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