Again, no, unless the accountant reported him for tax fraud.
How would the accountant know that he was doing it himself vs. switching to another accountant?
Don’t forget human nature; people can be vindictive, you know. This accountant had just lost my friend’s business.
Yes, but he could get disbarred for that. Look at it this way- the only tax years he know of are the ones he did the returns for.
And when you fill “report” someone you tell the IRS what you know, etc. Saying “I did this guys returns for years and of course those were good, but now he is no longer a client so maybe he is taking bad deductions” is gonna get shitcanned and the IRS will look into the CPA.
Well, this happened in 1978. Is it possible procedures have changed since then?
What kind of personal welding are you doing, anyway, that will be 20% of your work use?
Sure. My Bro started work there in the mid 1980’s, I worked at the Treasury starting just after that.
It might help if I mention that the business activity I’m talking about here isn’t my 40-hours-a-week day job; it’s a nights-and-weekends-at-home thing that serves to supplement my day job income. Thinking back on my business activity for 2016, I’d say the welder saw about 23 hours of use.
In the case of the welder - in fact, for most of the equipment on which I’ve taken a tax deduction - 20% personal use is probably a severe overstatement; I’m pretty sure I didn’t do 4.6 hours of personal welding last year.
Not if it’s done anonymously,.
Ok, then what would the CPA say on the anon form?
and then, how did Quartz friend know? True, he only suspected "One way, apparently, to get audited is to stop using your accountant and start doing your taxes yourself. This happened to a friend. He rather suspects that the accountant reported him. "
Thanks for the info! That really puts it into perspective.
A couple of odd statements …
Why would the IRS get mad at someone reporting suspected tax fraud? … I understand this example is pretty cheesy but the IRS agent just needs a minute or two to look up the tax payers returns … if the returns look clean, no big deal … seems to me the IRS would rather hear about the suspicions rather than have people stay quiet …
Consider the moderators on these boards … they generally encourage us to report suspected rules violations … they don’t have time to check each and every post and they rely on us to report our suspicions … if it is a rules violation, great … if not, no big deal … if they didn’t want me to report moderator actions as junior modding, they’ll tell me so …
I would bring my banking records with me for the first meeting with the auditor … in my case, these bank records provide a concrete defense against any charges of wrong-doing … if I had a side operation going on and wanted to hide the income, the last thing I would do is cash the checks at a FED-member banking institution, I would at least make the minimal effort to “launder” the money somehow …
Your bank records and your tax returns should be a perfect match … or you’re just asking for trouble …
The IRS isnt stupid. You got a tax Preparer, who has prepared this guys returns for years. Then, one year, he doesnt. Ok that is a little suspicious. So, you look into it, and find everything clean. Hmm, then the CPA then lied on the referral form. (you dont just say “this guys return may be funny” you give specifics). Ok, that’s pretty bad and now why did the CPA lie about a former client? because lost business? Ok, that’s REALLY bad.
Bring the bank records only if requested.