All Physicians must take the Hippocratic Oath. This is an oath where they swear to practice ethically. Although there is some debate about the translation, the main theme is, ‘First, Do No Harm.’
All taxpayers need to take the Hippocratic Oath so they do no harm with their tax plan.
Here are 4 Easy Ways for Taxpayers to ‘Do No Harm.’
1) File all Returns When Due and Pay All Taxes Timely
Nail this one and you are more than half way home. Can you file extensions? Sure, that’s your right. Just be sure to file on time and pay the taxes when due. By just doing this taxpayers will eliminate much of the harm that can be self-inflicted. Understandably, the economy has made it difficult for some taxpayers to keep up. The penalties and interest for failing to file or pay on time can be draconian.
2) Keep Good Books and Records
This goes without saying, which is why it needs to be said. Although the odds of being audited are fairly small for many taxpayers, you need to be prepared. Having a good set of books and records is not the ‘best practice.’ It is a requirement.
As an attorney once said to me, “There’s nothing like a good set of facts to support your case.” I couldn’t have said it better. A good set of books and records will help support your facts.
3) Don’t Represent Yourself in an Audit
It has been said that when you represent yourself; you have a fool for a client. This is oh so true, particularly when dealing with the IRS. Don’t represent yourself, give your CPA a Power of Attorney to represent you in front of the IRS.
4) Meet with your CPA to Review Your Tax Planning
The tax code is very complex and constantly changing. To take advantage of any planning opportunities consult with your CPA. This is where you are now moving from ‘Do No Harm’ to ‘Do Some Good.’
ACTION ITEM: Taxpayers need to ‘First, Do No Harm’ with their income tax planning.
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Tom Scanlon has over thirty years experience in public accounting with an extensive background in the areas of financial, tax, and estate planning. He prides himself on providing in-depth and customized solutions to privately held businesses and their owners. He is a Certified Public Accountant and Certified Financial Planner®. Tom is a frequent speaker for area organizations and has recently been quoted on CNBC, Fox 61 News and AARP's blog. Tom also has been a guest columnist for numerous publications including The Wall Street Journal, Barron's, Money Magazine, The Hartford Courant, The Hartford Business Journal, and The New Haven Register. He is a member of the American Institute of Certified Public Accountants, the Connecticut Society of Certified Public Accountants, and the Financial Planning Association. Active in the community, Tom supports a variety of not-for-profit organizations.
