IRS audits woman for being poor.

[thinkliberty]

...It all started a year ago, when Porcaro, a 32-year-old mom with two boys, was summoned to the Seattle office of the Internal Revenue Service (IRS). She had been flagged for an audit.

She couldn't believe it. She made $18,992 the previous year cutting hair at Supercuts. A few hundred of that she spent to have her taxes prepared by H&R Block.

"I asked the IRS lady straight upfront — 'I don't have anything, why are you auditing me?' " Porcaro recalled. "I said, 'Why me, when I don't own a home, a business, a car?' "

The answer stunned both Porcaro and the private tax specialist her dad had gotten to help her.

"They showed us a spreadsheet of incomes in the Seattle area," says Dante Driver, an accountant at Seattle's G.A. Michael and Co. "The auditor said, 'You made eighteen thousand, and our data show a family of three needs at least thirty-six thousand to get by in Seattle."

"They thought she must have unreported income. That she was hiding something. Basically they were auditing her for not making enough money."

...

"I was floored," says Rob Porcaro, 59. "I get audited now and then in my business, so I've been through it before. But to have them go after me because of my daughter, well, I've never heard of anything like it."

Rob and his wife, Patty, had to send in house blueprints, bank statements, old utility bills. Rachel was asked to prove her children were hers, as well as document the money she'd spent on her children's clothes, health care and so on.

They racked up $10,000 in accountant bills — $8,000 of which Driver is trying to recover from the IRS.

In the end, the parents were cleared. The IRS also backed off trying to reclaim Rachel's earned income tax credit.

But the agency insisted Rachel couldn't prove she was supporting her children — she didn't have enough receipts — so she had to stop claiming them as dependents. A few weeks ago she paid back $1,438 (plus penalties and interest!) on that issue.

Way to go, IRS. You did an investigation likely costing tens of thousands of dollars (counting both sides). To squeeze a grand out of a single mom who did nothing wrong.

....

[thinkliberty]

Doh! I forgot the link to the article

http://seattletimes.nwsource.com/html/dannywestneat/2010435946_danny06.html?syndication=rss

[lildog]

One point not made clear in the article, if you earn less then a certain about you get back more from the government then you pay in.

So if this woman were hiding income that would be worse then if a rich person hide their income because she would be doing it not to protect what she worked and earned but doing it to get more that wasn't hers in the first place.  Now I'm not saying that's what she's doing here but something to think about never the less.

[KBCraig]

When I was a single man, I was corresponding with a woman who had found me through a dating website. We got to know each other fairly well, and chatted about our lives and families.

It was the Spring, so I was griping about taxes. She was excited about her refund, which was just about the amount I had paid in through the year plus the amount I paid when filing (about $3,600 IIRC). Knowing she was a low-paid school secretary in a tiny rural town, I asked how much she had paid in through the year to get a refund like that.

"Six dollars!"

Seriously. She didn't even have the dignity to pretend the EITC isn't welfare. What a misnomer: "Earned Income Tax Credit", that gives a refund based on what you didn't earn.

Needless to say, that relationship didn't take off.

[Lloyd Danforth]

One of the national charities, I think the one that gets your employer to give you a day off to volunteer and  make them look good has a radio spot with a Hispanic woman who is 'doing her part' making people aware of their 'right' to the Earned Income Tax Credit

[Ogre]

Just more evidence to prove that every single person living in this country currently IS a criminal in the eyes of the government -- they just haven't gotten around to punishing you yet.