finding an accountant/service for tax reduction

[kev777zero]

I currently have an accountant and I think he does alright (setting up S-corp for my LLC etc), but I often see online (Facebook) ads on accountant services that boasts about saving taxes and how most accountants only file taxes but not specialize in saving taxes. Any thoughts on this?

[childay]

I currently have an accountant and I think he does alright (setting up S-corp for my LLC etc), but I often see online (Facebook) ads on accountant services that boasts about saving taxes and how most accountants only file taxes but not specialize in saving taxes. Any thoughts on this?

Sounds like good marketing

[spiritrider]

I currently have an accountant and I think he does alright (setting up S-corp for my LLC etc)

That presumes that an S-Corp is the correct business entity type for your particular facts and circumstances. I'm not saying it isn't, but as I pointed out in a recent post in another thread. CPAs are not infallible and as we have often seen on WCI, many blindly recommend S-Corps. When they should be doing correct due diligence of the client's facts and circumstances.

[jfoxcpacfp]

WCI participants are a unique group and appropriate accountants for WCI readers are rather unique, too. In fact, I wouldn’t even recommend every accountant paying to be “recommended” on this site based on feedback from initial consults who have reviewed others and kindly shared their convos. The more financially educated you become, the easier it is to separate the sheep from the goats (no offense to goats 😂). S-corp rec’s ring bells for me - tread carefully and do your due diligence.

[MPMD]

in my experience an excessive focus on tax reduction strategies often leads to people trying to do things that aren't allowed.

forgive me for saying this in this way, but people who are unsophisticated on financial topics seem to systematically believe there are a bunch of double secret loopholes that rich people use - which is just untrue.

i do think that lots of taxpayers out there file shady returns to see what they can get away with and the IRS doesn't have the resources to investigate them, suspect there are plenty of accountants who swim in these waters as well. at the end of the day it's a numbers game on some level.

[Hank]

in my experience an excessive focus on tax reduction strategies often leads to people trying to do things that aren't allowed.

forgive me for saying this in this way, but people who are unsophisticated on financial topics seem to systematically believe there are a bunch of double secret loopholes that rich people use - which is just untrue.

i do think that lots of taxpayers out there file shady returns to see what they can get away with and the IRS doesn't have the resources to investigate them, suspect there are plenty of accountants who swim in these waters as well. at the end of the day it's a numbers game on some level.

Sure, but eventually the flavor of the month becomes a high interest item for the IRS. Abusive conservation easements, micro-captive insurance companies earlier. Next employee retention credits are in the IRS’s crosshairs.

[Tim]

The goal is not tax reduction.
You should aim to pay every dollar of taxes owed but not cent more.

As mentioned, double secret loopholes do not exist. The tax code is public and well published. Unfortunately, it is human nature for most to want just about any expenditure to be deductible. Not how it works. Most personal spending is after tax.

[jfoxcpacfp]

I just adore the phrase “double secret loopholes”

[HumbleInvestor]

WCI participants are a unique group and appropriate accountants for WCI readers are rather unique, too. In fact, I wouldn’t even recommend every accountant paying to be “recommended” on this site based on feedback from initial consults who have reviewed others and kindly shared their convos. The more financially educated you become, the easier it is to separate the sheep from the goats (no offense to goats 😂). S-corp rec’s ring bells for me - tread carefully and do your due diligence.

For a second I thought why is she saying sheep's are better than Greatest Of All Time. Then it hit me.

[SeattleCPA]

in my experience an excessive focus on tax reduction strategies often leads to people trying to do things that aren't allowed.

forgive me for saying this in this way, but people who are unsophisticated on financial topics seem to systematically believe there are a bunch of double secret loopholes that rich people use - which is just untrue.

i do think that lots of taxpayers out there file shady returns to see what they can get away with and the IRS doesn't have the resources to investigate them, suspect there are plenty of accountants who swim in these waters as well. at the end of the day it's a numbers game on some level.

Commenting late on above and especially on the part I boldfaced...

The most abusive practices (or "strategies") I see get sold by the non-tax-practitioners selling investments. So where the tax advice is essentially embedded in the investment. E.g., the general partner or syndicator creates some nonsensical tax position that creates giant savings and investors blinded by greed can't resist.

Next most abusive or nonsensical in my experience are the "consultants" who don't actually prepare the returns or work with a taxpayer on a long-run basis but only take a retainer, outline a gambit (or "strategy"), and then disappear once check clears. As I've cautioned in another thread here, too much of the employee retention credit work done seems to have fallen into this category. But if you're working with a firm that won't be doing the returns? That'd be a red flag to me.

I see very little of this sort of nonsense from CPA firms. Which makes sense. A CPA firm wants a long-term relationship with clients and needs to get along with the IRS. If our firm or one like ours helps you optimize your 199A deduction or coaches you to setup an S corporation or helps you generate big real estate tax deductions, we plan as if we may later be defending the positions we recommend in an audit from IRS or state agency.

[micawber]

Next most abusive or nonsensical in my experience are the "consultants" who don't actually prepare the returns or work with a taxpayer on a long-run basis but only take a retainer, outline a gambit (or "strategy"), and then disappear once check clears.

I was recently cold-called by one of these. I had gotten several quotes for a rooftop solar system plus batteries, which is probably how they got my phone number. The caller offered to save me money through solar tax reduction strategies. I told him that I knew all about them. Tax credit? Done. State battery rebate? Done. How about the business tax deduction? But my home is not a business. Yes it is, he told me, because you're selling the power back to the power company. Doesn't sound right, I said. No problem, for $500 their CPA will fill out the form for me, and then all I have to do is have my CPA sign it. He couldn't explain why his CPA wouldn't sign it, assuming they were a CPA at all. I expect jail had something to do with it. Thanks, but no thanks.

[afan]

People who want edge case or frankly illegal tax schemes will always find someone selling them. Even microcaptive insurance is still being hawked. There was someone posting on here within the last year extolling the wonders of this approach.

As others have noted, some seek to play the game of hoping they don't get caught.

[VagabondMD]

Good luck just finding someone to competently file your taxes and provide practical tax planning throughout the year.

[jfoxcpacfp]

I expect jail had something to do with it. Thanks, but no thanks.

More like loss of license. Jail time is a whole ‘nother level.

[micawber]

More like loss of license. Jail time is a whole ‘nother level.

I know a surgeon who went to jail for tax fraud. He kept doubling down with the IRS. They called him out for fraudulant deductions, and he then used fraudluant documentation ( essentially identity theft ) to support his claims.