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Author: wrjohnston91283 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121341  
Subject: Re: The Cost Basis Crisis Date: 7/1/2006 10:45 AM
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We're being accused of a crime--indirectly, to be sure, but it's an accusation, nonetheless. Such audits are nothing but a government fishing expedition. The government should have to prove we've done something illegal--and that includes having done this deliberately and not simply as a result of a mistake. And when we do successfully prove everything, or more likely, when our errors net out to close to zero, what do we get for our troubles? Nothing. Certainly not reimbursement for our costs. Deductability doesn't even begin to cover the costs.

The IRS would not be accussing anyone of crime. The tax system currently runs of voluntarily reporting your gains. They trust people to report them correctly, and can't always prove you that people don't report correctly. However, people are not reporting them correctly, either through negligence or fraud. The government does not know when any individual bought a stock and at what price, so they are simply asking auditee's to back up their tax return with evidence. If you're done nothing wrong then there is no problem.

Granted, stocks purchased prior to today would be grandfathered in, you wouldn't need to back them up. Same goes for stocks you receive as a gift and don't know the basis. However, going forward, especially with computers today, everyone should be able to keep track. If you can't, then you should be investing in index funds, not individual stocks. I don't fix cars because I don't know how...if you don't know how to properly track investments, don't invest. I don't know why Quicken is having issues, but MS Money has no problems for me.

WRJ
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