Archive for July, 2013

Ex-IRS Agent on the Radio, July 30 at 3:00 PM

July 30, 2013

The Power Connection Network. Host Timothy Chin, CEO of Referral Leaders International (RLI) welcomes Andy Magnus, to the show at 3:00 pm on Tuesday, July 30, 2013. Andy is a former IRS Agent and creator of, Your Tax Records Made Simple. The show is broadcast on ESPN 1510 in Kansas City and also can be heard online at . Learn some tips from the inside and ways to have peace of mind about your taxes. Not to be missed.

To listen online go to


A Big Difference Between Tax Avoidance and Fraud

July 17, 2013

In Tampa, the self-proclaimed “Queen of Tax Fraud” just got sentenced to 21 years in prison.  Part of her downfall was posting pictures on Facebook.  Really? Talk about playing with fire and getting burned!

There is a huge difference between tax avoidance and tax fraud.  The tax law is written in words and words are subject to interpretation. And there is nothing wrong with interpreting the law in your best interest.   The highly respected Judge Learned Hand (1872-1961) once wrote  “Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.”  But total disregard of the law and stealing records and money, that’s a different story.  That is stealing from the Government which ultimately gets their money from us.  So she was stealing from us.  And bragging about it.

“The Queen’s” sentence was based on the calculation that she had stolen $3.1 million.  Not just a minor clerical error.  Investigators later determined Ms. Wilson stole between $7 million and $20 million.  Also, not just a minor clerical error.

You can be conservative or aggressive, at your option.  Either way, make sure that you can support all your deductions by keeping good tax records.  An IRS Appeals Officer once told me that, for small businesses, more deductions are lost because of lack of documentation than for incorrect interpretation of the tax law.   Don’t let this happen to you.  For a simple solution for complete tax records, visit

Meet Your IRS Auditor – The Computer

July 12, 2013

IRS Audit SelectedWith all the news about the Government gathering information on us through the NSA, FBI, CIA, etc., is it any wonder that the IRS is using computers to audit your tax return.  In the past, IRS has “scored” your tax return based on a magical statistical formula to see what is the probability of getting money from you.  They still do that.

But now, in case you haven’t noticed, IRS forms are asking more questions that could be audit triggers.    When you claim vehicle expense for your business – “Do you have evidence to support your deduction?” “If “yes,” is the evidence written?”  What do think happens if you answer NO to these questions.   And how about “Did you make any payments in 2012 that would require you to file Form(s) 1099?” “If “Yes,” did you or will you file required Forms 1099?” Thanks for asking.

And then there is the program that matches W-2s and Forms 1099 to what is reported on your tax return.  And the more detailed reporting of security and stock sales.  And the list goes on.

In the last several years, we have seen a significant increase in the number of computer generated notices that our clients have received.  I have had clients bring in a stack of unopened IRS notices because they just didn’t want to know what was inside.  Not a good idea.  Even if you don’t open the envelopes, you are still responsible for the contents.  And there might be a time clock running which, if missed, could cost you a bundle.

Then Congress, in its infinite wisdom, has made your tax preparer responsible for YOUR tax return and could be penalized for deductions not properly documented.  Do you think that might that limit what you can deduct if you don’t have proper records.  (More on this later.)

If the IRS Computer sent you a notice today, how easy would it be to “send in” your documents to support the questioned deductions?  It could be extremely difficult and cumbersome.  Unless you have a good system.

Shameless plug – we recommend you take a look at for a simple, online system for people who hate accounting and taxes.  It could make your life much easier when you get the “Greetings” from the IRS.

IRS announces simplified Home Office deduction method

July 8, 2013

Office in HomeHome Office deductions have always been, shall we say, a little complicated to figure out.  IRS recently announced that for 2013, a person that qualifies for the Home Office deduction, may take $5 per square foot of Home Office space up to a maximum of 300 square feet.  This “per square foot” deduction replaces keeping up with a percentage of your utilities, repairs, depreciation, mortgage interest (or rent), taxes and other related expenses.  Just as in the past, deduction for Home Office is only allowed if the business portion is exclusively used on a regular basis for business.  This method will help some (especially the organizationally impaired) but may result in a lower deduction than the percentage of actual expenses allowed if a person elects to keep records. can help you simply keep up with the detailed records so your tax professional can help you decide which method is best for you.

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