Over the years that I have been assisting people who experience a catastrophic loss, each family has a unique story. Yes, ultimately it is necessary to synthesize the information, gather the data and compile a report that looks very similar to other reports with the unique numbers for the particular taxpayer. The process of getting to that final set of reportable numbers takes time and a commitment to listen to the taxpayer and a commitment to gather the necessary data, even if it takes unplanned hours to accomplish that goal.
That is where we start. There are different ways for taxpayers and accountants to arrive at the desired end. Here are ways we can help both taxpayers and tax professionals.
USE OF BLOG INFORMATION
John Trapani, CPA hosts a Disaster Recovery Blog filled with valuable information for both tax professionals and people who have experienced a disaster. Taxpayers and tax professionals are encouraged to use the knowledge base in the blog. Tax professionals are requested to give credit to the blog for information found on the site that is passed on to clients. But remember that IRS Circular 230 limitations always apply. The entries are general and while the situations may look familiar to your client’s facts, there will always be unique aspects that may change the outcome. If you want a tax opinion, we are happy to discuss how we might be of assistance.
If you have a website and would like to link to the blog, please do so, we would appreciate an email letting us know that you have done so. We are constantly looking for ways to expand the competent application of the tax code to the reporting by individuals and businesses of the financial aspects of a catastrophic event.
CONSULTATION SERVICES FOR TAX PROFESSIONALS
(And consultations for individuals.)
We are available to tax professionals for advice, interpretation, application and reporting. We also consult with taxpayers’ professionals on these situations in ways that the client has no knowledge of this firm’s involvement in their recovery. All possible combinations and possibilities of our assistance have occurred and are available to taxpayers and tax professionals.
Here are some specific ways the firm supports professionals who are faced with the important and often overwhelming task of assisting a client navigate the tax aspects of recovering from a catastrophic physical loss:
FEE SERVICES TO PROFESSIONALS:
SINGLE ISSUE TELEPHONE CONFERENCES
Sometimes a question arises in the preparation of a tax return that includes a catastrophic event and the after-recovery period. A minimum charge will apply and must be paid in advance.
“UP TO 3 HOURS” RETAINER
Usually, the situations involve what we refer to as a “call and response” process. A question is asked, there is a response, but that leads to another question. For these purposes we offer a Three Hour, Flat Fee Retainer. The three hours can be used by the professional for one client or more than one client. This is more cost effective than the cost of a single question interaction. It also allows for a quicker response time.
“10 HOUR” RETAINER
The Pre-paid 10-Hour Retainer allows for a cost effective choice for Tax Professionals who have a number of clients with recovery reporting responsibilities. If not all the time is used, a portion of the unused retainer at a “short rated” amount will be refunded.
TAXPAYERS AND TAX PROFESSIONALS
There are situations where the Tax Professional is not sure of all the questions to ask and what information needs to be gathered. For these cases I have consulted with both the taxpayer and the Tax Professional, jointly. All contacts are confidential. Any material I generate for the taxpayer will be provided to the Tax Professional as a consultant for the taxpayer.
REVIEW OF TAX RETURNS
If you have prepared a tax return and would like a “second opinion” review before you submit it to the taxpayer, I am available to go over the casualty / involuntary conversion / disaster reporting prior to filing the tax return.
Over the past several years I have been approached by taxpayers who wonder about a return that they filed and Tax Professionals who come to the conclusion that the research they would need to do to properly prepare the return is more than they can justify for the value of the fee they can charge to the taxpayer.
PRIOR TO FILING RETURN REVIEW
I have reviewed a number of returns that were filed incorrectly. This necessitated preparing and filing amended returns. That opens the taxpayer up to possible, unnecessary audits. And… the original tax Professional lost the client forever.
Wouldn’t your clients be better served if the return is reviewed prior to filing?
Call me to arrange for a review of a return prior to filing.
POST-FILING TAX RETURN REVIEW
After-filing reviews have become a continuous source of taxpayer requests over the last several years. The problem for the tax preparer is that they no longer have a client. The taxpayer is upset about the lack of quality attention paid to the preparation of their disaster return. Incorrect / improper filing disclosure opens the taxpayer to being subjected to an additional disaster.
But, if as a tax return preparer, you wonder if the return you filled for the taxpayer had problems, is it better that you bring the necessity to correct it to the client than someone else?
Call me to arrange for a post-filing review.
AUDIT ASSISTANCE / TAXPAYER REPRESENTATION
When a tax return is called for examination of a disaster reporting tax return, the arguments that support the position on the tax return may be quite valid, but not fully documented in the tax file. I have represented a number of taxpayers over the years in these situations with excellent results.
I am available to assist the Tax Professional in preparation and if called for, assistance in the presentation of the taxpayers’ position to the tax authority. The Tax Professional will have the benefit of my many years of experience in audits in general as well as audits of disaster report tax returns.
CONTINUING EDUCATION PROGRAMS
I have prepared several continuing professional education (CPE) programs to “share the wealth of information” that I’ve gathered through years of continuous research, preparation of hundreds of returns with disaster disclosures and review of / correction of returns prepared by other tax preparers.
1-2 DAY COMPREHENSIVE COURSE
I have a comprehensive text book that is used in a 1-2 day continuing education program (CPE). I am available to present this course to professionals either in firm-sponsored presentations or through professional education providers.
The most comprehensive program that I offer is based on a 350-page textbook that I have written.
1-2 HOUR OVERVIEW
This program is based on a professional level discussion of the “Process of Recovery” section of the blog.
This intensive one- to two-hour program concentrates on the immediate tasks and process that professionals should use when assisting their clients in complying with the reporting requirements of the tax code and overall process in the recovery process.
John has led the courses discussed above for Financial Education Resources, the California CPA Society (local discussion groups) and the AICPA as part of a November 16, 2012 program in response to Hurricane Sandy.
John Trapani, CPA, is available to the news media to comment on tax issues related to disasters.
Internal Revenue Service Circular 230 Disclosure
This is a general discussion of tax law. The application of the law to specific facts may involve aspects that are not identical to the situations presented in this material. Relying on this material does not qualify as tax advice for purpose of mounting a defense of a tax position with the taxing authorities
The analysis of the tax consequences of any event is based on tax laws in effect at the time of the event.
This material was completed on the date of the posting