Read Your Mail From the IRS: A Cautionary Tale

Because my husband was deployed, we didn’t file our 2008 and 2009 taxes until October.  (Also, because I was lazy.)  In December, we got a notice from the IRS.  I was quite relieved to discover that we were not being audited, but that the IRS had disallowed our Earned Income Credit and was reducing our refund.

My initial reaction was that I had made a mistake.  It is certainly possible – they make the tax laws hard enough!  I put the letter aside and then picked it up a different day.  At that point, I read the line that said that they had disallowed our Earned Income Credit because we earned too much interest income.  Wait – what?  That doesn’t sound right.  I looked up the regulations online and it said that you could not have more than $3,100 in interest income.  We had nowhere near that amount!

I called the IRS (which they don’t make easy when you are overseas) and finally got through to an actual person.  I explained my situation and after a few minutes on hold, she returned to inform me that the letter was in error and she would correct it.  I can’t believe I almost lost out on a huge tax credit because I doubted myself!

The moral of the story is this:  read your mail from the IRS, all the way through, and call/write.  (Be sure to get the employees name and employee number, too!)  Don’t assume that the IRS knows what it is doing.  You need to understand it all so that you can make sure you are getting the credits and payments to which you are entitled.

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.