Isn't This Ironic?

[FDNY]

A former Tax Court judge has been indicted for tax evasion.  https://www.justice.gov/opa/pr/former-united-states-tax-court-judge-and-husband-indicted-conspiracy-commit-tax-evasion-and

What amazes me is how she and her husband could even think of deducting such expenses on their Sch C, Pilates lessons, Wine club fees, music lessons, and more.  Then they tried to cover it up for the audit.    You can't make this stuff up, no one would believe anyone could be so stupid. 

[joanmcq]

I saw this a week or two ago. 

And they didn't even know (or follow) the 'hogs get slaughtered' rule of aggressive tax prep.  Maybe they figured they'd never be audited?

[FDNY]

Either that or she was expecting professional courtesy if audited.  

Mind boggling seeing the scope and amounts of the deductions.  This can relate back to the Italian grandmother tribunal and common sense theories we discussed.   They are going to get big hugs and trips to the Leavenworth backyard courtesy of Uncle Sam.

[Max W]

I had an accountant before I got into the tax business who was ex IRS CID and thought he knew all of what he could get away with.

He padded expenses on numerous returns for several years until a couple of his clients got audited.  This led to the IRS to raid his office, ski masks on, guns drawn and hauling off all his records.  He and an associate got million dollar fines and 18 months jail sentences. 

None of the clients were charged.

[Randall]

Amazing.  I've had clients who tell my they know someone who works at IRS or who retired from IRS and this person says they can do this or that.  As if these IRS personnel know all and are the final authority.

 

[Catherine]

2 minutes ago, Randall said:

As if these IRS personnel know all and are the final authority.

How silly!  We all know that it is the barber's brother-in-law who is the FINAL authority on all matters of tax law.

[NECPA in NEBRASKA]

Every new client that I have picked up (or declined after they wouldn't change their ways) that has come from an ex-IRS employee-turned tax preparer has had totally bogus deductions on their returns. It is mind blowing. Most of the returns were marked self-prepared. The last guy that came in had not filed for 6 years because the guy died. I guess he was trying to find another old agent, because he says that one never charged him. He received a very large fee from me.

[RitaB]

1 hour ago, NECPA in NEBRASKA said:

Every new client that I have picked up (or declined after they wouldn't change their ways) that has come from an ex-IRS employee-turned tax preparer has had totally bogus deductions on their returns. It is mind blowing. Most of the returns were marked self-prepared.

My experience as well.  There has been more eye rolling in this office about ex-IRS preparers than anything.  Any.  Thing.  Ever.

The last one I heard was, "My old preparer [deceased, God rest his soul, but might be burning in hell, just saying] would always make an arithmetic error first thing.  That way, the return would get kicked out.  The arithmetic error would be fixed:  Oh, haha, it's just an arithmetic error... And then everything would sail right through.  He was so great, used to work for IRS, you know."

Me:  Yes.  Yes, I know. 

He:  Do you have something in your eye ...  

[Catherine]

33 minutes ago, RitaB said:

Do you have something in your eye ...  

Or a hug in your heart?  

[SaraEA]

I got to know almost a dozen IRS agents who were classmates in my Master's in Taxation program.  They were all smart and very well trained in the law.  They wouldn't get a raise or a step up in their civil service classification when they completed their masters--they were just going to grad school because they wanted to do their jobs better.  (Of course, the gov't was helping pay for it.  But it was a HARD course and A LOT of work, so they had to be interested and dedicated to want to spend two years studying and writing papers and taking exams for no extra pay.)

Does something happen to them when they leave the Service?  Do they suddenly think that since they know what will and won't send up warning flags, they won't get caught?  How can they change mindsets from preventing people from cheating the government to helping them do so?

I've attended many seminars where IRS presenters do everything but scold us.  (Karen Hawkins did everything but spank us.)  I was annoyed because I thought we preparers who stay current, keep our clients honest, know the law, were more akin to IRS agents themselves than we were different. We asked for proof for deductions even if we didn't have to, looked up the Code to see is this or that transaction was allowed, read clients the riot act about amending prior erroneous returns.  Lately, though, I am appalled by the number of arrests the IRS makes of preparers who make things up, steal identities, stiff clients.  I don't know any preparers who do those things. I cannot imagine any of my former classmates doing those things either once they leave the service.  Maybe the former IRS employees whom others in this thread have encountered are former for a reason?

[BulldogTom]

11 hours ago, Catherine said:

How silly!  We all know that it is the barber's brother-in-law who is the FINAL authority on all matters of tax law.

Are you talkin'  'bout Jerome, Peggy Sue the hairdresser's husband from Tennessee?

