Tax Change of $419,000

Spokane Audit Department is SAD.

SAD is my moniker for the IRS Audit Department of Spokane. There are many reasons for SAD to be sad in this Year 2019. The biggest reason is the subject of this paper.

I have been dealing with IRS Audits since 1967, which was my second year in Public Accounting. George Peterson, CPA assigned me to help him with the audit of a large chicken farm which we settled for a “No Change” finding.

Back then it was not an usual thing for the IRS to find “No Changes” on an audit but I have had more than 54% of my audits in the 20th Century classified as “No Change”. It has been quite different since 2001.

In 1998 Congress banned the Taxpayer Compliance Measurement Program (TCMP) Audits because they were too intrusive, too tough, and just unfair for audits that were used to gather “Big Data” to design the IRS Audit Programs.

The IRS has a modern reputation of poor work and inefficiency but they have been, and still are, masters of managing BIG DATA. So, when Congress stopped them from using TCMP tactics, they waited 5 years and came up with the current program of IDR Audits. See my blog “Infected Diseased Rats.”

IDR Audits are now used on (We think) 100% of all audits done by IRS Field Auditors in America. IDR Audits are WORSE than TCMP Audits because they ask many more questions and demand copies of books and records beyond 100% of deductions.

Modern day Tweedle Dee and Tweedle Dum

Who is SMARTER ? IRS or the U S Congress? Considering recent events that is maybe a Question of “Tweedle Dee or Tweedle Dum?” In any case, Congress has been fooled by the IRS Field Audit Department.

IDRs were used by SAD to audit Ken and Kay’s Construction and Real Estate partnerships Forms 1065 and their personal Form 1040. That group of audits covered 5 returns from 2015 and 2016 (2 each year) and one return for 2017.

The original audit findings by SAD had taxes due of over $434,000. Last Monday, November 25, 2019 we settled for about $15,000. No wonder SAD is sad – That is a reduction of $419,000 which is the largest change in tax that I have ever made in an IRS Appeal.

Those changes were the results of hard work by me; Trent Snider, CPA; David Rosselet, staff accountant; Anne Avery, staff accountant; and Robert Kovacevich, Attorney.

There was a huge amount of work done by the clients, “Ken and Kay” (Not their real names), to survive a series of audits which would have ruined that young couple’s life if the original $434K  assessment had been allowed to stand.

This paper reads like “Bleeding Heart Fiction” and/or an ATTACK on SAD and in effect, the entire Internal Revenue Service. That is not TRUE. I have a long track record with the IRS and I have friendly relationships with IRS Personnel including Auditors, Supervisors, Collections Officers, Appeals Officers and others.

There are some IRS folks that I have clashed with that I have reported on their bad faith tactics and spoken and written falsehoods in my books and Blogs. Read my book Chickensh*t for more details.

As far as what is reported here, everything in this paper is the Truth, the Whole Truth, and nothing but the Truth, so help me God.

Spokane, Washington November 28, 2019

Anson Avery, CPA

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