Best Tax Strategy That’s NOT Too Good To Be True and Audit Proof

By February 26, 2018 Tax Strategy, Taxes

Good News – You know a Tax Genius with the Best Tax Strategy that’s AUDIT PROOF

Today I want to talk to you about something that will have you grin from ear to ear.

It’s not something cheesy.

And you know how we avoid the fluffy tax strategy sandwiched with sexy words to make it sound better than it is.

Today is no different. It’s the real deal blow your mind kinda article.

If you stick with me till the end you’ll learn how you could be saving $3,000 – $6,000 in taxes this year.

And to fully feel the true power of this I need to build in some context.

An Audit…

Eww it’s like a swear word hearing that.

Unfortunately, sometimes they happen.

Whether a taxpayer mistake or one that started because the IRS is stupid.

Either way, I want to tell you a story about a recent audit that applies to you.

I have a client who I have been working with that got a letter they were being audited.

The reason was the client setup their merchant account under their SSN instead of their business EIN.

So the IRS was expecting to see a big chunk of income on his personal return, but instead we reported it on his business return since it was business income.

But that still confused the IRS.

During the assessment of the client’s accounts our corporate rent tax strategy was brought up.

Quick side note: Corporate Rent is the best tax strategy where your business rents out your home and you don’t have to claim that rental income as taxable income.

It is HUGE!

So from the beginning of this audit the IRS protested Corporate Rent.

This went on for three years.

Another side note: I thought it would be informative to tell you how the process of a normal audit goes:

  • IRS asks for the information they’re looking into
  • We provide IRS with the info
  • IRS makes an assessment based on the info provided
  • End of audit IRS makes “adjustments” that taxpayer owes or the audit is closed

Having dealt with the IRS for more than a decade, we know what is worth fighting and what is the best cost/reward situations. We know the IRS is usually wrong and how to show them they are wrong.

And we can do that without going to court, because going to court is super expensive.

Rather we can go to Appeals which is less expensive and it’s a place to still contest the IRS’ position.

So this is exactly what we did for our client. We went to appeals.

The part that is annoying is the IRS are BULLIES and incompetent.

We’ve dealt with a lot of auditors that think they are kings and others that don’t even understand the tax laws they are claiming to defend.

In this specific case, we were dealt a real treat of an auditor.

They were so incompetent that we had to go through the appeals process 3x because the auditor didn’t even understand how the IRS process worked. So back and forth we went until it went through.

After 2+ years we finally got into Appeals.

During the appeals process we wrote a very specific letter detailed with our clients’ accounts.

The letter was so detailed and thorough the Appeals officer complimented how great it was!

They said it was so thorough it was the best one they had seen.

After that letter explanation and a few conversations, we finally reached the end result.

IRS RECOGNIZED THE CORPORATE RENT STRATEGY!

One thing to reaffirm is the IRS are bullies and they want you to pay as much tax as possible and will lean towards you being guilty until proven innocent.

You want someone who has your back and isn’t afraid to stand up to them for you.

This is a huge victory for many reasons, but one being that if you’re not using this strategy in your situation you should be.

Through this whole experience we did uncover big MUSTS you have to do to make this legitimate for you.

Two things you need to make this untouchable:

  1. Your meeting minutes that you take every meeting need to be different. You shouldn’t be talking about the same thing every month and especially not writing down the same thing every month
  2. It will help if you write down other people that are there, and not always just your spouse. Whether that is a colleague, a business partner, or even a prospective client, or other vendors you deal with

Again, this is huge because you can rent out your home to your business – so your business pays you up to $15,000 of a rent expense and you get to keep that $15,000 tax free!

If you’re wanting to use this strategy right now and take home $15,000 tax free this year then…

Learn ALL the details by checking out the Corporate Rent Packet Here.

 

One Comment

  • Lex Udy says:

    Great strategy! Thanks to you, for the past few years, we have been getting $1,250 per month from each of our two Family Limited Partnerships which comes out to $30,000 per year. We have accounted for it as an Investment Expense each month in our Quicken financial records.
    Lex Udy

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