# Why having a Tax Attorney do your taxes is the key to AVOID BEING AUDITED



## The Jax (Apr 17, 2018)

I will keep it short and simple. I have a bookkeeper I hired years ago who is Quickbooks ProAdvisor (Quickbooks certified) and is also registered as an Enrolled Agent with the IRS. She does all my books.

She sends my books to a CPA who give them a second look and that CPA also files my quarterly.

My CPA sends off my quarterly to a CPA/PA which is a Tax Attorney (Basically a licensed attorney who is also a licensed accountant). They give my books a third look and also prepare and file my yearly.

No audits and no problems. Yes, I spend a little more out of pocket but I have three different parties double checking each other and everything. I also get great advice on three different levels of the accounting game on what I need to do to save money and make their lives easier. I would recommend this setup.

In the event I am audited, the Tax Attorney has the ability to immediately challenge the IRS and/or mediate the issue, for an additional fee.

What setup do you have and would consider what I have setup? Thanks.


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## islanddriver (Apr 6, 2018)

If all you are doing is rideshare and no other business. Or investment. what you are doing is overkill and a waste of money.
I've owned 3 businesses over the last 40 years. and haven't need to hire the people you have.


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## MasterC (Jan 31, 2018)

Yip, overkill.
Take yourself out to dinner with the $$ you waste.
3 years and counting. 
How many drivers have ever been audited?


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## dmoney155 (Jun 12, 2017)

The Jax said:


> I will keep it short and simple. I have a bookkeeper I hired years ago who is Quickbooks ProAdvisor (Quickbooks certified) and is also registered as an Enrolled Agent with the IRS. She does all my books.
> 
> She sends my books to a CPA who give them a second look and that CPA also files my quarterly.
> 
> ...


We are talking about rideshare here, right?.....I do absolutely none of what you have stated and I got audited exactly 0 times.... what you do seems like an overkill for a rideshare which is hardly a business to begin with. Seriously, if you need that much help with rideshare, imagine if you were running a big corporation.


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## Seamus (Jun 21, 2018)

I'll have to join the chorus of that is ridiculous overkill. First off, that is an expensive way to go and totally unnecessary for small businesses, especially for rideshare.

Paying someone to do bookkeeping for consulting/rideshare is the first waste of money. R/S drivers don't need Quickbooks. The only accounting need for rideshare only is to track expenses for taxes and you don't need Quickbooks for that. Even if you own a small business that has greater needs than R/S, Quickbooks is simple to learn and you would be better off learning to do this for yourself. It would also force you to have a better understanding of your businesses finances.

Having a CPA do your taxes is normal for small businesses. For R/S only however, for people who are doing the basics it's also unnecessary as long as you're willing to learn. If you don't feel comfortable, CPA is the way to go. Most folks cheapen out and save a little money going to a tax prep chain like HR Block. Most drivers don't understand there is no standards or licensing for "tax prep" so the person may not even know what they are doing. Also, the Tax Prep person has zero legal liability even if they totally screw up your taxes.

The biggest waste of money you suggested is a Tax Attorney. Tax Attorneys are for the super rich investor who pushes money all over the Globe. A CPA has no "clients privileged" information so if there are subpoenas issued they legally have to divulge everything you said to them and what they saw. A Tax Attorney has "Attorney Client" privileges so they don't have to divulge all the shell corporations or hidden bank accounts you set up! :roflmao: That's the only reason for going to a tax attorney to do your taxes and that applies most likely to 0% of rideshare drivers.


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## Older Chauffeur (Oct 16, 2014)

For the first several years after I took early retirement, I used a CPA, first because of investments, then because I started my own contract driving business. I also worked as a sub contractor for a private chauffeur service, sharing some clients with them when it was too much to handle by myself.

I used to try to see how close I could come to the CPA’s numbers using TurboTax. Eventually a few years ago I decided I had learned enough to handle filing my taxes myself. While running my business I continued to use TT,
while referring back to the CPA’s work as needed. Since I closed my business the taxes have gotten much simpler. TT imports the 1099’s directly from the investment firm, so I don’t have a lot to do.

BTW, (and I‘ve posted about this many times) for gig work, you don’t need TT’s “Home and Business“ or “Self Employed” or any other versions for which they charge a premium. “Deluxe” has all the forms you need, including Schedules C and SE. It sells for around $40 at discount stores like Costco or $50 retail. It can be used for up to five federal returns and includes one state return per federal return. E-filing is free for the IRS, but $25 if you choose to e-file your state, rather than print and mail.


