IRS inquiry: Do incorrect 1099s need rebuttal?

[ManOntheLand]

[QUOTE]It is fairly clear that an IRS agent is working in a world of form. So an explanation is superfluous. It does nothing to help the IRS agent understand anything.[QUOTE]

I agree that an IRS agent is working in a world of form and is not at all likely to understand what you are doing. Exactly why you don't want to take an LMR deduction on a 1040, where the agent's misunderstanding may get your return sent to the frivolous return department.

These returns so far have the advantage of looking like a "regular" return other than the LMR deduction. But once trained to watch for the "lawful money" verbiage, all the agent is going to see is somebody trying to not pay his "fair share" and wasting their time with a "tax protestor" return.

A few hundred filings with LMR deduction is one thing. A few thousand will be quite another. As with slavery reparations deductions, the success at getting quick refunds will cause a steadily accelerating increase in the number of people filing that way until it warrants agency wide attention, and eventually a backlash in the form of demands for filers to "correct" their "frivolous return" and/or audits will inevitably happen.

Non-filers (based on varying positions or even no position at all) are abundant. This the IRS can live with, because the "success" of not filing is ambiguous at best--even if you tell the average American you are not filing, they are far less likely to emulate what you are doing, and will figure the IRS is "coming to get you" any day now. But a simple filing for refund method whose success is easy to prove and imitate? That the IRS cannot tolerate. That is a threat to the whole game. Wait and see.