Forewarned Is Forearmed

Most people think tax returns are just about taxes. This is wrong. In fact there are two very important numbers in every tax return. The first is obvious and is the tax you are being charged. The second number is invisible and innate and is the chance the return will be audited. Tax and risk are the two crucial numbers reflected in every single tax return.

The very best result is to pay the legal minimum tax while simultaneously filing a tax return that will be processed by the IRS smoothly, with no red flags, no omitted forms or disclosures, and the very lowest degree of risk. This is a return that results in no further communications from the IRS. This is the ideal I attempt to realize with every tax return I prepare and sign.

A Tale of Two Tax Returns

The returns I prepare are backed up with extensive documentation, comprehensive work-papers and good thinking. In effect, my tax returns are steel plated. The IRS can dash themselves to pieces against them and get absolutely nowhere because I have previously anticipated problems and issues. As long as clients are honest with me and provide all required information, the IRS will give up quickly and move on to softer targets. This is the highest standard of tax preparation. This is what I was specifically trained to do and it is specifically what I attempt to achieve with every tax return I prepare.

Returns prepared by other less qualified individuals may not be steel plated. They might be mush which attracts significant scrutiny from the IRS. The result of poorly prepared returns is extensive contact with the IRS, audits, letters demanding further information, and, possibly, penalties, interest and back taxes. If an audit is triggered for one year, it might spread to include other years as well resulting in a very costly tax bill. It is possible to do better than this. I insist on doing better. Why not get it right the first time? Isn’t it worth it?

Thinking About Money Makes People Unhappy

A recent scientific study proved that thinking about money makes you unhappy. See:

 
http://www.scientificamerican.com/article.cfm?id=money-buys-unhappiness

Researchers showed that worrying about money increased blood levels of stress hormones and other chemical markers of stress. Worrying about money makes you sick.

The best response to this is to make correct decisions about your money and then walk away until the next scheduled time to think about your money. Thinking about money should be treated like a job, where you report to work at the appointed time, do your very best, and then leave and go home. Don’t bring work or money problems home. Don’t make yourself sick.

 
If thinking about money makes people unhappy can you imagine what thinking about taxes and the IRS does to people? My best advice is to get it right the first time. Make the very best decision you can because you are going to be dealing with taxes for the rest of your life. Those who refuse to deal with taxes can be sure that taxes (and the IRS) will be dealing with them.

Pay the Legal Minimum Tax

One of the most important tax cases considered by the U.S. Supreme Court in the 20th Century was summarized as follows by Justice George Sutherland:

The legal right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted.

293 US 465; 55 S. Ct. 266; 79L. Ed. 596

The English translation is simple: No one is obligated to pay even one cent more in tax than the legal minimum allowed by law.

What a Tax Return Must Have In Order to be Respected by the IRS

It is important to define the key elements of a tax return as clarified by the well-known Beard case (Beard v. Commissioner, 82 T.C. 766, 777 (1984)). Every return must satisfy the following four-part test in order to be processable by the IRS and in order to start the running of the statute of limitations:

(1) The return must contain sufficient data for the IRS to calculate tax liability;

(2) The document must purport to be an income tax return;

(3) The return must reflect an honest and reasonable attempt to satisfy all the requirements of the tax law;

(4) The taxpayer must execute the return under penalties of perjury.

Tax Preparation Services Offered

I have 20 years of tax and accounting experience and offer to help people only in the practice areas in which I am currently knowledgeable. Here is what I can help you with:

S Corporations: Form 1120S

I specialize in S corporations and have extensive experience.

Individual Tax Returns: Form 1040

I have extensive experience with the most complicated individual returns and offer state income tax preparation for all states.

IRS Offer In Compromise

Do you owe back taxes? Is the IRS garnishing your wages and levying money from your bank accounts? An Offer In Compromise will STOP all IRS collection activity and give you an opportunity to get out of tax debt. Call today for a free consultation with no obligation of any kind.

Partnership and LLC Tax Returns: Form 1065

I have many years of experience working with partnerships and LLC's, dealing with IRC Section 754, minimum gain, Section 704(b) capital accounts and related issues.

Trust and Estate Tax Returns: Form 1041

I have many years of experience working with simple and complex trusts and estates.

C Corporation Tax Returns: Form 1120

While I have significant experience with all types of corporate entities including Personal Service Corporations, Personal Holding Companies, and others, I will be asking you why you are not using an S corporation.

Non-Profit Tax Returns: Forms 990, 990EZ and 990T

This is another area of tax practice I specialize in. I have many non-profit clients and offer extensive assistance in this unique area of tax law. Many non-profits also need help with audited, reviewed or compiled financial statements and I am experienced and qualified to provide this service as well.

LEGAL DISCLAIMER