Chronicles of Tax Advisors
2015 was a great year! A new tax season is here, so let the blog today be the last time we reflect on our cases in 2015 before we restart our regular blog schedule in mid 2016. This will be about a case where Louisiana state legislature affected the outcome of the federal tax return. Our client is employed as a school bus driver. Louisiana legislature states that the 1099-MISC received for bus rental is actually a reimbursement for operation expenses for independent school bus drivers and are not considered wages for self-employment. The driver receives a W2 as an employee for driving and a 1099-MISC for operation reimbursement of annual bus costs.
Our client’s returns were prepared by a CPA that did not understand how to report this on the return. As a result the client had paid taxes on several years that they did not need to. Unfortunately, IRS statutes allow you to go back only three years for amended return refunds. There were two tax years that we could amend. The taxpayer had paid taxes in those two consecutive years of over $5500 and $9300, respectively. We amended those two years applying the state code to the federal returns. As a result, we were able to secure over $13,000 in federal refunds and over $1,000 in state refunds.
Todd Ancona, EA
Licensed to practice before the Internal Revenue Service
An Enrolled Agent (EA) is a federal authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audit, collections and appeals.