Non reported Income by tax preparers

[justmenmom]

Hi -

 

 

I was just wondering if there was any way the IRS can find out if a tax preparer under report or do not report their income at all. I volunteered for an office and it amazes me that they bragged about maximizing their income by not  reporting it.  

 

Thanks -

Justin

[Jack from Ohio]

Hi -

 

 

I was just wondering if there was any way the IRS can find out if a tax preparer under report or do not report their income at all. I volunteered for an office and it amazes me that they bragged about maximizing their income by not  reporting it.  

 

Thanks -

Justin

Such is the reason us honest and ethical tax preparers are having to deal with so much IRS male bovine scat!!  I would turn them in.  File form 3949-A and sleep well at night!!

[kcjenkins]

I was just wondering if there was any way the IRS can find out if a tax preparer under report or do not report their income at all. 

Thanks -

Justin

Of course they can, if they want to.  They have your PTIN on every return, after all.  

[taxxcpa]

Although they have your PTIN, they don't always know what you charged, and even if every return had the tax preparation fee on them, the IRS isn't likely to add them all up unless they have a reason to suspect you aren't reporting everything.

 

It would be possible to omit all or many cash payments.  Even if all fees were paid by check, you could cash the checks at the bank on which they were drawn.

 

The risk would not be if you left off 10% of your income, but if you left off 50% or if you were investigated for something else, maybe something you were not guilty of, it could look fishy.  

 

Once I did a sales tax audit of a man whose invoices indicated that he charged the correct tax on every income.  Then I looked at his sales tax returns and some of the individual invoices had more tax changed than he reported for the entire quarter. 

 

His excuse was "you just can't hire good help nowdays." and blamed it all on his bookkeeper.

[Richcpaman]

Just:

 

You are new here.  Something troubling you about the folks you work for?  Looking for validation?  You can get it here.

 

I told one of my landscaping clients that *none* of my income is reported the IRS.  NONE.  I could say that I made whatever I wanted.  The checks come to me, made out to Rich, CPA, or Rich CPA LLC, or just Rich. 

 

So I could deposit them anywhere and to any account I wanted.

 

I DON'T.  I report all of it.  And my O&N expenses.

 

If I get audited, and the IRS finds out I am up to something fishy, then they can do things that destroy my business, and I am not interested in having that happen.

 

So, if someone is looking for short term gain by not reporting all their accounting revenues, in the long run, you will be caught up in it also. 

 

Rich

[Jack from Ohio]

Just:

 

You are new here.  Something troubling you about the folks you work for?  Looking for validation?  You can get it here.

 

I told one of my landscaping clients that *none* of my income is reported the IRS.  NONE.  I could say that I made whatever I wanted.  The checks come to me, made out to Rich, CPA, or Rich CPA LLC, or just Rich. 

 

So I could deposit them anywhere and to any account I wanted.

 

I DON'T.  I report all of it.  And my O&N expenses.

 

If I get audited, and the IRS finds out I am up to something fishy, then they can do things that destroy my business, and I am not interested in having that happen.

 

So, if someone is looking for short term gain by not reporting all their accounting revenues, in the long run, you will be caught up in it also. 

 

Rich

You may have been able to hide income in the 60s, 70s, and 80s but not in 2014.  First step in any audit is providing the IRS ALL bank account statements.  If the total amount of all deposits is greater than the income claimed on the tax return, then the audit will be LONG and sticky.

 

You can run, but in 2014, you can't hide.

 

[taxxcpa]

The IRS might look at your bank statements, so to keep the total low, take checks to the bank of the client and cash them.  Pay all of your grocery bills in cash and report income that equals or slightly exceeds your deposits.

 

There is no way the IRS can catch all cheaters.  Anyone who does not get a W-2 or 1099 for all of his income can cheat, but if you cheat too much, the IRS can add up all of your living expenses and if they exceed your income, you would be in trouble.

 

I had a semi-retired lawyer client who only reported about $7000 income back 25 or 30 years ago.  The IRS assessed him more tax based on their calculation of his cost of living.

[Jack from Ohio]

The IRS might look at your bank statements, so to keep the total low, take checks to the bank of the client and cash them.  Pay all of your grocery bills in cash and report income that equals or slightly exceeds your deposits.

Refresh my memory, but doesn't the regulation say that you are to report ALL income?  As a CPA, instructing people how to circumvent the regs is a Circular 230 violation, and more importantly, a HUGE indicator of what your ethical and honesty base is?

[mcb39]

The IRS might look at your bank statements, so to keep the total low, take checks to the bank of the client and cash them.  Pay all of your grocery bills in cash and report income that equals or slightly exceeds your deposits.

 

There is no way the IRS can catch all cheaters.  Anyone who does not get a W-2 or 1099 for all of his income can cheat, but if you cheat too much, the IRS can add up all of your living expenses and if they exceed your income, you would be in trouble.

 

I had a semi-retired lawyer client who only reported about $7000 income back 25 or 30 years ago.  The IRS assessed him more tax

based on their calculation of his cost of living.

 

I couldn't believe that I was reading this correctly.  Surely it was posted tongue in cheek.  I do pay for all my groceries with cash; but each one of those cash payments is carefully recorded as Income.  I never "deposit" the cash, but it is becoming less and less each year.  That is my spending money for the year; but every penny of it is included in Total Income before deductions.

