I return their change. Just imagine if I could demand $73 from you if you didn't have exact change to pay for your paper. If that's not enough for your profit margin, wouldn't it be nice to be able to simply be able to add more cost to the purchase price of our merchandise? Lets just tack on another $3.60 of additional tax. I guess if it looks official enough no one will ask what its for and we can further expand the profit margin on this deal. Finally there's the interest. As we all know thanks to the stupid commercials that a buck doesn't by much anymore besides a 20-minute phone call, so the 91-cents isn't the issue. What makes me mad is that I was charged for interest during the two months that it took the DOR to determine that I owed them this mysterious penalty. So for two months before I even knew what was going on, I was being charged interest. Now I don't have a problem with a business charging interest on unpaid balances. But you at least send me a bill every month or so to give me a chance to pay what I owe before you start charging me interest on what I don't even know that I owe.
My frustration was just beginning. The second and third paragraph tell me that if I disagree with the "detailed" explanation I can send in a written argument including copies of any information I want considered. Why should it be my responsibility to correct their mistake? Besides the only information I have to argue my point is the three sheets of mail they sent me and I doubt even their own employees can learn much from the "detailed" explanation.
At least that was the opinion I formed after 20 minutes on hold when I finally was able to speak to a DOR representative in Jefferson City. (I should have used that 10-10-220 telephone number from the commercials so my long distance call would have only cost me $1 more since these guys don't even have a toll free number.) Another 10 minutes talking to this representative and I was starting to believe that one sentence explanation was more informative than the half hour that I had wasted on the phone.
So ultimately I called my tax consultant and she told me that her firm had received numerous calls from clients regarding similar problems with Notices of Proposed Changes. The majority of them were incorrect so until I get a little more information I'm going to hang on to my $76.51.