Tax season musings
Ah, it’s January already. Time to prune my fruit trees and look forward to the Superbowl party. Hopefully there is time to broadcast it between all the ads for Turbotax, H&R Block and the latest rich guys running for President. Personally I agree with President Eisenhower who said that the only way to get rich in politics is to be a crook. But what about if you’re rich before you get into politics? Are you still a crook? But I digress… This time of year IRS puts out some public service announcements to help folks avoid problems getting their taxes filed. The recent entry in the field is an announcement warning the public to avoid “ghost preparers” when hiring someone to do your taxes. A ghost preparer is someone who does not sign your return as a preparer. They don’t follow the rules that the rest of the professional community is bound by. They often work for cash, aren’t listed anywhere, and may overstate deductions and misstate tax liabilities. They aren’t licensed or as knowledgeable as seasoned tax preparers. When the proverbial fecal material hits the fan they disappear. We had a person come into our office last week that had such a problem. The taxpayer had a body shop he sold several years ago. He paid a woman who worked out of her apartment to file his taxes. He did not keep copies of the filings. He is now retired on disability and living on a shoestring. He received a letter from the Franchise Tax Board claiming he never filed his California returns for 2008 and 2012. They want over $9,000 in taxes and penalties. He has no records, and the preparer has disappeared. He still has some options, but none are good. If he had used a legitimate firm to help with his taxes he might be able to prove he filed the missing returns, or at least calculate the correct amount of tax. With no records and nobody to fall back on he is not in a good place.