Billion Dollars In Losses From EY Tax Shelter Knocked Out By Tax Court
There is an old accounting joke about a fellow who came to work every day, opened his desk drawer, looked at a slip of paper, closed the drawer, and went to work. Everybody was curious about the mysterious piece of paper, but they respected his privacy. Finally, though, somebody broke down and took a peek. On the paper was written “Debit by the window. Credit by the Door”.
Debits have to equal credits. Assets have to equal the claims against assets (i.e. liabilities and equity). It has to balance. Accountants get so fanatical about this, that they sometimes confuse things being balanced with things being right. You can be in balance and things can still be wrong, but it can never just be one thing. The discipline of double-entry means that a mistake in one area will also crop up someplace else as long as you are in balance. Scoundrels hate the discipline of double entry.
Take Care If Filing Jointly With Financially Irresponsible Spouse
We don’t know whether Terry’s accountant knew whether or not he was paying the balance due on the return. If he or she did, then there was a failure to recognize that Robin was also a client, whose interest was not in alignment with Terry’s. This is a pretty common failure of tax preparers who focus on minimizing the tax without considering collection issues. Even though it is usually not the right answer, filing separately should always be an option.
Follow Me
Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.