Top 10 Questions to ask when Hiring a Tax Pro

There are a lot of very good reasons for hiring a tax professional, especially this year.   But there are many who don’t see it that way.  My take is that anyone can put numbers in boxes when using a software package or online  product, but if you don’t understand the questions, you can’t possibly give the right answers.  In addition, there are always special cases, and there is no generic product that can be everything to all people.

If you are considering working with a tax professional, the time to start interviewing one is immediately.  There are important questions to ask.  Download this free guide to help you choose a tax pro: Top Ten Questions To AskWhen Hiring A Tax Pro

Until next time………

 

BEWARE OF POP-UP TAX OFFICES THIS TAX SEASON!

With all of the data breaches, hackings and other things we need to worry about, let me add one more to the list – pop-up tax offices.  With tax season approaching, here’s something to think about:

What if the tax office you are sitting in isn’t a real tax office, but a bunch of scammers using a new ploy to get your personal information and steal your refund?  Yes, you might walk out with a prepared tax return, but what if the “preparer” changes the return after you left? Perhaps the scammer changed the banking information on your refund.  Perhaps the scammer inflated your deductions like mortgage interest, charitable donations, etc.  There’s your quick ticket to an IRS audit.  Not to mention, you will never see your refund.

Beware of who is preparing your tax return.  See if they are credentialed (Enrolled Agent, CPA, tax attorney), and have been in business for a while.  Or are they unlicensed preparers using copies of software they got at a local office supply store (not meant for paid preparation), and not signing the tax return (which is illegal!).  Look at page 2 of your Form 1040.  If your tax return says “Self-Prepared” in the “Prepared By” box, there’s your first sign that you did not go to a legitimate preparer, but to a potential identity thief.

If you are waiting on a refund that never shows up, or if you get a letter from the IRS questioning your tax return, you need to contact the IRS immediately to sort out any issues.  If your identity was in fact stolen, there are steps to take.  When you are terrified, you can’t think straight, so I  put together my latest book to help you navigate.  For more information, visit RealLifeTaxAdvice.com, for Combat Identity Theft:  The Workbook.  You’ll receive an immediate PDF download explaining how tax-related identity theft can happen, and the exact steps you need to take to regain your identity (and your sanity!).  No need to scramble trying to figure out what to do – get the clear, concise steps in one place.  Easy to understand, with journal space to write out exactly when you made certain calls and sent paperwork to the taxing authorities, and other things to look out for.

Until next time, stay safe!

P.S. — The Quickbooks Connect conference was awesome!  I taught my signature class “Tax Bootcamp for the Self-Employed”, and we had a blast!  Great audience of self-employed people who wanted to learn (TONS of questions!), as well as tax professionals who wanted to learn more about self-employment for themselves and their clients.  All in all, an incredible conference; Intuit ran it like clockwork.

Tax pro Abby Eisenkraft @ QuickBooks Connect Conference in San Jose

QuickBooks Connect Conference – soundcheck

Want to connect with Tax Pro Abby?  Email abby@RealLifeTaxAdvice.com.

Visit RealLifeTaxAdvice.com for free checklists and other goodies.  The online store has the latest ebook “Combat Tax Related Identity Theft:  The Workbook” as well as other great products.

Check my site for upcoming Events.

Looking to book Abby for your conference, class or show?  Email Team@RealLifeTaxAdvice.com and a scheduler will call you back same day.

The rules apply to ALL of us!

You haven’t heard much from me lately, but not because I haven’t been talking tax.  I’m ALWAYS talking tax, and it’s been a busy few weeks.  I attended a Publicity Summit which had me in front of close to 100 media people from the worlds of TV, radio, etc.  The highlight was meeting Ed Tyll.  He has a show on Star Com Network, and he’s awesome.  It’s been an honor to be his guest over 6 times now, and this is the first time we met in person.

Last week on his show, we discussed the Manafort & Gates indictment and foreign bank account rules.  He asked me what does the person sitting at the red light listening to this show have to worry about?  And I said plenty – the foreign account rules are nothing to mess with.  These rules can be very confusing, but this is an area I have been practicing in for a long time.  And the day I heard about the indictment, I thought about all of the clients who complain when I talk to each and every one of them about this topic and interview them carefully.  And my social media post that day – YOU’RE WELCOME!!!!  I’M TOUGH FOR A REASON!  There are a lot of people who don’t understand the filing requirements and fail to report their foreign accounts.  And while they don’t have tens of millions in their accounts like Mr. Manafort, having an account overseas of any size requires some level of reporting.  If you are one of these people  who didn’t realize you had to report them, there may be an opportunity for an amnesty program.  You may want to set up a consultation with me or your tax pro.