Tom
Newark, CA

[mcb39]

I have to tell you about the agent who has been conducting our in-house audit.  (finished, finally).  Last week she told me that after 2015, I could no longer get a POA to represent my clients before the IRS.  She said that she had just seen an e-mail come in about it.  I told her that unless something had just recently been passed, she might be incorrect about it.  I then explained to her in depth about the ins and outs of the RTFP and the AFSP.  I told her that because I had passed the RTRP; I had to have at least 15 hours of continuing education under my belt each year in order to receive my AFSP certificate; which gives me limited POA powers.  On the other hand, a preparer with a PTIN could take a test each year and get the 15 hours of CE and would also qualify for an AFSP.  She went back and discussed the conversation with her boss.  He said that they were having a seminar on the subject yesterday morning and that since she was so knowledgeable about it, she could conduct the seminar.  Which she did and was gracious enough to call and thank me for educating her.  She has "only" been an IRS agent for six years.

I am always ready to concede that I might be wrong, but in this case I was not.  

[RitaB]

12 hours ago, SaraEA said:

Maybe the former IRS employees whom others in this thread have encountered are former for a reason?

Yep.  I don't think these I've encountered did a good job anywhere. 

[taxxcpa]

One ex-IRS tax preparer would show, in parenthesis, "ill health" by the husband's or the wife's occupation.  Net to the depreciation on his own return, he had his car listed and after the model he had "bad shape"  I suppose he thought the IRS might take those comments to explain why they didn't need to audit those returns

[RitaB]

15 minutes ago, taxxcpa said:

One ex-IRS tax preparer would show, in parenthesis, "ill health" by the husband's or the wife's occupation.  Net to the depreciation on his own return, he had his car listed and after the model he had "bad shape"  I suppose he thought the IRS might take those comments to explain why they didn't need to audit those returns

On gross income Sch C did he put, "I didn't really make anything this year"?

[taxxcpa]

1 hour ago, RitaB said:

On gross income Sch C did he put, "I didn't really make anything this year"?

No.  He always showed a small profit

[JohnH]

4 hours ago, taxxcpa said:

One ex-IRS tax preparer would show, in parenthesis, "ill health" by the husband's or the wife's occupation.  Net to the depreciation on his own return, he had his car listed and after the model he had "bad shape"  I suppose he thought the IRS might take those comments to explain why they didn't need to audit those returns

Interesting.  I think I'll start showing my occupation as "Accountant  (Semi-Retired) (Marginally Profitable)"  and see what happens.  Will let everyone know.

[Jack from Ohio]

11 hours ago, mcb39 said:

I have to tell you about the agent who has been conducting our in-house audit.  (finished, finally).  Last week she told me that after 2015, I could no longer get a POA to represent my clients before the IRS.  She said that she had just seen an e-mail come in about it.  I told her that unless something had just recently been passed, she might be incorrect about it.  I then explained to her in depth about the ins and outs of the RTFP and the AFSP.  I told her that because I had passed the RTRP; I had to have at least 15 hours of continuing education under my belt each year in order to receive my AFSP certificate; which gives me limited POA powers.  On the other hand, a preparer with a PTIN could take a test each year and get the 15 hours of CE and would also qualify for an AFSP.  She went back and discussed the conversation with her boss.  He said that they were having a seminar on the subject yesterday morning and that since she was so knowledgeable about it, she could conduct the seminar.  Which she did and was gracious enough to call and thank me for educating her.  She has "only" been an IRS agent for six years.

I am always ready to concede that I might be wrong, but in this case I was not.  

She is correct.  After Jan. 1, 2015, only E.A.s, Attorneys or CPA may use a POA to have in depth dealings with the IRS for your client.  AFSP only gives you rights for the IRS to "discuss" the tax return.  The IRS has turned the RTRP & AFSP into a total joke.

No possibility of representing your clients in any manner before the IRS.

[Jack from Ohio]

23 hours ago, SaraEA said:

I've attended many seminars where IRS presenters do everything but scold us.  (Karen Hawkins did everything but spank us.) 

I was never so glad to see a government employee retire in my entire life as I was when she retired. (Current POTUS probably does rank higher, but he has no choice about leaving)

She was a very vocal "enemy" of all us honest tax preparers.

[mcb39]

11 hours ago, Jack from Ohio said:

She is correct.  After Jan. 1, 2015, only E.A.s, Attorneys or CPA may use a POA to have in depth dealings with the IRS for your client.  AFSP only gives you rights for the IRS to "discuss" the tax return.  The IRS has turned the RTRP & AFSP into a total joke.

No possibility of representing your clients in any manner before the IRS.

Jack, I did say "limited".  Also, this is 2016 and they did issue me a POA to represent this client in the audit of 2013 and 2014.  I also got one just last week for a client who was being adjusted for 2012.  That was the "divorce from hell" year.