slp" <slp78[at]hotmail.com> wrote:

- quote -

Have your past returns amended so they are accurate and
complete. Make your 2005 return accurate and complete. In
the long run, you'll be glad you did. You won't care about
audits anymore.

If you don't have the money to pay the tax that you will
owe, you can ask to pay in monthly installments.

--
To email me directly, remove CLUTTER.

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slp wrote:

- quote -

While the chance of audit may be slight for the
contributions, the stock issue is easily found based on
record matching. Brokers issue a statement for total
proceeds, and copy the IRS.

I'll just say that if I were you, I'd not assume this is
behind me. Also, I wouldn't be comfortable using someone
that left me hanging like that. Professionals may disagree
[on specific points] but to advise a client to ignore an
obvious mistake goes over a line I'd never cross.

JOE

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slp wrote:

- quote -

I guess asking other tax professionals to "approve" B or C
beacuse you don't have the money to "throw at the IRS" is
one way of "winning friends and influencing people."

What you should do is amend the return, report the proper
amounts that should have been reported in the first place
and pay the additional tax. If you do not have the money,
you can apply for an installment payment schedule with the
IRS.

I am presuming that you had good records regarding the stock
sales and know the correct gain amount to report. However,
the amendment could mean two different things regarding the
contributions:

1) If you prepare the amended return, you may want to report
the actual amounts contributed even if you can not
substantiate them all. However, if you haven't kept all of
the receipts, then you are still just guessing and that's
dangerous.

2) If you have a professional prepare the amended return,
s/he must only report the amount you can substantiate. (I
laugh as I type "must" since that, theoretically, also
applied to the two previous preparers.)

The beauty of #2 is that even if you get audited, the IRS
should not be able to come up with other adjustments that
would increase your taxes (unless there is something else
either you aren't telling us or another "mistake" your prior
CPA made and you haven't caught).

Finally, get honest preparers and resolve to be more honest
yourself. Although the last two preparers "had [you]
claiming charitable contributions above what [you] actually
gave", it was you who could have stopped that, only claimed
what you actually gave and fired the preparers for
dishonesty (rather than for being late for appointments).

Your first step, hopefully, was the post to this usergroup.

Peter C. Gatto, CPA

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Your best bet is to find a new CPA.

You may not get caught, but if you do get caught, fraud
penalties may accrue. If you file amended returns and
report the correct amounts, then you will probably come out
smelling like a rose, but those tax preparers will come out
smelling of something else.

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This isn't really complicated at all. You've been knowingly
lying on your taxes. Two different accountants have advised
you to lie on your taxes. Now you're worried about getting
caught. See, it's very simple.

As for what you should do? You should amend all of your
previous years' returns to correct everything which you know
to be untrue. To assist you in this effort, you should find
yourself a new accountant who is competent (since it's going
to be a bit complicated to amend all those previous years,
pay penalties and interest, etc.), honest (although I'm not
sure that's a hard-and-fast-requirement -- since you don't
seem to have any problem with being dishonest yourself, it's
not obvious that your accountant should have a problem with
it), and experienced handling hard cases before the IRS
(since the IRS will probably start looking mighty closely at
your taxes when you start sending in the amended returns,
and even if they don't, if you really don't have the money
to pay all the taxes you should have paid for the past
several years, you're going to need a good accountant to
negotiate a playment plan with the IRS).

Stock brokers send 1099s to the IRS, and the IRS does
eventually match up the information in the 1099s against the
information on people's tax returns, so the odds are that
they will eventually figure out that you reported a 20K loss
instead of a 20K profit. You'll be far better off going to
them to come clean before they come to you first.

If you do in fact decide to turn over a new leaf and start
being honest, then your next step should be to report your
two previous accountants, both of whom knowingly assisted
you in filing fraudulent returns, to your state's accounting
board (i.e., the people who certify Certified Public
Accountants) and the IRS.

One more thing.... Honest accountants "fire" dishonest
clients. So if you are sincere in wanting to find a decent,
honest accountant to help you out of this mess, you'd better
resolve to behave yourself going forward, and mean it.