I am in the process of putting together a great class/webinar about Foreign Account Basics which will be out in the new year.  I usually teach International Taxation Basics to tax preparers, but it’s time I bring this important information to everybody.  You need to know this in case your preparer does not.  If you want to get on the list for early release and a discount, send an email to Team@RealLifeTaxAdvice.com and tell me you are interested so we can get you on the list.

In the meantime – here are 5 quick things I will share with you now that you need to know:

  • If you are a U.S. citizen, resident, green card holder (and there  are more categories that I will share with you in the class) – you have to report EVERY bank account if together, the highest balance in all of the accounts during the tax year add up to $10,000 USD.  This is in aggregate, and I will have worksheets for you in the new product to help you properly calculate this.
  • Even if all of your overseas accounts in aggregate are < $10,000, you still need to report the account on Schedule B.
  • The Foreign Account report must be electronically filed. Absolutely no paper filings allowed.
  • If you have family overseas and are listed on the account, perhaps just to help a parent, but it’s not your account – you still must report it.
  • Don’t forget about overseas pensions from a previous job.  Even if you can’t touch the money until you are older, it’s still reportable.

I’m off to the QuickBooks Connect conference to speak on 11/16 in San Jose.  And I’ll be speaking in NYC on 11/30 for the IRS & SBA – Tax Bootcamp for Small Business – FREE class, not to be missed!

Check the Events page at RealLifeTaxAdvice.com to learn more.

Until next time………..

Equifax, Data Breaches, and the IRS

Today, an executive from Equifax testified in front of Congress.  And some of the Congressmen actually figured out the truth — that this breach has far-reaching effects that won’t end.  The information that was stolen will be as valuable in 3 years as it is today, so it’s not a matter of “if”, but it’s a matter of “when” a cyber thief does something with your personal information.  What a mess!

I’ve been doing a great deal of speaking on the topic of IRS Scams and Identity Theft.  On Thursday, 10/5 at 10 AM, I will be doing the last webinar for CPA Academy in a series of 4 that I have done this year alone.  It’s free and open to all — you do not need to be a tax professional to attend.  Already, over 1,200 people have registered for my last class in this series, so you can tell people are worried and want to know what to do.  Grab your seat here:  https://www.cpaacademy.org/webinars/a0D4400000RpERcEAN

In every virtual class, we have had over 1,000+ people sign up, and it’s not because I am popular.  You have to learn the signs and how to deal with what  is going on with the cyber thieves, IRS scammers, etc.  So many people think they would never fall for these scams, but these fraudsters have learned the lingo and are master manipulators, and smart people get taken in.  There are social security scams, bank scams, tax software scams, student scams, Better Business Bureau scams — you name it, and it’s out there.   I teach people best practices so they are prepared.  But there are some things you can’t prepare for — like Equifax.

If the scammers prepare and file a fraudulent tax return using your information, you will be the victim of tax-related identity theft.  There are some important steps to take to deal with it, and I assure you, the last thing you want to do when it happens is to start running around, Googling this and that.  I have created an ebook to serve as a guide and workbook to help with the EXACT steps to take should you become the victim.  And it costs less than 1 month of credit monitoring, which won’t do you any good when it comes to tax-related identity theft (but it’s still a good thing to have).

Visit RealLifeTaxAdvice.com and reserve your copy now.  It’s on pre-order and will be out before the end of October.

Until next time…………

Identity Theft – the fun never ends…………

IRS Scams & Identity Theft

 

Please join me for a free webinar hosted by CPA Academy.  These webinars are open to ALL, and will feature some great information to keep you, your family and your business SAFE.

