4 ms·

I actually talked with an accountant in the US my first tax year living year, and her advice was "don't use an accountant". I have no idea if this is true or no

by deong 11y ago

I actually talked with an accountant in the US my first tax year living year, and her advice was "don't use an accountant". I have no idea if this is true or not, but according to her, the IRS's view is basically, "we know this is complicated stuff, so do your best, and if you make a mistake, no big deal", whereas if you hire an accountant and get something wrong, the assumption is that you're trying to avoid taxes.

ptaipale 11y ago
That advice sounds to me a bit like if you go on trial for some small thing (let's say a pub brawl), and you're told "don't get a lawyer, it will make you look bad". Perhaps it is sometimes a good advice, but it can also be a spectacularly bad one.
- deong 11y ago
  Yeah, I was a bit leery as well, but my situation isn't that complicated, so I saved the money and did it myself. Will update from prison later if it comes to that. :)
vidarh 11y ago
It seems tax authorities can be surprisingly flexible as long as they don't get a whiff of attempted tax evasion anywhere. E.g. at some point around 2000 or so, I'd just moved to the UK, and my personal finances were total chaos around the move. I'd sold quite a lot of shares in Norway, and traded quite a bit on NASDAQ via a US brokerage account (in 2000... yes, it got ugly; thankfully not that much money), and had income from both UK and Norway split between employment and contracting in the same tax year. And transfers back and forth between my UK, US and Norwegian accounts... To make it more annoying, UK and Norway have different tax years (Norway follow calendar year, UK does not). And to be honest my record-keeping at the time was shoddy to the extreme. So I wrote a letter to UK and Norwegian tax authorities where I set out the details of my income, assets and losses as best I could. I told them I had no clue how to accurately figure out exactly what was due (for the US it was easy because it was all losses that year; the US brokerage account was just relevant because it provided deductions for losses on my Norwegian taxes). Gave them a number each that I thought was close to correct. Filled in my tax returns with estimates (and explained in my letters that the numbers were estimates). Both just accepted my estimate with no arguments, and no requests for further documentation. No fines, or angry letters, or conflicting estimated tax calculations or anything, which was what I feared when I sent it all off.
- morgante 11y ago
  I don't know much about the UK or Norwegian tax authorities, but at least with the IRS you might have just gotten lucky. They only have sufficient manpower to go after a small percentage of questionable returns, so even if you make a lot of mistakes on yours (or evades taxes), there's still a good chance you won't get audited unless you're a big fish.
- deong 11y ago
  Yes. I moved to Iceland from Tennessee, a state with no state income tax. However, I needed a permanent address where I was sure I'd get mail, because I hadn't yet found a long-term rental in Iceland, so I did my Federal tax return using my mom's address in Arkansas, where there is a state income tax. A couple of years later, Arkansas wanted to know why I didn't pay them any tax on my income from that year. I called someone, explained the situation, and he just had me write a letter. Problem solved. We're conditioned to fear the IRS because audits look horrible on fictionalized TV shows. In reality, I think you're right. The IRS is just a collection of people, and if you make an honest effort, the person on the other end isn't out to ruin you.
  - ptaipale 11y ago
    > The IRS is just a collection of people, and if you make an honest effort, the person on the other end isn't out to ruin you. Yes, they are people, but if what happens to you depends on people, the end results can be rather unpredictable.

by deong 11y ago

ptaipale 11y ago

That advice sounds to me a bit like if you go on trial for some small thing (let's say a pub brawl), and you're told "don't get a lawyer, it will make you look bad". Perhaps it is sometimes a good advice, but it can also be a spectacularly bad one.

deong 11y ago
Yeah, I was a bit leery as well, but my situation isn't that complicated, so I saved the money and did it myself. Will update from prison later if it comes to that. :)

vidarh 11y ago

It seems tax authorities can be surprisingly flexible as long as they don't get a whiff of attempted tax evasion anywhere. E.g. at some point around 2000 or so, I'd just moved to the UK, and my personal finances were total chaos around the move. I'd sold quite a lot of shares in Norway, and traded quite a bit on NASDAQ via a US brokerage account (in 2000... yes, it got ugly; thankfully not that much money), and had income from both UK and Norway split between employment and contracting in the same tax year. And transfers back and forth between my UK, US and Norwegian accounts... To make it more annoying, UK and Norway have different tax years (Norway follow calendar year, UK does not). And to be honest my record-keeping at the time was shoddy to the extreme. So I wrote a letter to UK and Norwegian tax authorities where I set out the details of my income, assets and losses as best I could. I told them I had no clue how to accurately figure out exactly what was due (for the US it was easy because it was all losses that year; the US brokerage account was just relevant because it provided deductions for losses on my Norwegian taxes). Gave them a number each that I thought was close to correct. Filled in my tax returns with estimates (and explained in my letters that the numbers were estimates). Both just accepted my estimate with no arguments, and no requests for further documentation. No fines, or angry letters, or conflicting estimated tax calculations or anything, which was what I feared when I sent it all off.

morgante 11y ago
I don't know much about the UK or Norwegian tax authorities, but at least with the IRS you might have just gotten lucky. They only have sufficient manpower to go after a small percentage of questionable returns, so even if you make a lot of mistakes on yours (or evades taxes), there's still a good chance you won't get audited unless you're a big fish.
deong 11y ago
Yes. I moved to Iceland from Tennessee, a state with no state income tax. However, I needed a permanent address where I was sure I'd get mail, because I hadn't yet found a long-term rental in Iceland, so I did my Federal tax return using my mom's address in Arkansas, where there is a state income tax. A couple of years later, Arkansas wanted to know why I didn't pay them any tax on my income from that year. I called someone, explained the situation, and he just had me write a letter. Problem solved. We're conditioned to fear the IRS because audits look horrible on fictionalized TV shows. In reality, I think you're right. The IRS is just a collection of people, and if you make an honest effort, the person on the other end isn't out to ruin you.
- ptaipale 11y ago
  > The IRS is just a collection of people, and if you make an honest effort, the person on the other end isn't out to ruin you. Yes, they are people, but if what happens to you depends on people, the end results can be rather unpredictable.