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Do You Suffer From Late Filing Syndrome – Busy Season Rerun
By Stacie Clifford Kitts, CPA
I just love this story – so I am posting again as part of my busy season reruns.
Can’t seem to file your tax returns on time? Do you have an aversion to paperwork?
Well – you’re not alone. You could be suffering from a controversial syndrome which makes it difficult for you to face the ordeal of completing your tax return.
Still not sure? Take a look at the additional following criteria. Does this sound like you?
Are you sophisticated, both financially and with respect to taxes?
Is the ultimate discovery of your failure to file obvious to you?
Are the potential penalties, financial and professional, clear to you?
Do you acknowledge that penalties will likely occur?
Is there no clear benefit to not filing because there is no significant tax due, or you have the money to cover the tax liability, or you can easily barrow the money to cover the liability?
Do you have a history of filing in the past?
Do you file extensions and pay estimated tax payments?
Are you anxious and obsessed about not filing?
Do you exhibit self destructive behavior by waiting to file your returns until the IRS is upon you?
If this sounds like you, you may be exhibiting symptoms of “Late-Filing Syndrome.”
According to tax lawyer Richard S. Kestenbaum, Late-Filing Syndrome is the reason that five years of tax returns amounting to approximately $300,000 of tax liability, penalties, and interest were not filed by New York Governor chief of staff Charles O’Byrne.
The New York Times reported that “late-filing syndrome, sometimes known as non-filing syndrome or failure-to-file syndrome, in not listed in the Diagnostic and Statistical Manual of Mental Disorders.” However, according to the Times, “legal experts said that it is not uncommon for tax evaders to claim they suffer from such a syndrome, because it can shield them from criminal penalties.” This is true because the IRS must prove that a tax payer willfully intended to evade paying income taxes.
I must admit, an aversion to filling out paperwork is something I certainly can relate to – especially around April 15.
Absent further evidence, this syndrome appears to be a creative and possibly effective attempt by attorneys to protect their clients from criminal prosecution.
Highlights From The Stupid Preparer Files
By Stacie Clifford Kitts, CPA
Here is my latest addition of the stupid preparer files. Again – mind boggling. This preparer tried to scam something as stupid and easy to track as buying a house. The thing that is most disturbing about this case, is the fact that this guy thought he could get away with it.
Today the Internal Revenue Service announced that it has successfully prosecuted James Otto Price III for falsely claiming the first-time home-buyers credit on a clients federal income tax return. Mr. Price faces up to three years in jail and a $250,000 fine.
The IRS warns potential fraudsters to beware as they have implemented technology that automatically searches for and identifies potential fraudulent claims. The IRS currently has 24 open criminal investigations and has issued seven search warrants related to the fraudulent use of the credit.
“We will vigorously pursue anyone who falsely tries to claim this or any other tax credit or deduction,” said Eileen Mayer, Chief, IRS Criminal Investigation. “The penalties for tax fraud are steep. Taxpayers should be wary of anyone who promises to get them a big refund.”
Taxpayers are reminded that even if they utilize a paid preparer, the taxpayer is still responsible for the accuracy of the return.
The IRS says:
“The First-Time Homebuyer Credit, originally passed in 2008 and modified in 2009, provides up to $8,000 for first-time homebuyers. The purchaser, however, must qualify as a first-time homebuyer, which for purposes of this credit means someone who has not owned a primary residence in the past three years. If the taxpayer is married, this requirement also applies to the taxpayer’s spouse. The home purchase must close before Dec. 1, 2009, to qualify, and the credit may not be claimed on the purchaser’s tax return until after the taxpayer closes and has purchased the home. Different rules apply for homes bought in 2008.”
Stacie's Tax Stuff 