Irsscams choice

IRS SCAMS & IDENTITY THEFT: SUREFIRE WAYS TO SPOT THE LATEST TRENDS

Available Date(s)Wednesday, September 6, 2017
Wednesday, September 20, 2017
Thursday, October 5, 2017

 

Start Time

10:00 AM EDT

CostFree  CPE Credits1.0 hour  

Course Description:

 

Abby Eisenkraft is back with new information on the latest IRS Scams and Identity Theft, which are more of a threat on a daily basis. New, more sophisticated scams have emerged, targeting tax professionals, businesses and the public. Let’s familiarize ourselves with the latest and greatest known scams, to protect ourselves and our clients.

Learning Objectives
  • Review the latest email scams targeted at tax professionals and businesses (business email compromises, BBB scams, etc.)
  • Discuss the new phone scams and the current targets (hint: it’s not just older Americans)
  • Best practices for our businesses to stay safe (including IT tips for small offices.)
  • How to spot fake IRS notices and fraudulent emails.
  • Refresher on identity theft procedures – the necessary steps to take if you or your client become a victim.

Please join me — I promise you will hear lots of useful information.  And don’t forget to visit RealLifeTaxAdvice.com, as we will be releasing some great products to help you stay safe.

Until next time…………..

IRS SECRETS?

I get really angry when I see books or advertisements from alleged former IRS agents whose big sell is that they will let you in on the “secrets” of the IRS.  Do not fall for this!  There aren’t any “secrets”.  You only need to follow the tax law – it’s that simple.  Some people want to bend the truth and convince you that you can get away with something because THEY have the inside scoop.

I remember a discussion I had with an IRS agent a few years ago while representing a client who was in tax trouble.  The client went to a preparer who promoted himself as a former IRS employee, and this IRS employee-turned-preparer filed fraudulent returns with this supposed “insider knowledge”.  Everyone who was a client of this preparer got in trouble with the IRS and owed significant amounts, to be paid back with interest and penalties.  I asked the IRS agent where this genius preparer was now, and he told me the guy fled overseas and they were working on extraditing him.  He was going to face some harsh consequences.

Legitimate tax professionals take hours and hours of continuing education each year, including ethics.  They go above and beyond to raise the standard of their license requirements.  They don’t need to resort to false advertising and fake refunds to get clients.  The objective is to prepare returns correctly, and keep your clients out of trouble.  We are here to follow the law, and many of these “former IRS” people try to make themselves out to be something they are not, in order to sell books or engage in fraudulent schemes to dupe the public.

I want to sell books too, and in my book “101 Ways to Stay Off the IRS Radar”, I discuss the tax mistakes to avoid based on the tax law, and I don’t mislead people with fake information.  The book was in the Top 50 this week on Amazon, so clearly, I’m not the only one who thinks some of these people marketing “IRS secrets” are not all that.

And don’t get me started on those TV ads.  I’ve had clients who came to me after they lost over $10,000 to these companies who did NOTHING.

Remember the woman on TV who promised “pennies on the dollar” for IRS settlements?  She’s in jail now…….

Enough said.

I’ll be doing some free webinars, as well as some appearances across the country.  Check the website for locations and other information.

Until next time…………..

101 Ways to Stay Off the IRS Radar

What you don’t know…….

Another post “from the other side of the desk”:

Sometimes you talk to a client and have to shake your head.  I was brought in to consult with a new client on a particular matter, and reviewed her self-prepared tax return.   After chatting and getting some background, it was apparent the client made a mistake on her tax return.  I caught a very serious error, and brought it to her attention.  It had no bearing on the matter I was brought in to consult on, but due to the fact that the omission brings a massive penalty if the IRS catches it first, I advised her of the issue.

Now, I wasn’t looking for a parade, but her response left me stunned.  She said according to her research, she was under the $400K threshold and didn’t have to file a Foreign Account Report.  She had no idea what she was talking about, because the foreign account reporting threshold is $10,000, and she was confusing FATCA laws for a married couple residing outside of the U.S. with FBAR rules.  (Note  — in this profession, there’s an acronym for everything!)

I told her she was incorrect and was confusing the tax law.  But the part that left me stunned was this: she said the software didn’t prompt her to enter this information, so I MUST be wrong and she doesn’t believe me.  In her mind, if the software didn’t raise the point, then there is no need to report the information.  The software is the end-all for self-preppers and is infallible.

Unbelievable.

When most people learn about an error, they usually want to do everything to fix it ASAP.  And those are the people a tax professional wants to work with.  It’s not a matter of who’s right/who’s wrong, but of protecting clients from their worst instincts.

