Gail Buckner’s Last-Minute Tax Tips for 2004

Three Major Retailers to Pay $2.4 Million in Back Sales Taxes to Illinois For Internet Sales

Deficits, Tax Reform Create ‘Important Moment’ for IRS, Everson Says

Tax shelter promoters need to start worrying about going to prison.  With more than 400 investigations of tax shelter promoters under way, Everson said he ultimately expects to see criminal indictments of promoters, “some of whom have been leading practitioners and have crossed a line that they should not have crossed.”

For the past few years, Dana Stahl and I have been discussing the comments that frequently pop up in left wing news stories (New York Times, et al) claiming that all the horror stories about IRS abuses over the years were bogus and that IRS has nothing but the sweetest people working for it and should be allowed to have much more money and power to carry out its function of bringing in money for the exalted Federal government.  That is of course a big load of donkey crap.  I have personally seen many examples of those things that were covered in the news stories and congressional hearings.  If anything, those stories downplayed the true horror of what some people had to endure due to some power-mad IRS personnel.

I liked Dana’s latest take on this.

Yesterday, I attended an Edward Jones tax seminar for year-end tax planning, which was a nationwide telecast.  One segment featured Sheldon Cowan, a former IRS Commissioner.  You may recall the 1997 IRS abuse hearings held by Congress.  Comm. Cowan mentioned those hearings in this interview.  His comment was that the hearings were on the “supposed abuse by the IRS.  And they were just that: supposed.”  He went on the claim these abuses didn’t happen, even citing how lawsuits filed over IRS abuses resulted in no settlement for Taxpayers and in proving there were no abuses.  During the call-in portion of the seminar, I tried to get thru so I could ask the panel (since Cowan wasn’t there) if:  1). why didn’t Cowan give some specific examples of false charges of abuse,  2). what % of the charges were proven to be untrue (10%, 20%, 30% – all of them???), & 3). why weren’t the accusers then charged with perjury, since I understand false testimony before Congress is under oath and subject to various perjury laws.  Unfortunately, the line was busy, but the EJones rep sent a wire instead.  I’m supposed to get a response.  Anyway, just like some prior articles you & I have discussed about how the IRS abuse hearing had false charges leveled against IRS, this matter continues to pop up sometimes.  Nonetheless, I’m interested if anybody will put his money where his mouth is and cite some real examples accordingly.  I’d sure like to find the truth about this matter.

Ohio CPA Dana Stahl has been doing some inquiring of his own to see if the IRS in his state is targeting all 1040Xs with refunds due for full blown audits as they are doing here in Arkansas.  He sent me the following reports over the past few days. 

Mr Guru – I spoke to a TAS rep located in Cleveland whom I’ve worked with previously.  I believe she has integrity and is honest.  She said she has no knowledge of any IRS policy to target 1040X’s w/large refunds.  Her comment was that it has always been IRS policy to review such 1040X’s anyway, but no new trend concerning 1040X’s is afoot inside the IRS, as far as she knows.  So, I guess the mystery deepens.  At least I’ve obtained some evidence from local IRS personnel here in Ohio.

Let’s see what anybody else comes up with.  Based on what my TAS contact said, I’ll carry on with my planned 1040X’s for my problem IRS clients.

 

Let me know,

DS, CPA

Sandusky, OH

This 1040X/audit issue is really getting murky.  My TAS contact from Cleveland seemed to have no idea there was any controversy about this, but you’ve talked directly to IRS people in your neck of the woods who confirmed the IRS is moving into a hard line position with 1040X’s.  Perhaps it really does boil down to the part of the country one resides in.  I’m planning to prepare 1040X’s as part of my process for some IRS problem clients.  As a matter of fact, I prepped one today for a client who had been denied the EIC for her son.  We found that the son’s SS# was incorrect on Sch EIC, so I made the correction on the 1040X.  I can’t imagine this would get my client audited.

We’ll talk again.  Thanx for the heads-up.

DS, CPA

The 1040X/audit controversy doesn’t appear to exist in my part of the country.  As I told you, neither of the IRS people I talked to about this have any idea something brewing within IRS to give a 1040X “the audit treatment”.  What are practitioners saying in other areas of the USA?

Bush discusses plans for Social Security

Read My Lips, Part II? Bush Pledges No Tax Hike to Save Social Security

Consultant Leads Secret Double Life As Internet Sleuth Exposing Tax Scams – This woman spends even more time than I do analyzing and exposing the various tax evasion scams that are spreading around the country among the more gullible of our population.

Q:

Just want to thank you for a well written site. Most CPAs speak a language that no one understands.
 
Where can I go to learn about LLCs?

A:

I’m glad you find my site useful.

Nolo Press (www.nolo.com) has some very good books on LLCs.  I still have one that I received a few years back as part of a self study CPE course I took.

The QuickFinder Small Business Handbook (www.quickfinders.com) has more pages covering LLCs in each year’s edition and I find myself referring to it frequently for most of the basics of how LLCs work.

Good luck.  I hope this helps. 

Kerry Kerstetter