Illinois tax audit

[jdwo2212]

Bought a boat 3 years ago from a seller in Tennessee. Im a resident of illinois. Had no problem with paperwork or transferring title or anything. All of a sudden i get a letter in the mail stating they are auditing my boat purchase because i paid below "fair market value". The motor was blown and the boat now books between 11k-15k the tax auditor told me. My bill of sale states that i purchased the boat for 6k. I spend 4.5k on motor rebuild and have receipts. The auditor asked if i could mail that to them to prove i had work done. Also she wanted my bank records and my withdrawals. I said i paid cash and my withdrawls arent accurate because i took out money to pay for the rebuild. Had anyone encounteted this and am i gonna get screwed because my boat is worth more than i paid for it? Like...its my fault i got a good deal? Thats why i bought the damn thing. I guess im curious what my realistic options, and expectations of this process are gonna be? They want all my receipts, registration, insurance info, bill of sale, bank statments.... Im like... That was 3yrs ago. I dont know where that sh*t is. I luckily found the bill of sale in with my title. But jeesh! What is a guy supposed to do????

[ConstellationCity]

I'd contact all the companies you had do work and ask them for receipts as well (if you don't already have them). Also - I would ask the original seller if you can contact him for a notarized letter stating the motor was not running when purchased, hence the price.

[Bamaman]

They're just doing their small part in covering the $ billions in Illinois state pension deficits.

[jdwo2212]

I do have receipts for all work. Chris carson sent me the parts and my local shop did the rebuild. So i have all that. A letter from the seller is not possible as he has since been deployed. I talked to a family member who is trying to get in touch. To me its just unbelievable that they would go back 3 years and all of a sudden have a problem. I guess worst case scenario they make me pay the difference in tax. Just feels like im an unfair target. And the few hundred dollars they may try to say i owe doesnt seem worth the effort or resources they are wasting trying to see if it was legit. Anyway... Im open to recommendations on anyone who has experienced this... Thanks all.

[milligjg]

Another reason I no longer live in the peoples republic of Illinois

[TritonJT]

They are looking for money anywhere they can find it. It is going to get a lot worse.

[billnorman1]

Arguing with the tax man is like wrestling with a pig. Sooner or later you realize the pig enjoys it.

[jejb]

Arguing with the tax man is like wrestling with a pig. Sooner or later you realize the pig enjoys it.

Yeah, that's true, but it's still possible to win. I got tax money refunded recently on a motorcycle purchase. It took 3 months or so of chasing it around, but I got my $900+ that I'd been over taxed back.

It is odd it's taken 3 years for this to pop up. Maybe they installed a new software program to go back and check value to paid price, and it's flagging those for audit?

[barbarian]

Never heard of such a thing. Sounds like one of those radio birthday pranks or something.

[jdwo2212]

Yeah.....odd as ever to me.

[Kodiak16]

First they would never call. No don't send your bank records. Verify that this is real.

[jdwo2212]

They didn't call. I got a letter in the mail from them. I called immediately asking what this was all about.

[Duckhunter250]

Who is the letter from?

[jdwo2212]

Illinois dept of revenue.

[ksubasser24]

You should be taxed on what you paid for the boat. I am assuming you paid tax on the work performed on the motor. So I would make that your point if they try to tax you anymore. I would get a valuation of just the hull as that is what you bought if it didn’t have a running motor at the time.

[TampaJim]

I’d send a copy of the repair invoice(s) with a polite letter considering the case closed.
They’d have to get a court order for me to turn over my bank records, this isn’t Russia.

[barbarian]

I’d send a copy of the repair invoice(s) with a polite letter considering the case closed.
They’d have to get a court order for me to turn over my bank records, this isn’t Russia.

^^^^^^ this. Send every receipt you have, but zero bank records. You could’ve had 10k in a safe at home.

[Ben Danbleume]

I don't think you should have to send anything other than a sales reciept. When did the government become the decider of whether you get a good deal or not? I can understand if they charge property tax based on FMV but to tell you you didn't pay enough for the boat.

[Nightmare]

Advise from other states than whom you're dealing is mostly worthless. But, what the heck: I had a situation with a vintage Corvette I bought almost 40 years ago now. Young man needed school money and short story, he got what he needed and I got a deal (which I still own btw). After a while the fine state of Ohio contacted me concerning what they thought was a bs purchase price that the tax was based on. Again, short story, I told them that when they got done persecuting (er, prosecuting) everybody else that was involved in this suspected swindling of Ohio - including the seller, notary, and county clerk that issued the new title....then get back with me. Until then, go pack sand.

..."the few hundred dollars they may try to say i owe doesnt seem worth the effort or resources they are wasting trying to see if it was legit."... Not the right way of looking at it (from their end). These people are collecting a paycheck anyway and it makes no difference what they occupy their time with, doing it. Besides, guarantee you me, there's going to be penalties added above and beyond the additional tax assessment.

Good luck.

[jdwo2212]

Thanks all. Ill just send em what they need and a letter and hope it gets it settled.