So Congress implemented a tax credit to facilitate adoption – a process that is so extraordinarily expensive that it is out of reach for many middle-class families — and the IRS responded by implementing an audit campaign that delayed much-needed tax refunds to the very families that needed them the most. Oh, and the return on its investment in this harassment? Slightly more than 1 percent.
Earlier this week, in a feeble attempt at humor on Facebook, I posted: “If you haven’t been audited by the IRS during the Obama administration, can you even call yourself a conservative?” Given the scale of the abuses, I should probably just shorten it and say, “Only RINOs don’t get audited.” My wife and I got audited in 2011, with the IRS examining every inch of our adoption the previous year. The process was painful, but we got through it, and our refund may have been adjusted by a few dollars (the amount of the adjustment was so small, I don’t actually remember). In other words, the audit was a gigantic waste of time — for the IRS and for our family. A Facebook commenter, however, pointed me to a report that made me rethink the experience.
As we get word that the IRS has harassed a number of pro-life groups, including at least one alleged demand that a pro-life group not picket Planned Parenthood, check out this statistic: In 2012, the IRS requested additional information from 90 percent of returns claiming the adoption tax credit and went on to actually audit 69 percent. More details from the Taxpayer Advocate Service: [Editor’s note: the original URL (link) referenced is no longer valid, so the link has been removed.]
During the 2012 filing season, 90 percent of returns claiming the refundable adoption credit were subject to additional review to determine if an examination was necessary. The most common reasons were income and a lack of documentation.
■ Sixty-nine percent of all adoption credit claims during the 2012 filing season were selected for audit.
■ Of the completed adoption tax credit audits, over 55 percent ended with no change in the tax owed or refund due in fiscal year 2012. The median refund amount involved in these audits is over $15,000 and the median adjusted gross income (AGI) of the taxpayers involved is about 64,000. The average adoption credit correspondence audit currently takes 126 days, causing a lengthy delay for taxpayers waiting for refunds.
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