Are You Being Aggressive, Enough (Legally)? Lance Wallach, expert witness.

The question in the 80′s used to be, “How far can I push it before I get audited?” However, with increased IRS enforcement, it’s now important to ask, “Will I pass an IRS audit?”

The IRS today now uses sophisticated statistical analysis with modern technology that identifies tax returns likely to yield an additional tax liability assessment.
In other words, if your numbers don’t make sense, the computers can detect these out-of-whack ratios with ease. What this means practically is that you can’t play the “audit lottery” anymore. The computers are just too good.

The question now becomes, “How can we be aggressive, legally?”
And the answer is simple: PLANNING. Actually, Year-round PLANNING.
So long as you pre-plan your tax strategy, and make sure you have ample proof to back yourself up in the implementation of the plan, there is no need to be worried about an IRS audit.

You can still be aggressive; you just need to be pro-active.

Some suggestions are have you maxed out your pension contribution? Do you have an HSA? Are you taking deductions for having an office in your home? Do you use a K or double K plan for large deductions? Have you reviewed the IRS industry specialization manual for your industry to see what the IRS is looking hard at this year?

Is your accountant an IRS tax collector, or your protector? Accountants now have to notify the IRS of some deductions on YOUR return, or be fined a minimum of $100,000. A lot of audits result from this. The form that your accountant has to file is confidential.
As an expert witness Lance Wallach's side has never lost a case. People need to be careful of 419 Welfare Benefit Plans, 412i plans, Section 79 plans and Captive Insurance Plans. Most of these plans are sold by insurance agents. If you are in an abusive, listed or similar transaction plan you need to file under IRS 6707a. The participant files form 8886, and the salesmen or accountant who signs the tax returns files form 8918 if they got paid over $10,000. They are called Material Advisors and face a minimum $100,000 fine. Some plans are offshore which could involve FBAR or OVDI filings. If you have money overseas you probably need to file for IRS tax amnesty. If you want to reduce the tax we suggest that you first file and then opt out. For more information Google Lance Wallach.

The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.

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