June 30, 2016

Nothing is certain except death and taxes, and certainly nothing is as boring as taxes. We know this because there is no TV show featuring a forensic accountant, a telegenic hero who ferrets out the creepy tax cheats among the usual suspects of cabinet members and congressman. Even the CSI shows can dredge excitement out of microscope lens flipping, yet there is no CPA: Peoria. Sure, there could be some  collateral danger in CPA: Peoria. The hero could get his hand stuck in a paper shredder or the tax code’s 20,000 page tome could fall on the hero, breaking his foot. CPA: Peoria could be more humorous than, say, C-SPAN. But how much humor or pathos is involved in filing taxes? Maybe more than you think.

As a tax pro at a retail firm, I have found that every line in the 1040 is the catalyst  for a miniseries. If you don’t agree, I will refund your time spent reading this.

CLIENTS (Name and Address heading  line 0)

An overlooked aspect of tax preparation is getting the taxpayer’s name down correctly. Foreign names can be difficult. For instance, if the former UN leader Boutros Boutros-Ghali came  in for tax  prep, I could easily transpose him to “Boutros-Ghali Boutros” in which case  the IRS would reject  his e-file, causing an international  incident. With luck, you can get an easy name to handle, like Sirhan Sirhan. Of course, for a CPA, getting the name correct should be  like the “200 point” SAT credit, but  I am not a CPA. I don’t even troll as one on Turbo Tax.


Just like Facebook status, 1040 filing status can be fraught with soap opera. A young newly married client came in hellbent to go married filing separately (MFS). When I pondered to say that married filing jointly (MFJ) was probably preferable, he had a separate-but-equal spiel ready. According to this newlywed, everything between him and his wife was separate: separate savings, separate checkbooks, separate investments. He was adamant in not co-mingling finances with his wife. I could extrapolate from this separate beds and separate existences in parallel universes. At any rate, I was able to get him to consider MFJ when I showed him that his family income would be taxed at a higher rate with two MFS as opposed to one MFJ. He only relented when I pointed out that this union of MFJ was only on paper, as no real physical merging was taking place. He said then that he would come back, but I have not seen him since. Perhaps he and his wife are now on separate vacations.


When I was studying taxes, this status fascinated me. It lets you get of the MFJ jail free, if you are married in name only. I had a client who was married but had not lived with her husband for years and was the main support in her one child household.  Under the rules, I could evoke the “unmarried for tax purposes” and allow this client to file  head of household  letting  her claim all  dependent child tax benefits. This a rare IRS rule that makes sense, as absentee parenting is penalized. This status is not to be mistaken for “unmarried for bar-hopping purposes,” or “unmarried for fax purposes, so that OKCupid can send the liberated spouse promo material,” or “unmarried for lax purposes,” which is the similar to “unmarried for bar-hopping purposes.”


I had a client who had $100,000 in gambling winnings, but was also unlucky enough to itemize $30,000 in gambling losses. This woman was a gifted amateur, as a person cannot possibly be a professional scratch card player. But there are professional gamblers, taxpayers who make a concerted effort to make a profit against the odds. They can attempt, then, to deduct expenses and depreciate assets on a Schedule C sole proprietor–at least in Nevada–as follows:

  1. Disguises for getting back into casinos after banishment for card counting
  2. Brooms for sweeping up losing scratch tickets
  3. Depreciating the bad luck from mirror breaking over a seven-year double declining balance method
  4. Fan Duel membership (oops not gambling)
  5. Visits to psychics
  6. Cruise to Bermuda (affidavit that you were in the casino the entire trip)


I was able to find a mistake on a previous return where a tax deduction on Schedule A for mortgage interest was understated  by about $20,000,  generating an amended tax savings of $5,000 or so. On discovering this, the client and I were both delighted. This to me was the raison d’etre of tax prep, akin to an oceanographer raising the Titanic or an Iron Chef whipping up an edible kale dish. I recently called this client to set up an appointment for 2015 filing. It would deflate me a little if I lose her to Turbo Tax. Turbo Tax won’t get excited if it uncovers a big refund. Okay, well maybe it will sound a few alarms.

