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IRS Audits Man for Claiming $23 in Vegetable Sales

January 7, 2011

A Michigan man is finding himself the subject of an IRS audit because he listed income of $23 on his tax return because he had sold some vegetables from his garden to a passerby.

Donald Dunklee of Richfield Township told, a site operated by the local NBC affiliate station, that he thinks the IRS flagged the $23 figure because it saw the money as farm income.

He received the $23 from a woman who was driving by his 20-acre property and saw some vegetables she liked in his garden. She wanted to give him a $50 bill, but he refused, saying that was too much. The woman told him she only had another $23 and, when Dunklee refused to accept that, she shoved it in his pocket and left.

Dunklee, having been brought up to be honest, listed the money on his tax return, and that caught the attention of the IRS, which probably questioned why the amount was so low. “I understand the needs of the IRS to keep the honest people honest so to speak, but this seems like overkill to me,” he told reporter Dan Armstrong.

The case is reminiscent of the Idaho tax official who wanted to stop some children from selling pumpkins by the side of the road (see Tax Official Threatens to Shut Down Kids’ Pumpkin Stand).

In Dunklee’s case, the IRS claims it was just a random audit. Still, he is nervous about his meeting with the IRS. We wish him well.

Comments (5)
I received a couple of e-mails from Don Dunklee clarifying what happened:

Don Dunklee here. Audited for claiming $23 in income from vegetables. Noticed an article on your site. Here is why I believe the claimed "random" audit is the IRS not being truthful with a taxpayer. A true random audit for a return where standard form deductions from 1 employer, nothing deducted for expenses as we do not meet the minimum for big write offs in any category would go to a general tax investigator, if audited at all. Our return included $23 in farm income that Turbo Tax generated a form F with no expenses claimed, just the $23 in income. The IRS agent was from the "small business self employed" division. My return was not filed as a business since I do not have one. This indicates the IRS targeted a return and was not random in nature. I would rather see the IRS downsized, but our laws require this expense thanks to our lawmakers. I would rather see the IRS be honest and say they have a problem with a line on my return up front and not hide behind the random claim.

In another message, Mr. Dunklee added: The law covering random audits should be public record. I have been trying to find the "law" or "rule" that dictates how a "random" audit is created. If true random in nature, then even a 16 year old with fast food minimum income should appear for audits as often as a mega business. I do not believe the term random is correct (maybe "targeted" would be better). Maybe they claim random if you fail certain minimum tests with their computer then a sample happens? My understanding is they audit returns with potential problems or chances for more revenue recovered for the government. They should be honest about this and not hide behind their statement that these are true random events.
With the interest in the IRS to rebuild their database it seems the computer can show them at a glance every item on every return filed electronically. Some media reports lately seem to indicate they are fine tuning their data base to find real problems and reject those where no money can be recovered. No need for auditors. (no disrespect to accounting, a business necessary almost entirely due to tax law. I think a flat tax would destroy the accounting industry without the 60,000 pages of rules and infinite ways to creatively account for business income.
Of note, On top of my wife and I both having to take a day off work, I used over 30 hours of my personal time during the busiest retail time of the year (only 2 days off for month of December) to collect and organize the information they wanted. The investigator only used 2 items from this and did not even ask about the rest. She seemed to be a nice person just doing her job, but the entire process is intimidating.
Posted by MikeCohn | Friday, January 14 2011 at 4:04PM ET
If the $23 was reported as farm income, I'd certainly think it odd as no farm I know would have such insignificant revenues. The "fault" may just be that the honest taxpayer misclassified the income. Line 21 is on the 1040 for a reason.
Posted by mgmcpa | Wednesday, January 12 2011 at 7:42PM ET
Why blame the underfunded IRS when the citizen elected Congress write the tax code.

And if one would examine the returns produced by all too many CPA's, Mr H Wilson, perhaps the IRS isn't so bad.

Don't mean to pick a fight, but examine your own first. And who have you been voting for to represent you in Congress?

The IRS isn't perfect, but you just mighty check out private enterprise first. Perhaps even some of the companies you do work for.
Posted by | Monday, January 10 2011 at 4:38PM ET
I would rather doubt that the $23 sale was the reason for the audit.

chicken Little is at it again.
Posted by | Monday, January 10 2011 at 4:31PM ET
This is just so typical of everything that is wrong with the IRS.
They spend millions of taxpayer dollars trying to develop systems that are inefficient at best and incompetent at worst, resulting in additional millions lost to fraud, such as all of the refunds given to prisoners, and yet they institute an audit over $23 of honestly claimed income. We would ALL be better off if the IRS were totally abolished in favor of a simple tax system, one that would fit into a few hundred pages of text instead of over 60,000 pages! Of course, we all know that will happen as soon as monkeys start to fly!
Posted by HWilsonCPA | Monday, January 10 2011 at 11:40AM ET
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