The blog’s tag line is,
[P]roviding news and sometimes irreverent commentary on today’s tax and financial issues.
I hate to drag Bill into the ongoing debate about whether and why CPAs are more suited than others to engage in quality tax return preparation, but I really have no choice. That’s because he has recently chosen to blog about a Tax Court case that is particularly relevant to the dispute.
Good accounting is required by the tax code
[Unenrolled tax preparer] Brian Symonette operated a tax preparation business [called The Tax Doctor].Hopefully, he advised his clients to keep better records than he did himself.In a Tax Court Opinion published yesterday, Brian lost $14,289 in deductions attributable to his Hummer for failure to keep adequate records of his mileage.
Bill quotes part of the Tax Court Judge’s opinion:
The necessity of keeping appropriate records — and the understanding of the sort of records that would be appropriate-to support so substantial a claim should have been reasonably clear to someone like Brian. After all, he held himself out as knowledgeable about tax matters, people paid him to do tax work for them or give tax advice to them, and he testified at trial as to why it was appropriate for him to insist on being called “Doctor”.Brian testified he has a Ph.D. in education administration, a master’s degree in management information systems, and a bachelor’s degree in business administration. Yet on this major matter of dispute the major books and records item he offered — the Hummer log — was so much in conflict with what petitioners showed on their tax return that we doubted not only its reliability but even its existence at the time when, Brian testified, it was updated weekly. (Emphases Added)
[The foregoing facts] lead us to conclude that petitioners failed to maintain books and records in accordance with the requirements of code section 6001 and the regulations authorized (and not challenged by petitioners) thereunder. (Emphasis Added)
“CPA” is the highest designation for accountants
Unenrolled preparers are not credentialled in accounting
I would bet my life on a return prepared by an EA first, an unenrolled preparer 2nd, and a CPA third.