Under Audit

Twenty-seven-year-old Kayla Zak was in this very same room, three months, two days ago to be exact, sitting at the same table. She stared nervously at the clock mounted high to her left, waiting for her appointment with Special Agent William Gaskons, Field Office Supervisor for the Eastern District of the Internal Revenue Service.

Kayla’s first audit did not go well; she was assessed a fine of $20,000 for failure to provide backup documentation relating to her business expenses.

The words from her CPA pulsated over and over in her head, “You have to keep your receipts, they’ll fry you if you ever get audited.”

At the age of twenty-one, Kayla established a small art studio in the basement of her parents’ home, and over the past six years her business flourished. It now includes seven aspiring young artists and one intern.

Just two years ago, she converted an abandoned garage into a full-service art studio, offering painting, drawing, sculpture and printmaking. This past year she established an art's program for disabled veterans suffering from PTSD and currently volunteers her time tutoring weekly classes for 22 veterans.

Throughout the building renovations, Kayla kept meticulous records, recording each expense item into her notebook. Unfortunately, she failed to save the actual receipts, which is why she was sitting back in the IRS office, waiting for her appeals hearing to begin.

After what seemed to be an eternity, Agent Gaskons walked in and introduced himself with a slight nod of his head as he quickly sat down. His black mask fit tightly over his nose and mouth, which accentuated his breathing as he spoke.

The thick glasses he wore appeared to fog up every minute or so. Kayla was so fixated on the inward/outward motion of the mask that she failed to comprehend what Agent Gaskons was saying.

“Our Field Agent reports that you neglected to produce any receipts from your renovations, so unless you can provide some additional tangible back-up information, I’m afraid I cannot do anything for you.”

All Kayla heard was “you’re fried if you ever get audited.”

Repeating himself, Agent Gaskons again asked if Kayla could produce any additional records. She reached over and picked up her backpack and laid it down in front of her.

She took out her Legend of Zelda Notebook, the little black book that she uses solely for business activities, and slid it slowly across the table.

Agent Gaskons picked it up and ran his right hand across the cover, from top to bottom, then side to side, and flipped it over twice, almost as if he was looking for a secret opening.

Laying it softly back on the table, his eyes widened as he fixated on the notebook cover. It was impossible to make out, but Kayla thought he was smiling under his mask.

He then reached into his briefcase and pulled out his leather notebook and placed it next to Kayla’s. It was a birthday gift from his granddaughter Emily, who excitingly said the cat on the front cover looked just like her six-year-old “Ms. Kitty.”

Emily also has the identical notebook and uses it as her daily journal. Poppy, as she calls him, was impressed with the notebook's look and quality and uses it on a daily basis as well.

Agent Gaskons opened both books, looking left, then right, left again, and began writing with his black roller pen plus. He appeared to carefully study each of Kayla’s entries, one by one, taking notes throughout the process.

After about 20 minutes, Agent Gaskons closed each book and took several deep breaths. He picked up Kayla's notebook with both hands and presented it back to her. Then he spoke.

“Ms. Zak, it’s always a pleasure to meet such a young entrepreneur like yourself, and I admire your passion and drive to succeed. But as you know, rules are rules and actions have consequences. In this case it is your inaction to produce proper receipts. However, from what I see here, your written records are impeccable.

I'm satisfied that you have meet IRS standards governing supporting documentation and it is my determination to overrule the initial findings and rule in your favor. The $20,000 levy assessed by the previous agent will be vacated.”

Kayla sat stunned and breathless. How could this be? She presented the same information in her black book literally three months ago and lost her case. This was a complete reversal. After thanking Special Agent Gaskons, she began putting her backpack on to prepare to leave.

Before she stood, Agent Gaskons announced he had just one additional question. He said he started playing the Legend of Zelda 33 years ago in 1987, when it was first released, and continues to play even now with his grandchildren.

“Why did you choose that Moleskine,” he asked.

Kayla said she had never played that game, but the black leather cover and fine quality of the binding and paper gave her a feeling of adventure, of significance, almost of mystery. Accounting for expenses never felt so important.

Only, from now on she will save her receipts to go along with her accounting entries.

“By the way, there’s something else you might be interested in,” Kayla said to Agent Gaskons as she reached into her bag. She pulled out her own 12-month pocket planner, the one with the waving kitty, just like his. “I use this one for personal matters,” she said.

Turning to leave, she gave Agent Gaskons a wink, pulled down her mask, smiled and whispered "meow."