Dr. Gary M. Schwarz and Marlee Schwarz overall lost in a recent Tax Court decision. It was a fascinating story. Dr. Schwarz, who had a very successful dental practice, also had a substantial amount of real estate. On some of the real estate, deer larger than usual for Texas roamed thanks to a fencing system that Dr. Schwarz had invented. This allowed for an ecotourism operation, which included hunting packages that generated a lot of revenue, but even more expenses. The silver lining of that cloud was the losses, characterized as farming, sheltered other income from dentistry and real estate.
Small Mistakes With Huge Costs for Your Client’s Tax Returns
Joshua Youngblood, EA, CTRS, CRETS, NTPI Fellow
We’ve all been there. A client walks into your office and, somewhere in the conversation, you realize that a seemingly minor oversight, a missed deadline, a form nobody filed, an election nobody mentioned, has spiraled into a five- or six-figure tax problem. In my years of practice, some of the most expensive mistakes I’ve seen weren’t the result of aggressive planning gone wrong. They were small, quiet errors. The kind that happens when a deadline slips, an election isn’t made, or a form gets overlooked entirely. The tax code is unforgiving in these situations, and the IRS has little sympathy for “I didn’t know.” This article walks through some of the most common, and most costly, small mistakes that can devastate your client’s tax situation, along with practical guidance for avoiding them.
