It’s a great day here at O’Hare Associates, and as the weeks pass and we start to look towards April 15th and the collective sigh of relief, I wanted to reiterate to all of you that you can never document too much. After decades of dealing with the IRS as a tax professional, I’ve come to the conclusion that while some of those folks are mean-spirited, many of them are really “normal”.
You know what worries me about “normal”? It’s a perfectly normal person that loses your luggage at the airport. A normal person made my sandwich wrong the other day at the deli. A normal person hit my wife’s car last month in the Hannaford parking lot.
Normal can be trouble.
Let’s take a look at a client from years ago who had suffered a large tax liability in the real estate meltdown and as a result, could not pay anywhere near what he owed. Now, the IRS agreed to let him make payments – surprisingly over a period of years instead of just quarters, and this person did. While he could have, and probably should have, declared bankruptcy, he felt that was the wrong thing and so he slogged his way back to solvency.
Every month, he sent a check to the IRS and documented that in his own paperwork. After three years, he had finally paid down his debt and sent in the last check.
Our beloved IRS had lost his paperwork and told him to simply keep making payments until they figured it out.
Many of you, who know me, know how I would react to such lunacy. Now, years later with the benefit of hindsight and a few more years under my belt and I can see that the reaction of the IRS was perfectly “normal.” Not right, but not unexpected. The truly fortunate thing was that this man had documented every payment every step of the way and when the IRS couldn’t keep track, he could. That one habit – documentation – saved him thousands of dollars and who knows how much stress.
…And that is when you need a tax expert to make sure that you keep your money and don’t misspend one penny of it. Remember, taxes are enforced extractions and NOT voluntary contributions.
How do we do that? Well, as you might expect, copious documentation and clear communication. We make sure that our clients know the standards of the tax code – all 74,000 pages of it. The number of business deductions available to small companies in the LLC, S-, and C- corporate designations are immense and to expect any normal person to know all these – or even your average desktop software – is asking too much.
So I’m not “normal”, and my teenage kids don’t even think I’m “cool”, anymore, but I’m okay with that. The sheer amount of continuing education that we take on as tax professionals each year is prodigious and covers so much more than a software update. The great news is that we speak in plain language to our clients on what their best moves are for their tax liability and we help them in using a system that they can truly benefit from.
Now, to get back to “normal” – it is February. Most of us, especially in the middle of a New England winter, cannot focus on the idea of Spring or that April 15th is just around the corner. My suggestions? Now is a good time to be abnormal and go ahead and schedule an appointment to start sorting out 2016’s returns. Call our office, (855) 479-2400 and schedule a meeting that can take all the worry away and give you a clear strategy for this year’s return and an amazing plan as we look forward to 2017.