Syl

Taxes: So Complicated, Even the Folks in Charge Can't Get It Right

On my 2006 tax return I showed that I exchanged one mutual fund for another fund within the same family of funds. In other words I traded any equl value of one fund for an equal value of another fund. Bulletin #110 specifically says this does not constitute any capital gain or capital loss. The major fund family sent a report to the IRS specifically saying I was trading one fund for another of equal value. Did the person reviewing my tax return accept this? Absolutely not. That person insisted that I had made a sale and would be required to list the cost of each fund. Both the receiveing fund and the exchanging fund. I sent copies of the funds records to this IRS person, but she still insisted that I had sold the first fund and bought the second. As I tried to explain, I did not receive one dime nor did I pay one dime for this exchange. Either the forms are too complex or the personnel in IRS are not adequently trained and worse yet, the employed personnel receive little or no supervision.

As a last resort I paid the IRS $39 for a copy of my tax return and they, after eight weeks, notified me they could not find a complete copy of my return. My original return was sent to the St. Louis office, but in my efforts I had to try to work with an employee in Texas. They did finally mail me a check of $39 to replace the original I had sent to them for a copy of my return. I'm still wondering what happened to that part of my return that was lost.

Finally, rather than pay an attorney a large fee I decided to pay the amount supposedly owed and then remembered that a former employee once told me "When you get into an argument with a skunk, you are going to lose."