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## Invisible (Jun 15, 2018)

Instead of hiring all those people, create an Excel spreadsheet to record miles, tips, etc. Thats what I did, but I did have a tax guy do my taxes just because it was easier.


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## SHalester (Aug 25, 2019)

overkill and costly. Having a CPA is sufficient.


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## _Tron_ (Feb 9, 2020)

OP, I congratulate you for your diligence. It is a fair point though that many of those who don't go that route have not been audited. Myself, I am at the other end of the extreme from you. I use nothing more than a spreadsheet to record income/expenses, then hand fill the tax forms at year end.

I have a car dedicated to rideshare, so I don't even need to track mileage other than to record it on December 31st. The standard mileage deduction usually offsets the Uber/Lyft income so no need to itemize.

This year the std mileage deduction did not fully offset, so I was thinking that there might be some deduction I missed that using TT would catch. But the free version available to drivers is an _online_ version. meaning all your data is stored, probably permanently, in the cloud. In this day and age? No thank you.


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## Amsoil Uber Connect (Jan 14, 2015)

And all that time you never learned how to do it yourself ? 

You give a new meaning to QAnon, Conspiracies facts, and above par in the paranoia theater arena. 

Take a tip from the Chinese, Reverse engineer that $h!t. As the money saved would better serve a homeless Veteran.


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## Older Chauffeur (Oct 16, 2014)

_Tron_ said:


> I have a car dedicated to rideshare, so I don't even need to track mileage other than to record it on December 31st.


One of the things my CPA did insist on was contemporaneous mileage log, just as the IRS lays out in their publications. I know the worksheet for mileage on TurboTax asks for beginning and ending odometer readings for each year, but I haven't seen any statement from the IRS granting an exemption for owners of dedicated business vehicles from keeping a detailed, contemporaneous mileage log. If you could site the publication and section detailing this issue I would be most appreciative.


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## _Tron_ (Feb 9, 2020)

Older Chauffeur said:


> If you could site the publication and section detailing this issue I would be most appreciative.


I can't, because I've never researched it. On my list of life's worries, getting in hot water with the IRS during an audit because I didn't keep such logs, is very low.


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## Another Uber Driver (May 27, 2015)

MasterC said:


> How many drivers have ever been audited?


.............more than you would think....................

I just use a CPA. I send her all of the information, she e-Files and it is done. She also lets me deduct her fee. Check with your accountant to see if you can deduct the fee.


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## islanddriver (Apr 6, 2018)

Another Uber Driver said:


> .............more than you would think....................
> 
> I just use a CPA. I send her all of the information, she e-Files and it is done. She also lets me deduct her fee. Check with your accountant to see if you can deduct the fee.


Tax prep fees are always deductable


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## The Entomologist (Sep 23, 2018)

The odds of you getting audited by the IRS are as much as you winning the lottery.

I wouldn't worry unless you make more than 100k a year.


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## kingcorey321 (May 20, 2018)

Why not file correctly stop fudging the numbers ! 
If they audit you . Hey you did it all correctly here you go . All my papers i used to file my taxes.
Always do it correctly no worrying .
Now to make a false paper in home repairs for a extra state wright off ??? Never do that lmao . No comments 
My other tip is always keep track of your wright offs so you wont make a mistake and file the same next year lmao ! . Not good .


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## _Tron_ (Feb 9, 2020)

Hey kingcorey321. What's your favorite libation?


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## JeanOcelot0 (Dec 30, 2020)

The Jax said:


> I will keep it short and simple. I have a bookkeeper I hired years ago who is Quickbooks ProAdvisor (Quickbooks certified) and is also registered as an Enrolled Agent with the IRS. She does all my books.
> 
> She sends my books to a CPA who give them a second look and that CPA also files my quarterly.
> 
> ...


Well, I'm not an ant (ride is too old), but I was a programmer-ant for a while. I would do my own taxes. Once familiarized with the rules, an ant can save having an "expert" do what he could do on his own.


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## Older Chauffeur (Oct 16, 2014)

islanddriver said:


> Tax prep fees are always deductibleFrom IRS.gov, 12/2020


Maybe not always.
[HEADING=3]Tax Preparation Fees[/HEADING]
"Tax preparation fees on the return for the year in which you pay them are a miscellaneous itemized deduction and can no longer be deducted. These fees include the cost of tax preparation software programs and tax publications. They also include any fee you paid for electronic filing of your return."

The above strikes me as ambiguous. What I think they mean is miscellaneous itemized deductions are lumped together and are deductible only to the extent that the total exceeds 2% of your AGI. My CPA split his fees between business and personal tax preparation.

Fees you pay an accountant for business related work are still deductible.

