The hard drive on one of my computers "crashed" yesterday. I received a warning it was having problems, and it wouldn't boot even as a slave drive. As you might expect, the computer repair tech asked for some "free" tax advice (his wasn't). He also has a Sch C business that does video productions. Apparently, in 2005 he prepared a video production for a non-profit organization and billed them at much less than his normal rate (my guess is he has little market for his normal rate). On his tax return (which I didn't see), he claimed the more than half of his normal rate as a contribution. He had received several notices from the IRS (and ignored them) indicating he owed taxes on his contributions that exceeded 50% of his income. Go figure...the IRS didn't question the contribution, just the amount. Now, he's receiving levy notices. I explained he should have paid the bill promptly because he shouldn't have deducted anything because the excess value of his services isn't a contribution, but could deduct any costs incurred. Of course, he didn't believe me. I didn't really feel much like debating "free" advice, and suggested he pay the bill and hold his breath. The amount of additional tax assessed was $850, I assume this means we're talking about a $5,667 contribution amount at the 15% bracket.
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Last edited by Zee; 04-04-2007, 01:19 PM. -
Well here is what I would do.
I would claim a charitable donation of my usual fee for tax advice. Then if I ever got an IRS notice about the event, I would forward it to him along with a note telling him to pay it......
Sure I would. Hee Hee. -
Don't let him near
your computers.Comment
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