‘S. Davis Loves Taxes’ (Blog)

Taxpayer learns a lesson: Deductions Disallowed

When selecting a licensed professional to handle your tax filings and issues, make sure their area of focus has or is in taxation.

Larry bird’s business partner, Christopher Cooke, learned this lesson the hard way.

When attempting to take deductions for a property used as a Bed & Breakfast, his response, upon examination, to the Tax Court was that he relied on the advice of his CPA.  The Tax Court determined that his deductions would be disallowed and subject to accuracy related penalties.

“[Mr. Cooke] offered no evidence of the CPA’s competence as a tax professional or that he provided the CPA with all the necessary and accurate information required to provide proper advice. Thus, the Tax Court found that he was liable for the penalties.”  –  Howard, Beth. “Deductions Disallowed for Operator of Larry Bird’s Former House as a B&B.” Tax Matters, Journal of Accountancy, 1 Aug. 2017, www.journalofaccountancy.com/issues/2017/aug/operating-deductions-disallowed-larry-bird-former-house.

When seeking advice, ensure you are dealing with a licensed tax professional.

Why do I need an IRS Form 2848, Power of Attorney (POA)?

Photo Credit: http://www.cpapracticeadvisor.com

In a traditional sense a Power of Attorney is a document used to appoint a person or organization to manage your business, legal or private affairs.  The person or organization will essentially act as an agent and handle powers, specified, on your behalf.

However, in the context of this article the Form 2848, Power of Attorney and Declaration of Representative is a form used to authorize an eligible individual to represent you only before the Internal Revenue Service with regards to tax matters.  Many states have an equivalent form or version of the IRS’s power of appointment.

The Form 2848 POA will allow the individual to represent you, obtain tax information and handle your account with the IRS, including the ability to resolve matters with different agents within the Service.

Why would I want someone to represent me?

  • Some people are intimidated when contacting the IRS to resolve an issue – giving a tax attorney, EA or CPA a power of attorney would be an option to consider.
  • You may want someone who is more knowledgeable in taxation to handle your issue(s).
  • As a trustee or heir and may need someone to help address tax issues related to a trust or the family’s estate.
  • Traveling out of the country and need someone to represent you; an appointment of an authorized individual is a good idea.

You can limit the type of issues, forms or years the representative is authorized to handle.

Additionally, you may cancel (withdraw), add another individual, or change representatives on a Power of Attorney.

To submit an appointment of a POA to the Internal Revenue Service you may obtain, prepare and print a Form 2848 here.

To submit an appointment of a POA to the Massachusetts Department of Revenue you may obtain, prepare and print a Form M-2848 here.

If we advised you to sign a power of attorney there are certain sections of the form that must be completed properly.


Shanikwa Davis, EA, MST

Principal Owner @ S. Davis Tax Consultants

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What is an Enrolled Agent (EA)?

An Enrolled Agent (EA) is a tax expert that can handle the same issues as a Certified Public Accountant (CPA) or Tax Attorney, when it comes to representation before the Internal Revenue Service (IRS).

“EA’s tend to focus on preparing taxes, and many specialize in tax resolution.  An EA is authorized by the U.S. Department of the Treasury to represent taxpayers before the IRS for audits, collections, and appeals.” – Kulp, Kayleigh. “EA vs. CPA: Which is Right for You?” Fox Business. Fox Business, 26 Mar. 2012. Web. 6 July 2017.

While a CPA may perform many accounting and financial services, some may not specialize in taxation.

An Enrolled Agent is a federally authorized tax practitioner who may also handle many state tax issues with a duly authorized Power of Attorney.  See our blog on “Why do I need a Power of Attorney?”

Like CPAs, Enrolled Agents must maintain a certain number of hours of continuing education to maintain their license.

There are factors to consider when determining which licensed tax professional to hire.


To learn more about my professional credential, as an EA, and experiences select the link below.

Shanikwa Davis, EA, MST

Principal Owner @ S. Davis Tax Consultants

Are you married and don’t want to file a joint return with your spouse?

Did your spouse underreport or exclude income from a return and you are now under review?  Is the assessed liability due to your spouse’s income or lack of withholding?

You may be eligible for innocent spouse relief, separation of liability or equitable relief of tax, interest and penalties related to your federal tax liability.

There are conditions that must be met to qualify for any of the options.  Several factors are considered to determine if it is unfair to hold you responsible for the full understatement or underpayment of tax.

Does your spouse owe a past due such as child support, federal or state tax or federal non-tax obligation?  Worried about your income tax refund being applied to that obligation? 

If you are not required to pay some of your spouse’s past due amounts, you may be eligible for relief.  The non-obligated spouse may submit an injured spouse claim and allocation request.

Why would I file a return with my spouse and submit one of the above relief requests, instead of filing separately?

  • Many credits available are disallowed when you file a separate return. Electing ‘married filing separately’ status will result in loss of credit for dependent care, earned income credit and the education credit and deductions. Certain other credits are reduced to half.

Why would I file a return with my spouse and submit one of the above relief requests, instead of filing as head of household?

  • To be eligible for head of household status, you must be unmarried or ‘considered unmarried’ on the last day of the year. You may contact our office to determine if you are considered unmarried.
  • If you are married and not considered unmarried, you CAN NOT elect Head of Household filing status.

Publication 971 provides additional information and helpful charts at the end of the publication.

If you would like to file or determine eligibility of relief, you may contact our office at 508.203.1676.


Shanikwa Davis, EA, MST

Principal Owner @ S. Davis Tax Consultants



Speaking Engagements


Shanikwa has been a guest presenter and speaker for higher education institutions, business meeting, conferences, and community based organizations over the last five years.

You may schedule or submit a booking request by emailing shanikwadavis@verizon.net to discuss availability and all the details of your event.