Took my morning stroll to the mail box about 10:45am today. Picked up our cable/tv bill, an advertisement and two catalogs for musical equipment.

And a notice from the IRS...

The notice said there were changes planned to be made to our 2012 income and that we needed to pay them $24,709.00 by June 11th or make payment arrangements. Once I began breathing again, I came in and checked my schedule and while I am really, really busy, 24.7 big ones is going to be tough. Within the letter was a list of Form 1099-misc. accounts showing income I allegedly failed to report. I opened up my accounting software and grabbed our hard-copy of tax info from that year and dug in. Virtually ALL of the 1099-misc amounts were already included in my original filing. Except one. Company A, a smaller place, was a facility I performed at 12 times in 2012 and charged them $80.00 each time. Total receipts from this location was $960.00

My accounting software records support this...

Digging further, the 1099 that Company A sent me also confirmed this...

The letter from the IRS however showed my wages from Company A being $96,000.

I wish...

It took me about 90 minutes on the phone with the "under-reporting department" to clear this up. It was a simple typo at the Treasury Department. I can disregard the notice and in a few weeks I should get an updated and corrected one.

Happy. Ever. After.

ALTERNATE VERSION:

After explaining the problem, I was asked which Presidential candidate I supported in 2012? I replied "...Obama."

Then I heard "good answer"....give me a moment to verify this information, please...

Moments later I was told to discard the notice.

"Have a nice day, Mr. Corfield. See you in 2016!!!"


The importance of being organized, and knowing what your system us and how it works can not be stressed enough.

The importance of being organized, and knowing what your system us and how it works can not be stressed enough.

Absolutely, Bill - I've been preaching this for years, but I know a lot of musicians and entertainers that failed to heed the warnings and eventually got nailed big time by the IRS.

The irony of this is there are a lot of performers out there that get paid in cash and figure they don't have to report the income. Well, you might get away with it from a private party or two, but when it's for a business, and that business gets audited, their bookkeepers go armed to the teeth with expense information. When they show cash outlays for promotional and corporate parties, the IRS often asks for the name of the person that cash was paid to. Whoops!

Cheers,

Gary

OMG Bill how scary that must have been.

Beyond the honesty/avoid IRS trouble thing is that suppressing your income hurts you in some cases. For example, trying to buy a house, you generally want to show a robust income.

By the time our accountants are done with small business guys like us it appears we have a glorified paper route or something, lol...