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Protecting Your Money: Tax audit

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Posted at 5:02 PM, Apr 13, 2022
and last updated 2022-04-13 18:02:58-04

CORPUS CHRISTI, Texas — Being audited by the IRS is not fun.

The topic of tonight's "Protecting Your Money" segment is about an audit.

The IRS informed a retired military man that they found an issue with his 2018 return. And that he owes them money.

The veteran contacted us because he believes the person who prepared his 2018 return should be held responsible.

Retired U.S. Army Major George Gibson is now living comfortably on the Island.

On March 21, he received a letter from the IRS:

"It is determined that the long-term capital loss in the amount of $15,400 as claimed on your income tax return for the 2018 tax year is not allowable because you have not established that you sustained any such deductible loss during the taxable year," the letter said.

And that because of that, they said he owed them $5,662.

"Since I had started a business, I needed assistance with my 2018 taxes. So, I had a supposedly reputable CPA," he told us.

He hired Corpus Christi CPA David Boatright, who had also prepared Gibson's 2019 and 2020 returns.

Further, Gibson claims he paid Boatright an additional $500 to take care of the audit.

And that he, Gibson, contacted the IRS, and says they told him they too had tried contacting Boatright.

"Three times the IRS contacted him and he agreed to an interview with them to try to resolve this. All three times he never showed up," Gibson says the IRS told him.

We contacted Boatright by phone yesterday, the same day we interviewed Gibson.

Boatright assured us he would contact Gibson to get this figured out.

Gibson confirmed to us that Boatright did reach out to him Tuesday, telling him he would contact the IRS.

Gibson tells us he's paid the IRS the amount they said he owed them, but he still owes them interest and penalties.

So what do you if you get audited?

The Wall Street Journal offers these tips:
1. Organize all your records
2. Organize by year, type of income or expense
3. Promptly mail copies, never originals, to address listed.

Get organized and specifically as possible.

The better organized you are, the process may go quicker.

And then mail everything - just not the originals - to the address listed.