Blue-Footed Musings

April 17 was Tax Day, and it was an unpleasant day for us, thanks to the IRS audit. The reason we were audited is that we took the first-time homebuyer’s credit that was offered for 2008. We had bought a house that year, and it was our understanding that we qualified for the credit. I didn’t personally, but my husband did because we hadn’t been married at the time of the purchase, a key fact that the IRS may have overlooked.

We’re not sure, though, exactly what made the IRS single us out. They never stated exactly what the problem was. But they threatened us with such outrageous fees and interest charges that we decided on the quick-fix course of action that our tax adviser recommended. He said that if we paid the credit back in full when we filed our tax return this year, most likely the IRS would let the matter drop, forgiving the fees and interest. So that’s what we did, but we won’t know the IRS’s reaction for a few months.

This whole ordeal seems so pointless. The 2008 credit, unlike the one from the following year, was merely a loan. Interest free, granted, but a loan nonetheless. We had taken it in good faith, and we spent it, helping to stimulate the economy, as was the intent of the government in offering it. We had already begun the repayment process, a clear sign that we intended to pay back what was due.

What really bothers me is that we did not need the loan, and we would not have taken it had we not qualified. We would simply have spent less money fixing up the house. So we feel kind of like the government baited us, got us to take the money and spend it to save the economy that they had failed to protect, and now they’re trying to make some extra cash off of us. It’s interesting that they waited until now, just long enough so that we couldn’t file an amended return, just long enough to let the interest pile up. Considering that they sometimes adjust our returns, it amazes me that they allowed us to take the credit at all if they didn’t think we qualified. It feels like a bit of a shakedown.

I know that’s probably not the intent, and I know it’s not a personal attack. It’s probably just red-tape bullshit. And while the lump-sum repayment is extremely painful at this time, we can accept it, because we know we had to pay the money back eventually. We can even accept feeling like we were duped by the government. Whatever. But just the threat of fees and interest has already caused us great anxiety. The amount they want is roughly equivalent to the cost of a year of preschool. It’s a lot of money, and we need it for our kids.

To me, this incident makes the IRS seem like a big bully trying shake the lunch money out of the defenseless kid’s pockets. Since we got that first threatening audit letter, we have felt like no matter what we did we were going to lose. That’s why we just gave them back the money, even though we didn’t do anything wrong. So I just want to say that I hope the IRS is proud of itself. We have paid our taxes diligently for our entire adult lives, and this is no way to reward us.