You Think You Know, But You Have No Idea: Strange Horror Stories About the IRS

We all sweat thinking about an IRS audit, but only in 1 in 160 people got audited in 2017.

Even with such low odds, the IRS audit experience is nothing pleasant. In fact, the internet is full of horror stories about audits gone wrong–or just plain weird.

There are some creative ways to save money, but filing taxes isn’t one of them. How strange has it gotten for some unfortunate folks?

Read on for our collection of the weirdest IRS horror stories.

Lost Memo

What happens when the IRS sends an audit memo to your old address and you don’t know you’re being audited?

That’s what happened to one unfortunate woman in Pennsylvania right before she was scheduled for back surgery. The IRS placed a lien of $10,000 on her bank account, which was more money than she had.

It took 11 months and a delayed major surgery to sort through the chaos of a full audit. The most ironic part? They discovered she was actually owed money from 2003!

Dependant Dogs

Many animal lovers claim to love their pets as much (or more than) their own children–but does that qualify them as dependents?

Not according to the IRS, but that doesn’t stop people from trying.

In fact, one man who owned a pet store tried to claim his five dogs as “dependent children” on his tax forms. He claimed $10,000 in living expenses and almost got away with it–until he listed “dog food” as an exemption.

Once the IRS figured out what he was doing, the man was audited and heavily fined. So remember: No matter how much you love Fido, he’s not tax-deductible.

Caribbean Vacation Gone Wrong

We’ve heard of vindictive ex-wives, but this one caused some serious problems for her ex-husband.

A businessman with legitimate business in the Cayman Islands, the husband frequently traveled and banked there for work. However, as the Caymans are a notorious haven for tax evasion, his ex-wife saw the perfect opportunity to cause trouble.

She reported him to the IRS, who had him arrested and held on a bail amount of $5 million. During the course of the investigation, he paid several million more in legal fees to prove his innocence.

This is where an offer in compromise might have come in handy!

Costly Error

During a routine tax audit, one unfortunate salon owner had all her equipment seized. The ITS then auctioned it–and her salon–to pay off her debts.

The problem? The IRS made an error and later discovered she had, in fact, paid all her taxes in full that year.

Although her equipment and store were eventually returned to her, her business had suffered significant damage as a result of the auditing error.

IRS Horror Stories and More

Although everything eventually turned out okay for these unfortunate tax filers, we can guarantee they don’t want to repeat the experience anytime soon.

Hopefully, your tax-filing experience this year (and every year) doesn’t get added to our list of IRS horror stories.

Need more weirdness in your life? Check out our recent post about weird ways people have tried to smuggle animals illegally.

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