Sunday, December 4, 2011


Would you rather be safe than sorry?  Or are you willing to take an aggressive approach to reduce your taxes?
My policy is to let my client make the decision after I've explained the possibility of IRS challenging the aggressive approach.
There is one big risk that you need to avoid if you take an aggressive approach.  If you try to sneak it in just hoping it may slip through, it can cost a lot more than if you lay your cards on the table instead of trying to sneak it through.
When taking an aggressive position, you should always include FORM 8275, Disclosure Statement, explaining what you have done and the Revenue Ruling or other basis for your position. 

Of course, you should never take an aggressive approach unless there is something to support  your position as reasonable even if is not accepted by the IRS or tax court.

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