[RitaB]

I couldn't believe that I was reading this correctly.  Surely it was posted tongue in cheek.  I do pay for all my groceries with cash; but each one of those cash payments is carefully recorded as Income.  I never "deposit" the cash, but it is becoming less and less each year.  That is my spending money for the year; but every penny of it is included in Total Income before deductions.

 

It was tongue in cheek, and spot on.  I got a new client yesterday that told me the lady giving her record keeping advice (not an accountant) told her not to record the cash.  I told her what I thought about that.  It aggravates the living daylights out of me, and it is cheating.  My guess is it happens all the time.  And people get away with it.  I think a great number of them also receive entitlements. 

 

Wow, now I just want to go home and eat donuts.

[jklcpa]

It was tongue in cheek, and spot on.  I got a new client yesterday that told me the lady giving her record keeping advice (not an accountant) told her not to record the cash.  I told her what I thought about that.  It aggravates the living daylights out of me, and it is cheating.  My guess is it happens all the time.  And people get away with it.  I think a great number of them also receive entitlements. 

 

Wow, now I just want to go home and eat donuts.

 

 

^ that, exactly.  Atticus is one of our long time members that would never suggest that someone cheat like that.

 

Hmm, donuts...time to eat the donuts. Thanks for that suggestion, Rita.

[Jack from Ohio]

^ that, exactly.  Atticus is one of our long time members that would never suggest that someone cheat like that.

Evidence speaks to the contrary.  I stand by my post.

[MAMalody]

<<<Hmm, donuts...time to eat the donuts.>>>

 

Well, donuts are holy food, after all.

[Jack from Ohio]

<<<Hmm, donuts...time to eat the donuts.>>>

 

Well, donuts are holy food, after all.

Don't give up your day job!!!!   GGRRROOOOAAAANNNNNNNNNNNNNNNNNN

[kcjenkins]

Evidence speaks to the contrary.  I stand by my post.

Shame on you, Jack.  You surely know Atticus well enough to know when he's being sarcastic?   Especially when you read his second and third paragraphs.

[TaxMan60601]

Wow, it is funny how many comments such a simple and burden-less summer topic can accumulate though... I am young enough but there is one thing I learned and stick to.

Don't judge people - there is one who can! But help them, give them the light, spread the knowledge amongst them and show them the right path and devote to Good.

Do advise people - the responsibility for their actions and choices is their own!

I am not CPA, (still) not EA, just a RTRP, but I definitely "liked the idea" because there is much truth within, and I completely agree with "My guess is it happens all the time.  And people get away with it. I think a great number of them also receive entitlements." and I definitely do/will not give such advices to anyone for sure!

Tongue in cheek.

Lol, Jack, you're a real menace ..... worse than the c0mmuni$t$, lol

[Richcpaman]

Jack:

 

I know all the ways to hide the cash, or deposit the money in different accounts, or cash the checks and take the cash, etc., Etc.

 

You can't be in this business for 23 years without learning them. 

 

Because we get paid to look out for them to make sure *we* don't get in trouble with our clients who want to be a little to shady.

 

And it does not mean that we are *using* these techniques.

 

Rich

[taxxcpa]

Refresh my memory, but doesn't the regulation say that you are to report ALL income?  As a CPA, instructing people how to circumvent the regs is a Circular 230 violation, and more importantly, a HUGE indicator of what your ethical and honesty base is?

I have never advised clients to cheat or conceal cash income.  They are capable of figuring it out for themselves if they are dishonest.

How did you get the idea that my comment was advice to a client?  If I said that shooting someone in the head with a gun would be an effective way to kill them, would you think that was the advice I gave clients.

 

You really should apologize for making that assertation.

[mcb39]

Shame on you, Jack.  You surely know Atticus well enough to know when he's being sarcastic?   Especially when you read his second and third paragraphs.

 

But, KC, you have to remember that because you know who all the posters are; does not mean that we all do.  Had I know that the post in question was made by Atticus, I would NEVER have questioned it.  Sorry for the confusion.  The written word can be interpreted in may different ways; especially when on the fly.....

[RitaB]

I love all you people like a nerd loves math class.

[kcjenkins]

Marilyn, you've been here since day 1, how could you not know that's Atticus's member name?  You do make a good case for the need for an agreed on 'sarcastic' font.  I've nominated the  "Comic sans MS" for that, but t's been ignored so far.  

[jklcpa]

You do make a good case for the need for an agreed on 'sarcastic' font.  I've nominated the  "Comic sans MS" for that, but t's been ignored so far.  

 

Even with the different font, people who are not frequent posters might miss that subtlety and take a post as a serious one. Maybe Eric can include a sarcastic smiley in the overhaul.

[kcjenkins]

Good idea

[JohnH]

If we had a sarcasm font, I'd want to suppress it.

Part of the fun with sarcasm is the challlenge of figuring it out.

(Well, that plus having a little private laugh when someone misses it.)

[Jack from Ohio]

I have been here almost since day 1, and I do not yet know most of the names that are not used as their ID.  Mine is obvious. 

 

Likewise, this website is public and comments like I complained about could be construed as actual options or instructions. 

 

Nothing is secret in the internet...