A colleague brought me in to look at a client’s Schedule A that had  home office expenses (unreimbursed) of $30,000. The client was unabashed about this, just stating that it was the usual office expenses needed for her job. To me this seemed so unlikely. But maybe she had a clothing sweatshop in her basement or had expensive counterfeiting equipment. Perhaps there was an old mainframe lurking in the corner where a washer and dryer once stood. Most likely, though, she had  the backup server for Hillary’s emails.

EXEMPTIONS  (line 42)

The IRS does in fact allow the “slacker  deduction.” A young woman client came in and wanted to claim her boyfriend as an exemption. This lowers the taxable income by  $4000, so I had to question  this claim. It turned out to be legitimate. The boyfriend was an aspiring screenwriter who had no income and was supported by the client. This may not be a good social-economic policy, for lazy  basement dwellers can always argue that they are providing loves ones with tax advantages.

I always ask young twentysomethings if their parents are claiming them as dependents, as then they can’t claim their personal exemption of $4000. The fact is that parents of millennials often assume because they are paying health care for their kids (up to age 26), they qualify as IRS dependents. But if their offspring earned more than $4000 or isn’t in school, most likely they are not dependent eligible. This is hard to accept for parents whose post-graduates are living in their old bedrooms, while they scrounge online for kickstarter funds and run up tabs at Domino’s. Shouldn’t they get life time dependent for their kids after dropping a quarter million on college? When I brought up this issue for one client, it appeared to be the moment she claimed full adulthood. When she called and found out her parents were claiming her in error, she told me in no uncertain terms that she would have her parents amend their return to not claim her, and she would come back and file her return with the exemption. Who said tax filing is not a rite of passage?


The cut-off age for for  child dependent care credit  is twelve, so the IRS approves of 13-year-old latchkey kids. They are deemed capable to come home, settle in, turn off the nanny-cam and party like it’s 2015. Another odd IRS rule is that the cost of day camp can be written off as dependent care, but not overnight camp. Does the IRS assume that every overnight camper is just dumped in the woods to fend for themselves, with the dependent care provider being mother nature?

EARNED INCOME CREDIT (IRS gives you money) (line 66)

With one EIC client I didn’t have to get to due diligence to become suspicious of the claim for an extra EIC dependent. A “nephew” was thrown out as a lucrative EIC dependent living with the taxpayer’s family and supported as such. The only problem was that, although they could name this dependent, the taxpayer and family could not come up with the youngster’s birthday. They were able to zero in on the year, but were hazy on the month and day. I tried to help them. “What is his sign?” or “When was his birthday party?”  “Think hard about  the 100 or so forms you presumably filled out for  this so-called dependent. What was the date entered?” Not suprisingly, this kid did not get included as an EIC dependent.


On some level, all clients are just looking for a wizard-like makeover of their return. They think that the tax preparer is a master attic rummager who will be industrious enough to come up with a lost Van Gogh, when he is more likely to find a missing case of Go-gurt. In fact, in a client’s  perfect world, these would be valid deduction assertions:

  • Mercury in retrograde destroyed my seventh house so I am claiming a casualty loss.
  • My 30-year-old kid acts like a dependent child so I claiming him.
  • I want to claim 800 dependent children who I totally support via the Save The Children Fund, albeit for  25 cents a day.
  • My kid said our trip to Disney over the summer is business expense, because he needs to maintain standing in show and tell.
  • How much exemption for God parenting? I furnish more than half these kids spiritual support.


There is often huge disappointment and some anger in the eyes of clients getting a smaller than expected refund, or worse, owing taxes. I’m sure that they are thinking that a monkey could key into Turbo Tax and generate a bigger refund. In fact some clients decline to pay for the return, so it remains forever on hold at the shop, to be unearthed by archeologists in some future flat-tax age. My biggest impression in two years doing of doing taxes is that people might want to “walk like an  Egyptian,” “be like Mike,” “dress for success,” and think like Spock, but most of all they want to file like a billionaire, i.e. pay no taxes.

Bill Levine is currently a freelance humorist (as opposed to a humor writer), as it is easier to pretentious than funny.  He works on his humorist pithy remarks from his home in Belmont, MA. Email him at wlevine0607@comcast.net.


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