Tears and Taxes

The white woman with an office in Brentwood and a $1.5-million home in the south of France was in tears.

The black man with a business in South-Central L.A. and a lifetime of hard work behind him was in a rage.

“They’re driving me crazy,” the woman said, wiping her eyes.

“I’ve worked like hell for what I have and I want to keep it,” the man said, trying to control his anger.

The woman has spent $190,000 in legal fees trying to straighten out a mess that probably shouldn’t have existed in the first place.

The man has paid a bill twice that he probably shouldn’t have had to pay the second time and is still being harassed for payment.

Welcome to the Wonderful World of an IRS Audit.

Anyone who has ever had his taxes audited knows it’s a lousy place to be.

Mere receipt of the letter evokes images of criminal charges, federal prison, homosexual rape, an escape attempt, a shoot-out, capture and additional time behind bars, plus interest and penalties.

Add to that imaginary scenario years of harassment and confusion and you have the reality of what has befallen two people I write about today.

Their names are Linda Peck and Nathaniel Mullins.

I mention their colors and their economic positions only to acknowledge that the Internal Revenue Service is anything but racist or class-conscious in its seek-and-destroy missions. Any target will do.

Both Peck and Mullins were audited in 1984. Peck, 50, the divorced wife of wealthy builder Clair Peck, was in France when notified by the IRS. Mullins was working in his real estate office on West Florence Avenue.

Far from poor, Peck was living off a $2-million divorce settlement. She also once owned a flower shop and was abroad in ’84 researching a television project.

“I thought ‘no big deal,’ ” she said when notified of the audit. “I had 40 boxes full of records and told my bookkeeper to give them what they wanted.”

Mullins, 68, has been a real estate broker for 30 years and describes himself as “a hard-working, middle-class person.” He was told right off that he owed $65,000 for a five-year period, which included the year 1978.

He sighed, blamed an incompetent ex-bookkeeper, mortgaged his home and paid the $65,000 in full. That’s what a good citizen does.

Three years later, the IRS thanked him by saying he owed $5,000 for 1978.

Mullins explained that he had already paid what he owed for ‘78, and an IRS accountant said all right, in that case the government would settle for $2,800.

Mullins argued but finally paid the $2,800 to get them off his back, and was assured that he was even with the board.

He had hardly finished sighing with relief when the IRS said greetings, you owe $1,600 for 1978.

Meanwhile, the agency was demanding more and more documentation from Linda Peck. She returned from France, prepared volumes of material for them and was so effective that the auditor found a $25,000 error in her favor.

She was sent a refund check, which she promptly returned toward her next year’s taxes, which the IRS promptly lost. This caused more confusion and, for a time, the threat of attaching her bank account.

About now, the first auditor disappeared and a new auditor assumed his duties. Everything started all over. Mounds of documents became mountains, months became years.

“I never have found out what they want,” Peck said in a Brentwood office she leases for $1,700 a month just to handle the audit.

“I took the auditor to lunch twice, hoping he’d reach some sort of conclusion, but he hasn’t. I’d move in with him if I thought it would help.”

Even high-priced lawyers in L.A. and Houston have been unable to determine precisely what the problem is, if any.

“If they’d issue a legitimate tax bill,” Peck said, sobbing, “I’d pay it and get on with my life. I can’t even protest, because they won’t tell me how much they want!”

U.S. Sen. Pete Wilson and two congressmen have contacted the IRS on Peck’s behalf and she is hopeful that their muscle will bring her nightmare to an end.

Mullins, meanwhile, went to the Problem Resolution Department of the IRS, and they said they’d take care of it. They did. The $1,600 Mullins doesn’t owe has grown to $3,029 with interest and penalties.

But just last Thursday, someone from the Tax Collection Department called to say they were working on his case.

With a little luck, that shouldn’t cost him much more than another few thousand dollars, plus his home, his car and his sanity.