Accounting, Taxes and Coins

Many cases of art works being audited that way. I am not aware specifically of a coin case, but both fields are collectibles, so I doubt its any different. How it would work is a dealer would get audited, and in his records shows buying from you. Then you get a letter audit. Or you sell on Ebay and the IRS has all of these electronic records, or through an auction company. Its amazing the amount of detailed records the IRS gets every year, and any single record like that they can simply send you a letter audit proving you accounted for this transaction correctly.

Now, if a guy sells for cash at a show, no trail. This is why they wanted the new 1099 rules, to force everyone to have a trail for every transaction.

Chris

 

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I guess I would disagre with the "honestly" part. If a person is not a tax expert, they are in no position to judge the legality of a preparers methodology. Unfortunately tax rules have enough "wiggle room" for differences of interpretation usually. It is up to the taxpayer to let the tax preparer how aggressive in a tax position they are comfortable with.

 

Let me tell you what I mean.

I went to a CPA for unfiled years. He gave me three different possible versions on each year, with vastly different ranges of taxes due. He asked me to return the unfiled returns. I went with the maximum amounts because that was the honest thing to do. I also had the IRS' master file on me which had no real records of my transactions because they were based on self-employment without SS number matching.

This dishonest by the CPA was just for starters, I could give you a lot of other examples. I reported him to the state accountant board and they referred the case to the center in Maryland where these issues of fraud are addressed. Of course, they could not verify my charges, because I did not make copies of the unfiled returns or record his voice as he was admitting extensive fraud.

Like I said, sometimes you have to stay after a professional to get honest filings. Confidentiality does not apply with the client on cases of fraud; and some clients if they are members of regulatory organizations are duty bound to report fraud.

There is a warning by the apostle Paul in his letter to the Cretians, that "they are always liars". The puzzle maker Sam Lloyd once gave a tale on this passage, where a man is visiting Crete where he asks for directions. If the Cretian is a liar, what do you do with the directions you are given?

Of course, there are many good CPAs available. Dan Pilla, Jr. has a useful site, Taxhelponline. His father is a famous tax protester. Kind of like Irwin Schiff and his son Peter Schiff. One brakes the law and is in jail, the other figures it is better to fight for the truth on the outside.

 

If the CPA, after you informed him of income, then prepared tax returns not reporting that income, then you are completely right sir. I was talking about treatment of income or expenses for tax purposes, and how interpretation of laws can vary. There is no wiggle room in not reporting income, and you were right to turn the shyster in.

Many times people think accountants are shysters for preparing two different returns, but these are simply different ways of interpreting the law. This is not illegal, since it is simply two honest ways of preparing a return, and the taxpayer has to make an informed opinion as to which way he wishes to file. If the IRS disagrees, but there was a legitimate basis for thinking a certain way, all the taxpayer is responsible for would be interest on the money. Penalties only apply if there was no legitimate reason to file the way you did, which not reporting income of course would entail.

Chris

 

State sales and use taxes have nothing to do with IRS and US treasury case law. State taxes are codified in well.... state law., not by the federal government. Furthermore state laws vary by all 50 states. There is no way to make a blanket statement on state use taxes. The Federal government does not collect sales tax.

Whether a party is liable or not for a use tax on a purchase made in another state is highly dependant upon the circumstances and what the state defines as those circumstances. I believe there are also several court challenges that raise constitutionally issues with these laws. You mentioned NC in your post and it had a similar tax, the intangibles tax, tossed out a number of years ago. The state had to pay back those taxes to those who actually paid it.

 

I'm still trying to figure out the state system for filing sales and use taxes. I don't think it applies to me in most any case. If I sell to wholesalers in other states or through an auction, I do not see where I would be liable.

The surprising thing on the state to me on this is how slow they are to catch people and with what heavy hands they come down if they want to make an example. Check out the state DRS site for CT to see how they arrest people and hit them with heavy fines.

The longer and older a tax system is, the more is owed in taxes, penalties and interest not to mention the endless amusement to the rabble.

 

A related question - if we have to pay 28% collectible tax then we can deduct related expenses such as attending coin shows, parking, mileage, meals, etc?
If we can't deduct expenses then the law should be changed, IMO.

 

I also wrote, if you bothered to notice, that I had Sales and Use tax experience. In fact I was a manager in the tax department for a corporation with nexus in all 50 states, directly managed the returns for 18 of them, and had experience with the others since we rotated states. Are you even aware of the multi state tax commission or the uniformity of sales tax laws generally? How about the resources available to professionals that quickly compares and contrasts the laws in each state, like Versatax? What is your expertise Fatima? You like to throw dirt at others, what is your background so others here may judge which of us may be more useful to listen to? If it is similar or equal to mine, I have no problem getting into a very dry, boring discussion on this topic. I suspect its not.

Please ask before you try to besmirch others Fatima. I will almost guarantee you I am more knowledgeable on most facets of all taxes than you are. And yes, there are certainly blanket statements on Sales and Use tax law since the right to tax is limited by the US Supreme Court and their multiple rulings in this area. I asked politely if anyone wanted more information, you could have had the common courtesy to reply that you did. You say there are court cases, well there are always court cases, but until the Supreme Courts landmark rulings are changed, they stand as the last ruling on the law. I seriously doubt most of the current crop of untenable state reaches for more revenue will ever pass muster with the high court. The 1992 case was unusually clear and to the exact point. If you have details of a case you believe can overturn these controlling cases, please bring the case up. You mention an intangibles tax, well if you were fluent in tax law you would know that intangibles are not controlled by the same case law as sales and use taxes are.

Again, if anyone wants to discuss the court cases deciding nexus, multi state tax commision rulings, or any other aspect of this subject I am willing to do so, but its a boring subject to most, so I was trying to not post it all here.

Sorry for the rant.

Chris

 

If you do not qualify as being "in business", (different states have different definitions), then you do not have to register for sales tax collection at all. This sales tax collection, even if you had to register for it, would only apply to sales in the state you do business in. You would have to see nexus regulations to determine that.

Basically if you are a collector and not a dealer you do not have to worry about it. The buyer, since you did not charge tax, would be legally liable to pay use tax if it applied to them.

Hope that helped.

Chris

 

Yes, I said before that personal acnedotes where you pat yourself on the back for knowing more than anyone else, are ignored by me and are irrelevant. (al la "Oh I am an expert so I can't be wrong") I comment on the facts points posted in the topic. I also ignore the ranting. As I have said before, you can take the tactic of attempting to cast doubt on the party who is responding to you, but that just means you can't defend what you have said.

When you want to respond to the actual points I have made, I will get back to you.

 

The landscape has changed quite abit since most of the court rulings governing nexus and sales tax were laid down. Quill vs South Dakota almost tipped the scales in the state's favor. With the deregulation and centralization of banking into the multi-state entities we have seen over the last 30 years - I feel new litigation if persued could change the landscape. The fact that now most businesses deposit their funds into banks that maintain branches in other states and that the banks co-mingle their funds without respect to state borders could be enough to establish nexus. It certainly gives the state an avenue to levy and lien an out of state business's banking assets. Being that bank into which their funds are deposited could be subject to a state's jurisdfiction.

Take Bank of America as an example. They operate brick and motar branches in 33 states. If a business maintains an account with Bank of America - this might be enough to establish nexus in the other 32 states. It certainly gives these states a backdoor to lein and levy a business's banking assets whether a busness maintains any hard assets in that state due to the fact their bank is subject to the state's jurisdiction.