"You *can deduct* any accounting *fees* that you pay for *your* business as a *deductible*business expense-for example, *fees* you pay *an accountant* to set up or keep *your*business books, prepare *your* business tax return, or give you tax advice for *your* business."


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## SHalester (Aug 25, 2019)

Another Uber Driver said:


> She also lets me deduct her fee.


well, of course, it's legit. But does yours put half on the Schedule C and other half as an itemized deduction on the 1040? In my case made for a bit more loss on the Schedule C; always a good thing.


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## Seamus (Jun 21, 2018)

SHalester said:


> well, of course, it's legit. But does yours put half on the Schedule C and* other half as an itemized deduction on the 1040? I*n my case made for a bit more loss on the Schedule C; always a good thing.


Well the problem with that is tax prep fees are no longer deductible unless you own your own business and deduct it on schedule C as a business expense. You might want to look again???


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## SHalester (Aug 25, 2019)

Seamus said:


> Well the problem with that is tax prep fees are no longer deductible


yup, you are right. That was previous years; kinda why I drop my stuff on a CPA; I have no desire to remember year to year changes.

The good news it landed on the Schedule C and when I looked recently it sorta looked like half of the bill; never looked at the list of itemized. My bad. I sit corrected. The other half he put into misc expenses on schedule C; so at least I still get to deduct HIS fees someplace.


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## Seamus (Jun 21, 2018)

SHalester said:


> yup, you are right. That was previous years; kinda why I drop my stuff on a CPA; I have no desire to remember year to year changes.
> 
> The good news it landed on the Schedule C and when I looked recently it sorta looked like half of the bill; never looked at the list of itemized. My bad. I sit corrected. The other half he put into misc expenses on schedule C; so at least I still get to deduct HIS fees someplace.


I deduct the full amount of TT "Home and Business" as a business expense. Yes I know I'm supposed to pro rate it but they have no idea how much I paid in the first place so it's not a flag item. Meaning it would only even possibly come up in an audit triggered by something else. If I'm audited and we are down to the level of talking about the pro ration of my tax software I'll consider that a big win! :roflmao: I've been audited 4 times and I can assure you my tax prep proration never came up!!! I survived three of them unscathed. The fourth one.....ouch!


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## SHalester (Aug 25, 2019)

Seamus said:


> I've been audited 4 times


I've never been audited and I have some big investment amounts lurking on my various 1099's. How you manage to get audited so often?


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## SleelWheels (Jun 25, 2019)

You remind me of my ex wife.


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## Big Lou (Dec 11, 2019)

SHalester said:


> overkill and costly. Having a CPA is sufficient.


My CPA has done good by me for years. I like making one call when there is an issue then the problem is gone.


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## Stevie The magic Unicorn (Apr 3, 2018)

If you report all your income and take the standard deduction and have no 1099 income the odds of an audit are zero.zilch zippy nada.


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## Seamus (Jun 21, 2018)

SHalester said:


> I've never been audited and I have some big investment amounts lurking on my various 1099's. How you manage to get audited so often?


I do not have simple taxes I have W-2 job 1099's rental property and some residual income streams coming in plus investments bought and sold. Some transactions attract attention, not much I can do about it as they are legitimate. 1 of them ....a different story. Something was disallowed. Interpretation that the tax attorney said I couldn't win. Painful &#128178;&#128178;&#128178;&#128178;&#128178;&#128178;


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## SHalester (Aug 25, 2019)

Seamus said:


> I have W-2 job 1099's rental property


I did my taxes until 2003. then I had a few housing transactions and a sizable brokerage account with a bunch of transaction; throw in some foreign taxes paid and that was it for me; right to the CPA it goes. All that and now a schedule C, tho for 2021 wondering if I'll even have a schedule C.

CPA's, are worth it if one has anything approaching complicated or the audit trigger: proration(s)......I've been lucky so far. No sweat, wanna audit me, see my CPA.


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## Mash Ghasem (Jan 12, 2020)

The Jax said:


> I will keep it short and simple. I have a bookkeeper I hired years ago who is Quickbooks ProAdvisor (Quickbooks certified) and is also registered as an Enrolled Agent with the IRS. She does all my books.
> 
> She sends my books to a CPA who give them a second look and that CPA also files my quarterly.
> 
> ...


Well that's one end of the spectrum!

And this is the other end of the spectrum:






I suspect the truth lies somewhere in between.