We have a saying in our industry – “you can’t care more than your client”.  Now, I am guilty of this one frequently.  I enjoy helping people and care greatly about the work I do. Sometimes one just has to accept that there are people who absolutely don’t care about the tax mistakes they make, and the consequences, potential and actual.  Not sure how they sleep at night.

As for the client who refused to listen to me regarding the foreign account reporting and millions like her, the IRS is spending massive amounts of money in the area of overseas account reporting, doing more prosecutions and involving their Criminal Investigation Division.  Perhaps she may find her research was less than stellar after all.  And I can see it now – she’ll tell the IRS they are wrong, since the software never prompted her.

As my most revered mentor would always say – GARBAGE IN, GARBAGE OUT!

Until next time…………..

P.S. — Don’t forget to check out RealLifeTaxAdvice.com.  I will be doing some free webinars, and there are a number of upcoming appearances.

Roses are red………

Flying high now — “101 Ways to Stay Off the IRS Radar” is #3 in Kindle sales today.  The other day, the print book was #74.  Why am I happy?  Because it’s legit. And here comes my tirade on ethics.

When I first wrote my book, all of these “marketers”, “gurus”, “consultants”, “agents”, etc., got in my face and said they could make my book go to #1.  How?  By charging me some exorbitant amount of money and putting me in some nutty category, like Women’s Poetry or Women Writers, etc..  I said no way.  I want to be in the category of taxes, personal finances, etc.  And these “experts” bragged about how THEIR books are bestsellers.  But it’s fake.  And who wants to be a fake #1?  Not me.  Because no gold seal would make me feel good if that’s how it was acquired.

I read a hilarious story about a guy who wanted to prove anyone could have a #1 bestseller by messing with the Amazon categories, and he actually got his book to #1.  Did I mention it was just 1 page and he took a picture of his foot?  I think it was called “Putting My Foot Down”.  (I love that title…..)  And now he adds “Best-Selling Author” to his resume.

My feet belong in the sand; I am not a poet; and I don’t want to make it to #1 that way.  And if #3 is the best I do, that’s fine too.  My goal was to educate and bring tax information in a fun and interesting manner, and I believe I did that.  I don’t need a gold seal.  Would I love one? — sure!  But at this point in my life, I can ignore the parasites and keep on moving forward.  I am not trying to say that I’m Mother Teresa, but I believe that ethics count.

A huge thank you to all who have read the book.  And don’t forget to grab my free report on the 10 Surefire Ways to Spot an IRS scam, available at RealLifeTaxAdvice.com.

Dance Moms – Abby Lee Miller definitely needs “101 Ways to Stay Off the IRS Radar”

Saturday was a breeze.  So I should have taken that as an indication Sunday would be a disaster, as I wasn’t getting off the hook that easily.  Somehow, I held out  hope.  But I was wrong.  On the second day of my media bootcamp class, it was one of those days when your head gets chopped off, gets handed back to you on a platter, and you are supposed to say thank you.  However, I definitely subscribe to the “whatever doesn’t kill you” school, so I’m still standing and that much better for it.

After class, it was off to Starbucks for a cool reward, but the iced tea/lemonade mix tasted like household cleaning products……ugh….…

And since disasters come in three’s, I was fortunate that #3 was just a really, really long, endless wait for a bus.

In class, the chatter was all about a prison term for the host of Dance Moms.  Now, I don’t watch those shows, although I will admit my one guilty reality show pleasure was Hollywood Hillbillies, which I stumbled upon right before it was cancelled.  For anyone who hasn’t seen it, it was a show created for this strange kid who became a YouTube sensation, but he became overshadowed by every other crazy family member he had.  It was hilarious.  But back to Dance Moms.

