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Even IRS Employees Sometimes make Errors on their Personal Tax Returns

August 1, 2010 by Mike Verville

IRS Service Center Employee’s Medical and Charitable Expense Deductions Disallowed: 

Taxpayer/IRS service center employee’s claim for medical expense deductions was denied due to lack of substantiation.  Although Taxpayer submitted a statement from his health insurance company, the statement did not show he actually made payments.  At trial, he did not offer testimony to clarify the health insurance deduction, and ultimately conceded that the IRS’s disallowance of his health insurance deduction was correct.

In addition, the same Taxpayer’s claim for charitable contribution deductions was denied due to lack of substantiation.  At trial, taxpayer submitted a list of purported donations, he was unable to verify contemporaneous nature of same or offer any other evidence regarding his record-keeping.  Ultimately, he agreed that the IRS’s determination was correct. Also, with the exception of certain items the IRS allowed, taxpayer wasn’t entitled to deductions for some of his miscellaneous expenses. (Arnold Freedman v. Commissioner, (2010) TC Memo 2010-155, 2010 RIA TC Memo ¶2010-155)

When claiming deductions, it is important to keep good records in the event you are selected for audit.  You may be required to substantiate the deductions at some point in the future.



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