Our tax law is overly complicated. Many of its laws have exceptions, and sometimes those exceptions have exceptions. If you are a DIYer and rely upon the IRS’s published materials to prepare your tax return, you may just find yourself at the wrong end of an IRS audit examination.
The first rule that you need to understand is that you cannot rely upon IRS oral advice. So if you are calling the IRS to seek guidance, the IRS says that you cannot rely upon that oral advice. For years the IRS had a reputation of putting its most inexperienced employees (new hires) on its taxpayer assistance call lines. Thus it was possible that the person calling knew more about federal income taxes than the IRS person on the other end of the call. Today, due to IRS staff cutbacks and long wait times, it is difficult to make contact with an IRS employee by phone. Furthermore, the IRS has closed many of its walk-in offices to the public so many taxpayers can no longer walk into an IRS office and seek oral advice.
We are now in the information age and many taxpayers will look for tax advice on the Internet. The IRS website has its own search engine to allow taxpayers to “research” a tax issue. This website contains a wealth of information. Surely taxpayers can rely on that official IRS information, correct? [Read more…] about What? The IRS does not follow its own publications?