Business owners and residents of Dallas, Texas, are usually careful to follow all relevant tax laws. Failure to do so can result in steep penalties and interest, which can lead to businesses closing or individuals drowning in debt. For one man, a meeting with the Internal Revenue Service to discuss a payment plan for $60,000 he owed turned into a windfall after he suffered injuries due to a fall.
According to a lawsuit filed against the IRS, the man fell during the meeting with an IRS agent. The man reported that his leg became wrapped in a cord, causing him to fall into a cabinet.
The man left the office under his own power but placed a call to the auditor a few minutes later. The man, who was sitting in the parking lot, told the auditor that he was experiencing shoulder pain and couldn’t feel part of his leg. The injury resulted in a 17-day hospital stay.
The man filed a personal injury claim against the IRS for $10 million. He claimed the injuries suffered during the meeting with the tax auditor caused him to be unable to enjoy life as before. He identified specific losses, such as inability to play golf or enjoy sex with his wife more than once a month.
Attorneys for the IRS argued that the man was exaggerating his injuries. The defense even sent investigators to film the man at his home, hoping to catch him doing something strenuous as proof of the exaggeration. Despite this, the judge sided with the plaintiff, although he didn’t award $10 million. According to court documents, the man walked away from his bout with the IRS with $862,000.
Most people don’t walk out of an IRS audit or meeting with money. The goal should be to walk out with less debt through an offer in compromise or other agreement. Preparation is the best way to increase the chances of a positive outcome.
Source: NY Post, “Man wins $862K for tripping at IRS audit” Selim Algar, Jan. 20, 2014