Actually, they can keep the t-shirt...check, please! |
It was early June when a letter arrived from IRS explaining that we (and lots of other adoptive parents, as it turns out) were being audited re: our adoption tax credit. The folks at IRS gave us 30 days to gather our receipts, invoices, cancelled checks, etc. to document our expenses and submit said documents to their tax examiner. If we couldn't comply within the time limit, they would set aside our request for a credit and we would be out of luck, meaning no more of our money would be refunded to us. If we got them the paperwork, then they would review our records and decide how much more of our money they would refund to us. (Am I bitter? Just a tad bit...)
Anyway, this might seem to be an easy fix to those unfamiliar with foreign adoption. After all, if you adopt, you work with an agency and that's a business, right? Businesses give receipts and invoices, right? And everyone has cancelled checks, rights? Um, not so much.
See, we adopted from Kazakhstan...on the other side of the freakin' earth...and it's a cash economy...that uses its own currency...and English isn't the language of Kazakhstan. The aforementioned issues presented a teensy problem to securing what IRS needed in a timely manner.
- Cancelled checks??? All our in-country fees for our foreign adoption had to be paid in cash, nice crisp $100 bills and not a check, credit card slip, or receipt in sight. Of course, this was the largest part of our adoption expense...and did I mention we adopted not one but 2 kids?
- Oh, yes, we did get some receipts for airline tickets and hotel bills and filing fees while in Kazakhstan. All I had to do was have them translated from Russian to English...and then use a currency converter to calculate the exchange from KZ tenge to US dollars. Several nights with my computer and my Russian speaking son at my side got me the documents I needed.
- Interestingly enough, even our adoption agencies here in the US never gave us receipts for our home study fees, program fees, post placement reports, etc. At least they were willing to send me receipts after the fact...they were very gracious and did their best, getting the copies to me in less than 2 weeks. (Unfortunately, the agencies are also swamped with calls now since all their other adoptive families are being audited, too and everyone needs receipts.)
- Cancelled checks for USCIS or KZ embassy filing fees? Forget about it! None of those guys take checks, only money orders or cash. Luckily, I had a stack of those receipts stashed in a file...only took me a week of sorting and organizing the documentation to come up with a total figure.
- Had tons of little receipts for apostilles, document stamps, etc. Didn't even bother to add them up. Figured my time was better spent focusing on the big ticket items. Kept the suckers, though...you never know what IRS will ask for next.