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How To Deal With An Aggressive Accountant

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For anyone who runs their own business and has hired an accountant (or anyone who has gone to an H&R Block, based on what I’ve heard), you’ll run into someone who will aggressively pursue deductions even if you’ll feel a little uneasy about taking them. Now, it’s hard to figure out whether or not the deduction is legitimate for your situation and each one of us has a different level of tolerance for aggressive deduction taking but Jeanne Fleming and Leonard Schwartz recommend that you simply ask the accountant to explain the reasoning behind the deduction.

I agree with their argument that you shouldn’t accept any of these explanations:

  • The likelihood of an audit is low.
  • Everyone else is doing it. (Seems very grade school-ish of an answer doesn’t it?)
  • The penalties are low if you’re caught.

With the wealth of information on the internet, you can simply shelve the deduction for now and do a little research on it. While nothing online, short of the IRS website, can be a definitive answer, many sites can easily tell you if you should be wary of taking a deduction. You can always email me and I can give you my unfounded opinion or, if you’d like, I can post the question on this site and hopefully someone will be able to steer you in the right direction.

Remember, in the end it’s your neck on the line with your tax return, no matter who actually fills it out, so if you wouldn’t feel comfortable taking a deduction after doing your research, don’t take it.

Source: CNN Money

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5 Responses to “How To Deal With An Aggressive Accountant”

  1. Tricia says:

    Finding the accountant that’s right for you is something that I believe is pretty important. In my area, thanks to word of mouth I know how “by the book” all of the accountants in the area are. I have yet to take my tax return to any of them because it’s fairly simple at the moment. But when the time comes I know exactly which one to go to because their style matches my personality.

  2. Steve says:

    When it comes to taxes, I think it is important to go for every deduction possible.

    I also believe, that I love the country I live in (Australia) and I am happy to contribute to the growth and beauty of it.

  3. dimes says:

    I’ve actually been in the opposite situation, as the tax preparer whose client wants to take a lot of deductions he or she is not entitled to. That’s a weird feeling.

  4. Weekly Roundup – 11/24/06

    Here’s a quick look at some of the articles that caught my eye over the past week…
    Jim talked about how to deal with an aggressive accountant.
    Flexo noted that the U.S. Mint is going to try dollar coins (again). Personally, I think that thi…

  5. Matt says:

    I tend to stick with only deductions that don’t substantially raise the probability of an audit. Deducting my mortgage payments (now that I have a house) is a no-brainer. Not deducting my home office or cash donations to charity are also no-brainers. I was a bit nervous about last year’s Schedule C expenses, but I could rigorously document every single one of them, and it seemed unlikely that an audit which failed to catch me at anything would trigger a further probe into my finances.

    (Note that at no time have I done anything which is actually against the law. I’ve spent a lot of money on black-belt accountants and tax lawyers to make sure of that. But there are some details of my overseas finances that might provoke some skepticism if I’m ever closely audited, and I want to avoid having the IRS pierce the corporate veil at any cost. So it’s worth it to me to forego suspicious options that wouldn’t save me much money anyway.)


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