Nothing derails a busy season schedule like being forwarded emails from client’s investors asking “are you sure the loss is allocated correctly?” It can expose a weakness in technical expertise – especially when it’s a partnership K1. Whether the operating agreement includes Safe Harbor or Target Capital allocations is one of the most important places to start for a preparer. And knowing these basics can be the difference between a confident reply or a lost week.
Lessons Learned from the Tax Court: An Olive Branch in Tax Court
Matt Metras, EA
“Everything is deductible until the audit” is an adage frequently repeated in the tax preparation industry. Generally, it’s mentioned tongue-in-cheek, but today’s taxpayer (and her tax pro boyfriend) may have taken it a bit too literally. Additionally, cutting corners may seem like a time-saving strategy in the moment, but the potential to backfire can’t be ignored. In this case, the taxpayer is about to learn things the hard way.
