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.
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
Contact the Treasury Inspector General for Tax Administration to report a phone scam. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.
In the recent months I’ve received several inquiries regarding the IRS ‘calling’ and threatening taxpayers.
These calls are not restricted to any specific type of taxpayer.
You will typically receive something in writing via postal mail (there are some exceptions). If you do owe the IRS be sure to contact them directly, ignoring a notice will not make them go away. See our blog on options for paying the IRS.
Their main number is 1.800.829.1040.
The IRS is aware of the increased scam calls. Select here to go directly to IRS.gov to learn more.
Congress authorized a new program which allows private debt collectors to collect outstanding past due ‘inactive’ account balances.
Select here to learn more about taxes collected by the private debt collection agencies.
If you or someone you know needs representation……you may contact our office at 508.203.1676.