Is it the nature of the Beast?

[Possi]

Since I do a large percent of Police returns, is it the nature of the beast that I get tax returns in here from cheating preparers?

I just had a 1099 dropped on my desk in excess of 30k for typical "security" work. Many officers do this. But the previous tax preparer listed ALL of the expenses as "other" and listed them on a detail sheet just like this
grooming
personal hygeine (spelled just like that, too)
on the job meals
mileage (and the mileage line has almost $16k on it!)
law enforcement weapon supply

I think I'll start taking personal 'hygeine' on my tax return. Shouldn't we all? We wouldn't want to greet clients unkempt, would we? Oh, and OTJ meals, too. Yes, I took them years back, until I had a "come to Jesus" about it on this message board, that it is not allowed.

So, she simply NEGATED all but about $2,000 of self employment income.

I HATE HATE HATE being the one to tell him that homey don't work like that.

[JohnH]

and after you break the news to him, be extra careful when driving around town. Don't want to be in the position of having him writing you a ticket....

[Possi]

No doubt!

I'll be extra careful! Have not called him yet. Working on other, more pleasant tax returns!

[FEDUKE404]

Breaking the bad news

While your case is a bit over top, I have encountered police officers with a healthy handful of Forms 1099-MISC.

My approach is, and always will be, that such income is subject to SE tax via a Sch C.

Where things get sticky is deciding what expenses can go to Sch C and what expenses would belong on Form 2106.

I have seen returns where the MISC income mysteriously goes on line 7 as "wages" or elsewhere as miscellaneous income.

Of course, I guess there are those on this board who would never consider a Sch C situation since Joe Cop is not "in the business" of providing security at Billy Bob's Bar every Fri and Sat night? But that is a different topic.

I don't think the police officers are intending to be dishonest so much as some think it's their "right" to not pay taxes for their risks involved, service, etc. Rest assured there are likely several tax folks who wish to be on the "good side" of them also, so tax rules can be bent if not downright broken.

Actually I don't get too many referrals from police officers. So be it.....and I try to drive carefully.

FE

[Possi]

Always Sch C

There has never been a doubt that it was a Sch C. The most bold I have ever been was taking OTJ meals, as I believed them to be deductible since they are truly on the job, in uniform, and on call the entire shift. After much discussion here, I stopped that practice. I have never and will never take grooming and gyms even though I believe they too should be deductible. My feelings do not get in the way of my profession.

I have found that the police officers in my office do not have a clue what is going on with their tax returns. Most of the time, when the new ones come in and they are boldly cheating, like the one I opened the discussion with, the client rarely knows what is going on. How would he know a one-line deduction of $26k 'see attachment" is whacked out when he doesn't even LOOK at his tax return?

I keep them aggresively honest, taking every deduction I can, but always prepared for an audit. I tell my new clients that if I cheat, and I am audited, 400 of my best friends will also come under scrutiny.

The woman who did that return is no longer doing tax returns. Gee I wonder why? I wonder if Uncle Sam came knocking on her door....

[taxxcpa]

Police

The few police officer clients I've had are scrupulously honest about their taxes and will sometimes ask about something that is not deductible, but never have tried to talk me into deducting it.

[S T]

I only have 2 Police Officers

One t/p that is a Police Officer nevers asks for the extras that might be talked about, but always lists his drivers license and "hair cuts" which I do not deduct.

The other police officer is young and only been in police service for about 3-4 years - I have a Law Enforcement worksheet that I provide to him each year. And always each year a new question on deduction, and this year's question was:

" I am a member of the SWAT team - and my colleagues are writing off their Gym Membership and their Bicycle" as it is physical training required to stay in shape for the SWAT team"

From my research " I think not" but if anyone knows any different please let me know.

Thanks,

Sandy

[tacks]

Since I do a large percent of Police returns, is it the nature of the beast that I get tax returns in here from cheating preparers?

...expenses as "other" and listed them on a detail sheet just like this
grooming
personal hygeine (spelled just like that, too)
on the job meals, etc.

Well tell your clients that "you know" of an IRS agent who's married to a cop. And, NO, you're certainly NOT the only one who won't do that.

Futhermore i was just speaking with a cop a month ago. After we chatted a bit I understood that his fellow officers were caught up in a "preparer project." They pulled every one of the preparers returns, many of who were cops. Cops and others got pulled by the IRS merely because they associated with the preparer.

People, honest or not, got pulled merely for being associated with someone who deducted "Officer's haircut" expense.

good luck Possi

tacks

[kpangelinan]

The few police officer clients I've had are scrupulously honest about their taxes and will sometimes ask about something that is not deductible, but never have tried to talk me into deducting it.

This has been my experience as well.

Since I do a large percent of Police returns, is it the nature of the beast that I get tax returns in here from cheating preparers?

I just had a 1099 dropped on my desk in excess of 30k for typical "security" work. Many officers do this. But the previous tax preparer listed ALL of the expenses as "other" and listed them on a detail sheet just like this
grooming
personal hygeine (spelled just like that, too)
on the job meals
mileage (and the mileage line has almost $16k on it!)
law enforcement weapon supply

I think I'll start taking personal 'hygeine' on my tax return. Shouldn't we all? We wouldn't want to greet clients unkempt, would we? Oh, and OTJ meals, too. Yes, I took them years back, until I had a "come to Jesus" about it on this message board, that it is not allowed.

So, she simply NEGATED all but about $2,000 of self employment income.

I HATE HATE HATE being the one to tell him that homey don't work like that.

I feel for you on this one....I have similar experiences and hate it as well!!!

[DaveO]

I'll argue the "not in the trade or business" line as vigorously as anyone but I also think that a police officer IS in the trade or business of providing security. After all, they drive around in cars with “Protect and Serve” written right on the door. Besides, how else are they going to deduct that shiny new stainless steel AR-15 and that sexy little Glock 21?

[JohnH]

I agree their off-duty security work is subject to SE tax. A police officer who moonlights doing security work is no different than a tax preparer working for an employer who happens to prepare a few returns on the side. (or even a tax preparer who has a side business diong plumbing or electrical work). That "ide work" is self-employment income.

It's not a question of being "exclusively" in a trade or business, but whether the side activity rises to the level of a trade or business in its own right. Regular and continuous involvement in the activity (as opposed to a one-time effort) will almost always make it subject to S/E tax.

[FEDUKE404]

Otoh

I'll argue the "not in the trade or business" line as vigorously as anyone but I also think that a police officer IS in the trade or business of providing security. After all, they drive around in cars with “Protect and Serve” written right on the door. Besides, how else are they going to deduct that shiny new stainless steel AR-15 and that sexy little Glock 21?

I guess the police officer could come out ahead re the SE tax by just painting houses for the entire summer and then ignoring any SE tax on that income??

[DaveO]

I guess the police officer could come out ahead re the SE tax by just painting houses for the entire summer and then ignoring any SE tax on that income??

Not you have it! He just has to find a gig building fence the next year.

[JohnH]

I guess the police officer could come out ahead re the SE tax by just painting houses for the entire summer and then ignoring any SE tax on that income??

I don't think "painting houses" would get him off the hook for S/E tax. He might get by with it if he painted one house, one time, had never done it before, and had no intention of doing it again. After all, that's what the Batok case on this subject was all about (except he was fixing widows, I believe). But once he paints multiple houses, he just announced to IRS that he's in a trade or business, regardless of any other occupation(s) he may be engaged in - that is the distinction.