I just realized how far we are into the tax season and how little I’ve written about this all important subject. Whether you’re a regular retiree, a going to retire soon worker or, most especially, a CSRS or FERS retiree or prospective retiree going through divorce, let me give you a little of my own personal wisdom (Disclaimer, I am a lay person and none of this advice should be taken as tax, legal or investment advice)
First of all, should you do your own taxes?
In my view, in many cases, yes. If:
- You are up to date on current tax events
- If you use decent, commercial tax preparation software
- If your tax situation is simple and you already have had your finances looked over by a true professional in the recent past.
- If you are willing to bet that a few hundred dollars won’t save you thousands
Should you use one of those National Brand storefront preparers?
In my view, never.
- Most of the people in those operations likely know less about taxes than you do. They frequently join one of those companies from the nearly free “quickie” training a month or two before tax season and they basically will charge you a bundle to do no more than you can do yourself with a standard software package.
Many of those organizations make their real money on “instant refunds” otherwise known as “Pay day” od “PayDay” loans that charge you an exorbitant interest rate to get the same money (less their fees) that the IRS will send you back for free.
- And the biggest reason I wouldn’t go with any of these guys is they are preparers only, they can not legally give you advice in either the accounting or tax law fields.
So, Then I Should Use a CPA?
Not in my book.
- A CPA is a degreed (and in most states accredited) business professional whose expertise is in the field of accounting.
- If you are setting up a business then you need a CPA.
- Many CPA’s know no more about personal taxes than you or I
- They have no special qualifications to give the kind of advice you really need.
Enough with the twenty question, What Do I Do?
I say, hire a tax attorney. “Wow, a tax attorney, RP, aren’t they expensive and isn’t that sort of overkill”? As we say here in the Philippines (my retirement haven), ‘Sup to you. If you want to pay for advice then I feel it’s worth paying for advice that is worth something. There are two major reasons a tax attorney is the best bet for tax advice:
- Only tax attorney gives you the all-important “attorney-client privilege” to confidentiality concerning your conversations and disclosures.
- You must be very careful in your tax dealings … asking what seems an innocent question may look very bad later if the person you asked it of appears on the stand as a witness (willing or unwilling) for the IRS.
- Only attorneys are legally exempt from being forced to testify against you.
- Attorneys do not have to repeat to the IRS or your divorcing spouse’s attorney what you’ve told them.
- Your C.P.A. or tax preparer CAN be forced to testify against you in a criminal trial.
Complete and legally sufficient advice:
- Only a Tax Attorney can tell you ALL your options you qualify for, including tax bankruptcy
- If you wind up needing It’s best to call a tax attorney first.
- You don’t need to learn about legal options you may have after it is too late to use them.
So there you have it, for what my thoughts are worth.
As always remember that this site, although written by a retiree with substantial experience in the school of hard knocks, it is for personal, lay opinions and informational purposes only. If you have a legal question you should seek help from a legal professional. If you have questions involving current or future values of pensions you need an actuary or competent pension valuation expert. If your questions are tax-related, seek a competent tax advisor. In other cases, I recommend the base chaplain.
You can comment on this post, you can email me at: davestarr (at) gmail (dot) com or you can call me at: 1-719-423-8872
If you really need an accurate reading on a case involving these issues, Iâ€™d suggest you call Bill â€” 719-475-7529