I remember when I got out of surgical training and started my new life as an adult (at 33 years old), I was terrified by anything related to audits or legal issues.
Any time I got a letter from the IRS about anything, I broke out into cold sweats. Every time I got a letter from an attorney I would do the same—-even though most of those letters were actually advertisements.
Now, 47 years old and owner of multiple businesses and complicated financials, I don’t have visceral reactions to any of this stuff anymore.
Why? Well, when it comes to taxes, I would venture to say that any business owner making a lot of money will likely get audited eventually. After all, what is an audit?
An audit is an inspection. If you aren’t doing anything wrong, then what are you worried about? I’ve been through three tax audits now.
In all cases, I did nothing wrong. I broke no laws. The audits mostly focussed on documentation. In some cases, the documentation was not done as well as it could have and that’s what the auditor wanted to focus on.
In my experience, the tax audit process is just a negotiation. If you get audited, they are going to find SOMETHING no matter how ridiculous it may seem. Then you come to some kind of settlement.
The legal system in general works on these principles. That’s why I don’t really fear frivolous lawsuits anymore. Very rarely do things go to court. The dirty little secret is that whoever has the most money usually wins disputes simply by draining the opposition of financial resources that cover legal fees.
Once you realize that complexity of the real world, it’s much easier to sleep at night with audits and legal issues.
One more point. If you have good asset protection, that’s another reason not to worry about frivolous lawsuits or even legitimate personal liability. Talk to my attorney friend Doug Lodmell about that one.
But getting back to taxes, I want to emphasize that most of the tax code is gray and you need to have a quality tax professional on your side rather than a robot who just keeps telling you why “you can’t do that”.
As you know, my CPA is Tom Wheelwright and I highly recommend you consider someone on Tom’s Wealthability team. However, it’s really good to get different perspectives as well. That’s why this week’s interview with tax attorney, Stephen Moskowitz was really eye opening for me. If you make a lot of money and worry about taxes and audits, you are not going to want to miss this episode of Wealth Formula Podcast!
Steve Moskowitz knows that clients’ lives – and livelihoods – can be upended or even destroyed when tax trouble arises. As a tax attorney for more than 30 years, Steve has made it is his personal mission to help business owners and individual clients successfully resolve tax issues and go on with their lives. With extensive knowledge of tax law, a desire for swift and vigorous defense, and decades of experience with tax authorities and in the courts, he has unusually perceptive judgment in assessing the best way forward, and the right resources to achieve resolution.
Steve started Moskowitz LLP because he saw that while big corporations were consistently navigating the tax code to their advantage, smaller businesses and individuals were not. With prior experience as a CPA at a national accounting firm, and with extensive experience in the corporate world, Steve knew he could help smaller businesses and individuals by applying what he knew, and wanted to make the critical difference in businesses and individual lives that protected them from the powerful government and enabled them to keep and enjoy the fruits of a lifetime of work that otherwise could be taken away from clients by the government in just one action.
Today – together with a full team of tax attorneys, CPAs, enrolled agents and other professional staff – Moskowitz LLP helps business and individual clients across the country and overseas to resolve a wide variety of tax matters. The Moskowitz LLP team also creates strategies to utilize the tax code and relevant treaties to clients’ benefit, and provides ongoing tax support and tax return preparation.
Steve understands that clients need high quality representation but do not have unlimited budgets, and that cost predictability is important. Unlike most firms, Moskowitz LLP clients pay a flat fee and are not subject to hourly rates.
- Cost Segregation Analysis
- Should you be scared of audits?
- What is the difference between being represented by a CPA and being represented by a tax attorney?
- What is the discriminate income function?