Tuesday, October 18, 2011

Last minute notes

October 15th (17th this year) is a huge date for us in the tax realm. It’s the final extended due date for late filers to get their tax returns in on time. While April 15th gets a lot of publicity, historically October has been busier for our firm than April due to all the folks who go on extension. Some extend because they can’t get all their info to us by April 15th, but many are simply procrastinators who wait until the last minute to file.

Want to drive your CPA crazy? Here are some tips on how to do it:

1) Ignore for months the requests for missing information until October 13, and then insist on filing on time.
2) Telephone on 10/15 and insist on talking to your preparer to confirm that the front desk transmitted your tax return.
3) If we had to delay working on your non tax deadline work until after the tax deadline, be sure and call the next day and ask when it will be finished.
4) Plan on picking up and signing for your returns at 5PM on the 15th.
5) If you are looking for a new preparer, start calling at 4pm on 10/15 asking about prices and if we can prepare it on time.
6) Get your taxes done early, but wait until 10/15 to review them and call us with questions.

Our season went well this year, but we had our share of all of the above. As a result I will be spending several upcoming weekends in the Eastern Sierras reconnecting with the outdoors for some needed R&R. There are still areas up there without cellular service, and I intend to find them.

Monday, October 17, 2011

False Tax Returns = Prison

Sometimes at the slightest hint of a problem with their taxes, clients’ fear of the government prompts them to ask “I won’t go to prison, will I?” If you make an honest mistake or have a unique situation where the facts aren’t entirely clear, you may be facing some penalties and interest, but you needn’t be worried about jail time.

However a recent case decided in District court picked up a couple local business people who went too far… two adult entertainment execs from Cypress, CA plead guilty to deliberately falsifying tax returns. The business, Universal Media Management was in the business of providing live adult entertainment to customers for cash payments (I thought that was illegal in California anyway). Apparently that cash was deliberately underreported, and caused the business to underpay its taxes by about $140,000, and the owner of the business underreported his taxes by $33,000.

The key here is DELIBERATELY, and for their efforts the two responsible, the owner and a key employee, are both facing up to 3 years of quality time in Federal housing.