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## UberBastid (Oct 1, 2016)

Older Chauffeur said:


> One of the things my CPA did insist on was contemporaneous mileage log, just as the IRS lays out in their publications. I know the worksheet for mileage on TurboTax asks for beginning and ending odometer readings for each year, but I haven't seen any statement from the IRS granting an exemption for owners of dedicated business vehicles from keeping a detailed, contemporaneous mileage log. If you could site the publication and section detailing this issue I would be most appreciative.


As far as income ... I report what the IRS already knows.
As far as deductions ... I look at what I reported last year as a % of income. I do approximately but not exactly the same % and report it.
I take all those numbers, on a one page spread sheet, without supporting documentation to my CPA and ask her "Is this believable?" If she finds one that too high, I reduce it till it is within parameters.

For example: I do NOT claim a home office ... it's a flag. I report those costs under in a different category.

Been doing that for multiple businesses for a half century ... got audited once. They found about a $1000 'error' and I made $50 payments on that for two years. 
Never got another audit.

Just NO blood in this turnip.

The IRS is toothless before us humble peons. They can't do much to us.


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## Jon Stoppable (Dec 11, 2019)

Why not hire a bear to do your taxes? You can pay in food, and you're helping the environment! (Bears are part of the environment)

Bear would caution that many tax attorneys are not also accountants. For example, they might specialize in trying cases in the Tax Court, or international tax treaties, or estate planning, and for those they don't need to know debits from credits. If you have some complex issue arise, the tax attorney might (*might*) be worthwhile, vs. a CPA. But if your return is same ol' same ol' year after year, a tax attorney's bill would be a total waste.


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## UberBastid (Oct 1, 2016)

Jon Stoppable said:


> Why not hire a bear to do your taxes? You can pay in food, and you're helping the environment! (Bears are part of the environment)
> 
> Bear would caution that many tax attorneys are not also accountants. For example, they might specialize in trying cases in the Tax Court, or international tax treaties, or estate planning, and for those they don't need to know debits from credits. If you have some complex issue arise, the tax attorney might (*might*) be worthwhile, vs. a CPA. But if your return is same ol' same ol' year after year, a tax attorney's bill would be a total waste.


And, just to add another variable.
A CPA does not have any kind of 'confidentiality' requirement. A lawyer does.
You can tell your lawyer that you cheated on your taxes and he can't tell the IRS.

Not true with an EA or a CPA.
They HAVE TO TELL or they can lose their license.


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## Jon Stoppable (Dec 11, 2019)

UberBastid said:


> And, just to add another variable.
> A CPA does not have any kind of 'confidentiality' requirement. A lawyer does.
> You can tell your lawyer that you cheated on your taxes and he can't tell the IRS.
> 
> ...


 Not true at the federal level: 26 USC 7575. And if a matter looks criminal, any non-stupid CPA would bring in an attorney.


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## UberBastid (Oct 1, 2016)

Jon Stoppable said:


> Not true at the federal level: 26 USC 7575. And if a matter looks criminal, any non-stupid CPA would bring in an attorney.


Then my CPA is wrong.
She warned me not to tell her too much.

So, we talk in a lot of 'hypotheticals'. 
"Asking for a friend."


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## TobyD (Mar 14, 2021)

The Jax said:


> I will keep it short and simple. I have a bookkeeper I hired years ago who is Quickbooks ProAdvisor (Quickbooks certified) and is also registered as an Enrolled Agent with the IRS. She does all my books.
> 
> She sends my books to a CPA who give them a second look and that CPA also files my quarterly.
> 
> ...


I do my own taxes. Never been audited. Sounds like you spend a lot of money on professional help, and they do their best to make it feel like money well spent &#129315;


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## Mash Ghasem (Jan 12, 2020)

Jon Stoppable said:


> Not true at the federal level: 26 USC 7575. And if a matter looks criminal, any non-stupid CPA would bring in an attorney.


Are you sure you're not Yogi Bear in disguise?

You certainly sound smarter than the average bear... hey hey hey!


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## UberTaxPro (Oct 3, 2014)

The Jax said:


> I will keep it short and simple. I have a bookkeeper I hired years ago who is Quickbooks ProAdvisor (Quickbooks certified) and is also registered as an Enrolled Agent with the IRS. She does all my books.
> 
> She sends my books to a CPA who give them a second look and that CPA also files my quarterly.
> 
> ...


EA's also have the right to represent you to the IRS & prepare your taxes. In fact that is what they specialize in & what I do! Not all CPA's specialize in taxes and the only thing tax attorneys can do that CPA's & EA's can't is to take a case to Court. 99% of tax cases get resolved within the IRS administrative process. Are you sure your bookkeeper is an EA? https://www.irs.gov/tax-professionals/enrolled-agents/enrolled-agent-information


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