WHAT IS A PROACTIVE TAX ADVISOR?
Let’s start with what a proactive tax advisor DOES NOT DO:
• Use aggressive tax strategies.
• Use gray areas of tax law.
• Cross the line from legitimate tax avoidance to illegal tax evasion.
• Red flag your tax return for an IRS audit.
That IS NOT the type of tax planning a good proactive tax advisor provides. There is no reason to engage in unscrupulous tax planning when the tax code is loaded with legal
and allowable tax deductions. The problem is finding out what applies to you is like finding the needle in the haystack, or worse the one needle in a needle stack!
Albert Einstein said, “The hardest thing in the world to understand is the income tax.”
He later remarked about the difficulty of filing a tax return by saying
“This is too difficult for a mathematician. It takes a philosopher.”
The tax code may not be as complicated as the Theory of Relativity. But it is complicated enough that you need a good proactive tax advisor to take advantage of all the benefits offered. UNLESS, you have plenty of time to research the tax code and stay up with the annual changes. But, of course, you will also need to know…
• where to look
• what to look for
• how to apply what you find A Proactive Tax Advisor IS…
• HIGHLY CONSERVATIVE
• FACT and CIRCUMSTANCE SPECIFIC
• BASED ON TAX CASE LAW
• CAUTIOUS
There is no need to look for “loopholes” in the tax law or the IRS code when there are plenty of legal guidelines that you can take advantage of, with the help of a proactive tax advisor, that has the ability to reduce the amount of money in taxes that you pay and the amount of money that goes in your pocket.
WHY USE A PROACTIVE TAX ADVISOR?
Before I answer the question let’s take a look at what one of the branches of our government says about proactive tax planning:
“There is nothing wrong with a strategy to avoid the payment of taxes. The Internal Revenue Code doesn’t prevent that.”
William H. Rehnquist, Chief Justice of the United States Supreme Court
“The law also recognizes that a taxpayer may structure a transaction in a manner that minimizes the tax consequences.”
Gregory v. Helverinq, (Supreme Court 1935)
“A tax avoidance purpose or motive does not vitiate [i.e. make faulty or defective] a transaction.”
Granite Trust Co. v. United States, (1st Cir. 1956)
“A taxpayer’s subjective intent to avoid taxes …will not by itself determine whether there was a business purpose to a transaction.”
IES Industries v. United States, (8th Cir. 2001)
“The court referred to Estate of Strangi v. Commissioner, Knight v. Commissioner, Pasternak v. Commissioner, and Vanderschraaf v. Commissioner, by saying In each case, the issue is whether there was a legitimate business purpose for what the parties did, not whether they may also have had a tax motive for doing it.”
Boca Investerings Partnership v.U.S., (DC District Cir. 2001)
Do I even need to answer the question of, why you should use a proactive tax advisor? Well, just in case, you should because the courts say we can make decisions based on the tax code and because, IT IS YOUR MONEY! KEEP IT!
