Stop me if you've heard this before. "I wish they weren't called the Bush tax cuts. If they were called someone else's tax cuts, they'd be less likely to be raised," the former President told some people who still listen to him speak about anything. Just save us the trouble and play it on a loop, wouldja? [CNN via Ritholtz]
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Deadline Watch: The Tardy Client
A little over 24 hours from now, anyone that is currently up to their asses in 1040s will grab the nearest person and try to shameless make out make out with them like it’s V-J Day.
Between now and then however, a client will call some of you DEMANDING that you complete their return that has a dozen K-1’s and a mind-numbing AMT calculation, before the midnight deadline. Oh, and they don’t want to pay any tax.
You, typically being the mild-mannered accountant, just up and lose your shit on this unsuspecting client, who then realizes their tardiness is the cause of this little conundrum, not your lack of a magic wand.
Congrats! You’ve successfully convinced a client that they’ll be filing late, paying a penalty and hereby suck at life. They deserve it anyway, asshats. Feel free to discuss your favorite delivery of last minute bad news to clients and enjoy the next 24 hours, 1040 trolls.
Sometimes Billionaires Get Bad Tax Advice, Just Like Us!
It’s probably safe to say that billionaire hedge fund manager Leon Cooperman doesn’t get poor service very often. As the founder of Omega Advisors and #655 by Forbes‘ last count, the man has arguably earned the right to demand only the best, especially when it comes to something as important as tax services.
How that Cooperman is just the latest billionaire to have tax issues (McCombs, Anschutz have had troubles recently) that might cause a less prudent mega-rich person to flip their lid (e.g. Ted Turner, Steve Jobs).
Cooperman recently received a letter from the IRS informing him that despite the generous gift of $43 million to his own foundation, the contribution could not be allowed because the donation was a non-marketable security made to a private foundation, which is not allowed by the IRS. Had he made the donation to say, NORML (he looks like he could get behind it, couldn’t he?), or some other public charity everything would have been hunky-dory.
Unfortunately for Mr Cooperman, this isn’t the case and the IRS sent him a bill for $14 million in back taxes and $5 million in penalties. Understandably, this aggression will not stand and the “plain-speaking” Coop has taken the case to court to insist that he relied on his accountants to get this shit right. It’s complicated, after all. It’s not about the money, it’s the principle. Coop would gladly schlep in suitcases of consecutively numbered hundos to settle this here and now but the penalties are uncalled for and he’s bound and determined to prove that. But who actually is to blame?
The lawsuit says Cooperman’s two personal returns claiming the deductions were prepared by his longtime accountant, Mark I. Gittelman, a CPA with Gittelman & Co., Clifton, N.J. The formal appraisals to support the claimed deductions were done by RSM Business Services and Duff & Phelps, Cooperman’s suit adds.
[…]
McGladrey does tax work for other Cooperman entities, including his hedge fund, Omega Advisors. Cooperman told Forbes that McGladrey knew he was planning to donate a nonmarketable security to his private foundation and take a deduction when the firm rendered its appraisal for a fee that Cooperman said was about $20,000.
Again, the money isn’t important but for crissakes, McGladrey, you just don’t half-ass your work for Leon Cooperman. Forbes was all over this issue back in ’04. Where were you in 2004? Stumping for John Kerry?
Of course we all know where this is eventually going – litigation! When rich people get wronged, someone inevitably pays and it sounds like LC is happy to sit tight and let the tax court do its thing. Once that’s resolved, he’ll turn his sights towards the responsible parties:
Cooperman clearly is thinking about malpractice litigation. He acknowledged McGladrey is likely to assert it didn’t prepare or sign the tax returns with the disallowed deductions, although the firm’s formal appraisal was attached.
Best of luck to everyone involved!