Despite what the title of Sean Connery’s last James Bond film recommends, there are times when you can say “never”, especially when it comes to tax returns. Here are five of them -
1. NEVER accept tax advice from anyone other than a professional tax preparer. Don’t listen to a broker, a banker, an insurance salesman, or your Uncle Charlie! You wouldn’t ask your butcher for a medical opinion, so why would you listen to tax advice from your MD?
2. NEVER ignore correspondence from the Internal Revenue Service or a state tax authority. When you get a letter or notice from “Sam” or any of your other “Uncles” give it to your tax professional immediately.
3. NEVER assume that a notice you receive from the Internal Revenue Service or a state tax authority is correct. More often than not it is wrong. To repeat, when you get a letter or notice from “Sam” or any of your other “Uncles” give it to your tax professional immediately.
4. NEVER hold up filing your return, or an automatic extension request, by the April statutory deadline simply because you do not have the money to pay the tax you owe. It is important that you file your 1040 or 1040A, or 4868 extension application, by the April 15th deadline, even if you cannot pay all or any of the tax due on the return. Along the same lines, if you have requested an extension be sure to get your tax return in the mail by October 15th, again even if you cannot pay all or any of the tax due. The penalty for paying late is .5% (1/2 of 1%) of the tax due per month. The penalty for filing late is a full 5% of the tax due per month – 10 times more!
5. NEVER have your tax return prepared by one of the “fast food” preparation chains, especially the one that bears the name of the two brothers (in the literal sense – no ethnic reference). You will pay gourmet restaurant prices for fast food service. And, now that I think about it, the “products” at McDonald’s or Burger King are superior to those of these tax preparation chains.