Tragedy in Austin, Lessons Learned?

Today a guy named Joseph Andrew Stack crashed a small plane into an Austin IRS office, killing himself and hurting people on the ground.

He also left a rambling suicide note revealing a man feeling persecuted by the IRS and frustrated by his inability to find work, something he blamed on a government tilted toward the rich and powerful. Read Joseph Stack’s suicide note.

Like many Americans, Mr. Stack had been going through tough times. According to his account, he had been an engineer in LA during the Defense Department downsizing of the early 90s that severely impacted Southern California. He lost his job and went through his retirement savings. Then, just as he got back on his feet, it happened again; this time in Austin, TX. Big recession, no work for years, he was again forced to burn through his 401(k) and IRAs.

And to add what was apparently the final straw, Mr. Stack implied in his final note that he had recently lost a battle with the IRS, even though he’d sought out the services of a CPA for help. While he didn’t say so in so many words, I suspect this most recent battle might have been over the income taxes he owed for making premature distributions from his retirement plans to pay his living expenses.

While you probably don’t feel much sympathy for Mr. Stack’s actions, you might be able to understand his frustration. Because while his death may not linger long on the national stage, his life is being mirrored by millions. Americans, unable to find work and running out of unemployment benefits are now being forced to cash in their retirement savings to survive.

So let’s talk about some options, because even if you’re not in tax trouble now, you might be someday.

Out of Work

There’s no magic pill that makes it easy to find a job, but watch this short news story I did a couple of months ago on what to do if your unemployment is about to end, then meet me on the other side.

While the tips in that story are good advice, I’m confined to 90 seconds of video, which means I often don’t have room for other important stuff. One of those things I didn’t have room for in this story was something the woman I interviewed, Lisa Sculnick, told me off-camera. She said that the single most important thing she did for herself wasn’t filling out applications or going on interviews, it was simply leaving the house every day.

Where did Lisa go? Anywhere and everywhere. She went to support groups. She volunteered at all manner of non-profits. She even worked free at some for-profit businesses. In short, she stayed busy.

Networking is a good way to find work. But more important, just being around other people (especially helping other people) is a great way to feel valuable, and people who feel they have value are more likely to both stay positive and stay alive.

IRS Problems

The best way to avoid income tax problems is, of course, not to make mistakes when you file your return. See the 7 most common tax mistakes.

But if you ever do get an audit notice from the IRS, don’t panic, and don’t feel persecuted. While some audits are triggered by things like understating income or overstating write-offs, others are simply random. Think of it like getting picked for extra security screening at the airport. Watch Your Odds of an IRS Audit.

If you do get an audit or deficiency notice from the IRS, contact them at the number provided and get a little human clarification of the issue they’re writing about. If it’s over your head, get some help. Here’s a story I recently did on how to pick the right tax pro: Checking Out Tax Professionals.

I’ve dealt with the IRS plenty of times and they’re really not the Ogres they’re so often made out to be. Even if they find against you and you end up owing money, they’re not going to force you into payments you can’t afford to meet. The only real mistake you can make? Ignoring them and hoping they’ll go away.

Bottom line? Mr. Stack’s story is a tragic one. Don’t let it be yours or anyone else’s you know. Whatever kind of help you need, it’s out there. And whatever kind of problem you have, there are others out there with the same ones. Shake hands with a couple.