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How much is too much?

That appears to be the question when the Internal Revenue Service dissects a taxpayer's return.The IRS stooped to the lowest level of nitpicking when it examined the return of William Roberts of Roberts, Ill.

Roberts owned a .005866 interest in the Alberta Coal Properties Ltd. partnership. The coal business didn't flourish and the firm lost money.

On his tax return, Roberts deducted $4,269, which he computed by rounding off his share of the loss to .0059. The IRS pointed out that the decimal makes a difference. The IRS claimed he should compute the loss using .005866. The loss would be only $4,245; so they increased his taxable income $24.

Still, the Tax Court agreed with the IRS in its demand for a six-digit calculation.

It is difficult to speculate as to the importance of this case. It seems to mean taxpayers must take their computations to at least six decimal points.

THE MORAL: Count on the IRS to go beyond the point of any return.

(BU) Confusion at the IRS caused problems for William and Linda Campbell of Barrington, Ill. On their individual tax return they reported their shares of income from one partnership and loss from another.

The IRS, while examining both partnership returns, sent the Campbells a final notice disallowing the loss but naming the wrong partnership. Because the agency couldn't find the return the Campbells filed, it taxed them at the highest rate. Two months later the IRS sent a tax deficiency notice for the same year but for a different amount.

Needless to say, the Campbells screamed and took both notices to the Tax Court. The IRS admitted it couldn't file two final notices for the same year so the judge dismissed the case relating to the second notice.

Later the IRS conceded their first notice was invalid.

But the IRS said since the first notice was invalid, the second notice wasn't really a prohibited additional notice so the case on that notice should be reinstated.

No way, said the judge. He ruled the Campbells didn't owe more tax because the IRS made too many blunders. "The IRS has shot off its foot and is asking us to glue it back. This we cannot do," the judge said.

THE MORAL: Sometimes the IRS doesn't have a leg to stand on.