I started asking questions. “My CPA has never asked me any questions,” Jim related. We continued to ask questions many times over the next two weeks, as we consider the client’s financial affairs as if they were our own. Net result: legal tax savings of $14,000 (FOURTEEN THOUSAND DOLLARS), a lot of money to anyone. Our fee was substantially less than the other guys.

So, in this case, Jim was smarter than a CPA.

My profession is completely different from anyone else. For example, you go to the doctor, and he cures you, you figure he must be competent. You engage a realtor, and she sells your home, she must be talented. But, how do you know your CPA/tax preparer is really good? Unlike all other professions, unless the client were an experienced preparer themselves, they would have NO IDEA.

So says W. Murray Bradford of the Tax Reduction Institute (visit his website at Bradford Tax Institute) . Mr. Bradford is one of the U.S. foremost tax experts, specializing in Small Business owners and Individual Taxpayers. I just wish I would have had a chance to work under him as my mentor.

I strongly recommend you sign up for his Tax Reduction Newsletter and updates. Murray has the unique ability (for a CPA) to speak in a language anyone can understand and explain complex concepts simply. He has made a career of studying the Internal Revenue Code to serve Small Business Owners and Individuals to save us money and protect us from the IRS.

Please take a moment and view his video on YouTube that discusses what the IRS will look for first in an audit, and costs the most money in audit adjustments: Disqualifying Travel Expenses

At a seminar I attended recently, a former high-level IRS agent was the guest speaker and his discussion centered on HOT TOPICS at the IRS. They are shifting agents from other areas into employment tax compliance. Due to the severity of this topic we felt that it is important to share this information with our clients, referral sources and friends of the firm:

IRS IS CRACKING DOWN ON PAYROLL VIOLATORS
Some violations carry civil and Criminal Penalties

DO YOU FALL INTO ONE OF THE CATEGORIES BELOW?

1. You are the owner of an ‘S’ Corporation – or a ‘C’ Corporation and do not write yourself a pay check?
2. Do you not file your payroll taxes timely?
3. Do not pay your payroll taxes on time or at all?
4. Do you treat your employees as subcontractors?

If you are the owner of a Corporation you are required by the IRS to pay yourself a reasonable salary. What is considered reasonable? A reasonable salary would be what you would pay someone to do your job, or what you would expect to be paid doing the same job for someone else.

What does this mean to you? If you are currently not filing or paying your payroll taxes you will be in serious trouble with the IRS and could be facing possible jail-time in addition to penalties and interest charges. What can happen? The IRS will assess penalties and interest. The interest and penalties will vary depending on how late the return is and how often you are late in filing your returns. The maximum penalty (not interest) for this is 25%. There are also additional penalties and interest for not making your payroll deposits on time, the maximum penalty (not interest) for this is 25%. This may also be considered a criminal offense if you have not deposited ‘trust fund’ monies on a timely basis (employee withholding and their share of payroll taxes).