Maybe you were looking for a more practical answer on the
lines of how to not get caught without actually having to
come clean and pay for your dishonesty. Maybe another
participant in this newsgroup will give you such an answer;
I certainly won't.

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"slp" <slp78[at]hotmail.com> wrote:

- quote -

If there's a God you'll get audited no matter what you do,
unless you fix up all open years pronto.

You've come to the wrong place for advice on how to commit
tax fraud.

--
Phil Marti
Clarksburg, MD

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"slp" <slp78[at]hotmail.com> wrote:

- quote -

Stop right there. That is your only rational choice.

- quote -

Life is rough and then you run out of cash.

Your only hope of not facing civil and criminal penalties
is to file amended returns asap. You are damn lucky you
did not get audited.

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"slp" <slp78[at]hotmail.com> wrote:

- quote -

First and foremost - there are specific rules that prohibit a
professional from considering "audit lottery risk" when making
a recommendation. So, the professional recommendation is to
amend your returns and make them correct.

You may actually have another problem that you aren't even
aware of - civil fraud!

See, if you had filed the 2003 returns without checking them
then we could argue that you were just stupid. Everyone is
supposed to check their returns and have a good faith belief
that they are correct - or at least as correct as one is able
to perceive them as being. In cases like this the return can
be amended, the tax paid and if a good reason exists for the
error AND you fess up before you're caught, then the
likelihood is that you'll pay interest but no penalties.

Your case is different however. You not only KNEW the returns
were wrong but you knew the difference was significant. Yet
you still filed to get a refund you knew you were not entitled
to. This amounts to civil fraud. Now here's the really good
part. While the normal statute of limitations for a tax return
is 3 years, there is NO STATUTE of LIMITATIONS for a fraudulently
filed return. In fact, fraud can only be corrected by amended
the return PRIOR to the original due date.

So, for your 2003 return - if you filed a fraudulent return you
would have to correct it by filing a correct amended return no
later than 04/15/04. As this date has passed so had your
chance to ever be technically free of the statute. The IRS
could raise a fraud issue against you at any time that they
like at any point in the future.

Now, the reality is that if you fess up, correct the return
and pay the tax due that IRS will likely never bother you for
anything more than interest. Though they could assess various
penalties against you - they likely won't.

My recommendation is to fix the returns and pay the tax,

Gene E. Utterback, EA, RFC

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Last year I went to a new accountant because my former one couldn't
keep an appt and took literally hours to do my taxes (nothing
complicated just 60K/yr, some stocks, a few deductions. not even a
house).

In 2003 I made 20K profit in stock trading. The guy does my taxes and I
end up getting a refund. I walk out feeling happy but bothered because
I'm pretty sure I owed some tax on the stock. I drive a few blocks,
pull over and start trying to decipher the forms. I realized he put my
profit as a loss. I go back and he explains that we can do it over but
the IRS isn't going to catch it and even if they did we'll worry about
it then. So this is where I got REALLY stupid and greedy and I mail it
off. I would like to refile for last year but there's
another problem. My last accountant had me claiming charitable
contributions above what I actually gave (2000.00 instead of the
800-1000 I contributed) and I did the same with the new accountant. So
If I refile does that increase my chance for an audit? If it does what
about the previous years as well? As I see it I have 3 choices:

A) I can refile and then pray they don't audit (maybe even knock the
contributions down or even take them off. I'm terrible at record
keeping and don't know if I even have half the receipts that I should)

B) Continue on as if nothing happened and I don't know anything. I file
my taxes for 2005 but don't take the 3000 carryover from the previous
years loss (will that raise a flag if I don't keep rolling over the
loss from the previous year?). Also I quit inflating my deductions.

C) Same as B but keep carrying over 3000 for the next 5 yrs (or
whenever it runs out). My concern here is if it ever gets caught this
option really puts me in the hole.

I realize theres always a chance for an audit but which of these 3
minimizes that chance? I kind of like B but don't know if not carrying
over the loss will stick out. Unfortunately I'm down to my last 12K so
throwing cash at the IRS is out of the question (another reason I'm so
mad at myself, I had the cash in april to pay my taxes).

Thanks for any advice you can give.

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