I have never completed a #4136, credit for federal tax paid on fuels. Have other tax preparers found that many busineses keep the records needed to take advantage of this credit??
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Generally not
I've got one lawncare guy and one farmer that we look at this for The farmer supposedly has good records at home (at least he can tell me the number of gallons); the lawncare guy says he has some receipts (not sure how he comes up with his number of gallons).
Bill -
There has been a lot of fraudulent preparers that have used this form to get their clients big refunds too. Usually, its not something you would see often, unless you do farmer returns.Comment
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I have several landscape & lawn care clients who claim it. They use estimates, but I'm OK with that since the amount isn't all that sigificant even if they're off by 10-20%. It's clear that mowers, leaf blowers, edgers, and tractors must use lots of fuel to operate.
A couple of years back a client brought me a return at the request of one of his employees to look over. The guy was in trouble with the IRS because his tax preparer had been preparing fraudulent returns. He had worked as a taxi driver and the preparer had claimed a HUGE deduction for the fuel tax credit. We decided he must have assumed that the client was taking short cuts through parks, ballfields, and lawns in order to justify the off-road use of the taxi."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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It is common with Loggers in our area as well. Some use quite a bit of diesel in their off road equipment and just a little gas in chainsaws. It's easy enough them to keep their receipts separated and just count the number of gallons from those.
Many use off road diesel, which some stations in our area sell without the tax, it is dyed and there is a very big fine if caught using dyed diesel in your highway use vehicles.Comment
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