"Creative Planning" Creates Fraud Penalty

This is a "travel" podcast of sorts this week--the materials were prepared on a Southwest Airlines 737 flying from Phoenix to Baltimore, and recorded in the Hotel Roanoke in Roanoke, Virginia.  This week's topic doesn't deal with any of that--rather it deals with the issue of a CPA that got "creative" in planning with himself and his clients, and in his case he finds the Tax Court isn't amused.  The case is Baisden v. Commissioner, TC Memo 2008-215 where a CPA attempted to get around the self-employment tax by paying "royalties" from his sole proprietorship to himself.  The case doesn't deal with that issue (he had conceded that matter by then) but rather deals with whether he was subject to the fraud penalty.

The materials are available for download at http://www.edzollars.com/2008-09-22_Fraud.pdf .

The podcast is sponsored by Leimberg Information Services at http://www.leimbergservices.com .