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.
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.
Photo Credit: http://www.mass.gov/dor/confused-by-a-notice-or-form.html
The ‘busy season’ is over but for some of you, an extension was filed. I will reach out in a few weeks to finalize your information.
Just a few final notes (may not be applicable to everyone):
I have been informed the Massachusetts’ Department of Revenue are sending random requests for information. Practitioners have been told: ‘These notices are part of the fraud prevention program at the DOR. The new tax system has caused a greater volume of notices since it has limited the Department’s ability to evaluate year-over-year returns, a process that helps identify irregularities.’ per Massachusetts Society of CPAs.
This is to verify your identity and information filed on your return. It is not an audit and you may respond by providing requested information. However, contact me so I may verify notices received.
Most requests for information are related to Earned Income Tax Credit claimed on returns. See article link below.
Shanikwa Davis, EA, MST
Principal Owner @ S. Davis Tax Consultants