It’s unfortunate Abby Lee Miller didn’t read my book “101 Ways to Stay Off the IRS Radar”.  This is not a shameless plug; I sincerely believe if she would have checked out some of the ways, she might have made some better choices.  So let’s look at the charges:

  • Unreported income – Ms. Miller had a pending bankruptcy case and never included the income from the Dance Moms TV show (reportedly she tried to hide $775,000).  The judge was channel surfing and found the show by accident.  Chapter 1 in my book discusses cash businesses (Way #1), “off- the-books” (Way #2), and if your low income makes sense (Way #3).  Newsflash to no one:  The judge didn’t think the low income she claimed, as noted in her bankruptcy paperwork, made sense for someone with a TV show.
  • Moving money to someone else – otherwise known as a “fraudulent conveyance” – see Way #21. You can’t transfer your assets to a relative or friend with the intent to hide money.  People try it all the time, but you will get tripped up.  It’s illegal.  And not the least bit original.
  • Unreported cash – Abby Lee Miller reportedly brought in over $10,000 to the U.S. in foreign currency without reporting it.  Way #10 discusses the Bank Secrecy Act, which mandates that deposits, withdrawals, transfers, etc. in excess of $10,000 requires a Currency Transaction Report.  In addition, Way #24 talks about foreign bank accounts (sounds like having thousands of dollars in foreign currency may have come from a bank account).

Disclaimer:  I don’t know Ms. Miller, I am not an attorney, nor have I seen in person the evidence the authorities had against her.  And I still haven’t ever watched the show.

She’s not the first or last person ignorant of tax, banking and financial laws.  Maybe I’ll send her something to read……..

For you others with less time on your hands than she has, and would prefer to keep it that way, 101 Ways to Stay Off the IRS Radar is available for free in Kindle Unlimited; it’s $4.99 for regular Kindle, and only $14.95 for print.

Time for Tax Planning

Okay, I admit it.  I feed this squirrel, which is why he’s hanging out and staring me down.  I suppose I fascinate him, because every time he sees me, I’m working.  Perhaps he feels sorry for me.  Or he’s just hungry again.

He’s shaken me down for enough food that he’s set for the winter.  He’s got nothing to worry about, except for the neighbor’s cat, who I also feed.  (He prefers to eat at my house than his own.)  Too bad none of these dependents make it to my tax return.  Which of course, brings me to next year’s tax return.

The squirrel is all set for the year, but are you?  Have you done any tax planning?  Or do you think all you need to do is toss your documents at your preparer in April?  Will there be tears and tantrums if you get a big tax bill instead of a big refund?  Without planning, where do you stand?  There are changes every year to take into account.   Some people get married and are surprised by a large tax bill, because the things that worked when they were single suddenly do not work now as they are in a higher tax bracket, and they have a huge balance due.  Others have more deductions available to them during the tax year (perhaps large donations, a new dependent, a new house purchase bringing  real estate taxes and mortgage interest paid, for example), and they can adjust their allowances at work to have more money now in each paycheck, as opposed to a large refund.

Even if you prepare your own tax returns, it’s a good idea to do planning, perhaps even with a tax professional, to get some perspective on where you stand now, and to put any necessary changes in motion before the end of the year.  Once December 31st comes, it’s all over.  The window of opportunity has closed on almost everything.

Ready for some planning?  Time to pull out your important paperwork – paystubs, account statements, donation receipts, last year’s tax return, etc. and give yourself some interrupted time.

Here are some of the things to look at:

  • Is your withholding at work sufficient? Did you start a new job and submit a correct Form W-4?  Compare the withholding to last year’s salary.
  • Any major changes you should take into consideration? For example, marriage/divorce; large salary change; the sale of any restricted stock options, etc.
  • Will you max out your retirement plan at work by year end?
  • Will you fully fund an IRA by the deadline?
  • If you have children, do you have a 529 plan in place for their education? How much have you contributed so far this year?
  • Do you have any overseas accounts that will involve you chasing down statements that might take some time?
  • Cleaning out the garage? Have you valued the donations using a reasonable valuation guide for the fair market  value and attached a list to the signed and dated donation receipt?
  • Self-employed? Those books and records need to be in order NOW.  Estimated taxes need to be paid and they are based on net profit.

The takeaway here is that you can’t chase these things down next April and expect a positive outcome.  A little bit of planning now will plant the seeds for a peaceful tax filing, with better results, since your receipts will be organized and you know where you stand.

And speaking of receipts, if you have fading receipts, it’s time to digitize them before they are blank.  If you walk into an IRS audit with a faded or blank receipt, the IRS will allow you exactly what they can see – nothing.  As I always say, a scanner is your best friend.  One of the best investments you can make.

Time to go feed the squirrel, before the neighbor’s cat shows up.  Happy planning!