#TechTips – The Sky is Falling!

By Jonathan Rivlin, CPA

It seems that the world ends at the start of each new tax season.

We go to our usual cycle of continuing ed classes, which, as an aside, I have to say that seeing Bob J and Bill L go at each other over the webinars is one of the most reassuring things to be grateful for in the era of COVID19. Moving on; the continuing ed classes we take in the waning months of the tax year bring with it a host of new rules, modifications, extensions, and all sorts of…crazy.

One of the fathers at my kids’ daycare said that he would like to consider moving to the tax prep industry. I asked him what he was doing currently and he said, “I build radars for guided missles.” Not making that up. I replied that, “You can’t prepare a tax return, stick with your current job.” He got offended, as if I were impugning his intelligence.

Not true! I explained that, “You deal with logic and rational thought processes. Your equations are F=MA and a2+b2=c2. We deal with Assets = Liabilities + Equity and Gross Income – Adjustments = AGI – (Greater of Standard or Itemized Deductions) + AMT (if applicable) – non-refundable credits + excise and surtaxes – payments and refundable credits – liability or refund (to apply or payout) + penalties and interest if applicable. You deal with gravity and the laws of mechanics. We deal with the gravity of fear and greed.”

He stared at me as if I were speaking gibberish.

Finally, I said it like this, “I only got better at practicing in this profession when I stopped trying to understand the tax law.” He then laughed and we went into the daycare to pick up our kids.

The point of this story is that while we attempt to impose a professional construct of rational thought and reasoned processes, the fact is that there’s a lot of subjectivity in what we do.

No greater evidence of this is felt than when I hear the conversations at a lunch break (when we still had in-person seminars) about how, “I’m going to retire after this season! This new law or that new rule makes no sense!” That would be our fear, or exasperation.

Recently, in the barouque time of February 2019, one of the big issues we were rending our garments over was the IRS’ position that we’d have to include the value of parking spaces in the gross income of our employees thanks to some problematic interpretations of IRC Section 274s more arcane sub parts.

Your humble Tech Tips was dispatched to write a post about it. I did research the matter, noting that the AICPA sent a detailed request for clarification to the IRS, of which the latter responded to the former with IRS Rev Proc 2019-99.

The general idea was that whether an employer owned a building, or simply rented an office, they’d need to take some insane conjuring of numbers to ascertain the value of a parking spot and remove said value from rent expense and include it in salaries expense.

I can think of a lot of replies to such a notion and none of them are fit to print, which is one reason that article was never written. Your humble Tech Tips couldn’t get more than a few sentences out without wanting to kick a hole through the monitor.

Recently, the IRS realized that even they can push too far and reversed itself with the requirement.

The entire controversy rendered itself moot.

The point here is to take all of the nonsense that gets thrown our way with a grain of salt. Even the QBID stuff hasn’t been that big of a deal. It’s just another form to fill out – and bill for. And it will go away at some point.

Tax provisions come and go.

We need to keep an even keel.

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