I wanted to bring to your attention to an Executive Order (EO) signed by the President earlier this year. Beginning Sept. 30, 2025, the federal government has been requested to stop issuing paper checks for tax refunds and other federal payments. It is also noted that as soon as feasible, all payment made to the government (which would include tax payments) should be processed electronically.

 Please review the following highlights and recommended action items:

• Filing stays the same: Taxpayers should continue to file their returns as they normally would, using one of the existing filing options.
• Refunds go digital: Most refunds will be delivered by direct deposit or other secure electronic methods.
• Confirm your bank account information to us in a secure manner. There will be help for those without access to bank accounts, such as prepaid debit cards or digital wallets.
• Consider options available for making electronic payments to the IRS to ease the transition, but until further notice, you can continue to use existing payment options.

 Let us help you.

Please contact our office today at 205-349-3580 or email info@srcocpa.com to discuss how these changes affect you. As always, planning ahead can help you maximize your financial situation and position you for greater success.

S-Corps, or “Small Business Corporations,” are a popular entity structure for tax purposes. In fact, they surged in popularity during the Covid era, partly fueled by “experts” on TikTok and YouTube. (Pro tip: Don’t rely on social media for your tax advice!)

While S-Corps can be useful in certain circumstances, the structure comes with complexities and potential pitfalls that make it a poor fit for many small business owners. Let’s walk through a few of the common problem areas:

Payroll Requirements

If you own an S-Corp, you must take a paycheck and file a W-2 for yourself. This isn’t optional. Failing to do so can result in penalties and unexpected tax bills.

Loan and Basis Complications

Borrowing money through an S-Corp isn’t straightforward. A simple loan can create “phantom income” — profits that appear on paper but doesn’t actually put cash in your pocket, and yet you still owe taxes on them.

On top of that, the IRS’s “tax basis” rules — essentially tracking how much you’ve invested in the company — are notoriously complicated. Even small errors in basis calculations can trigger expensive consequences.

Why I Prefer LLCs for Many Clients

Because of these traps, S-Corps often require a high level of diligence and compliance that most small businesses find burdensome. That’s why I often recommend LLCs instead.

LLCs are supported by strong, flexible state laws (including here in Alabama) and are much more forgiving of honest mistakes. They also provide unmatched flexibility in tax planning: an LLC can be taxed as a sole proprietorship, a partnership, or even as a corporation, depending on what best fits the owner’s goals.

This flexibility, combined with simpler compliance, often makes LLCs a safer and smarter choice for long-term planning.

Effective tax planning can create meaningful benefits for businesses of all sizes.

You don’t need to be a multi-million-dollar operation to take advantage of smart tax strategies. In fact, smaller, closely held businesses often see significant gains simply by improving bookkeeping, restructuring entities, or implementing thoughtful long-term planning.

• Good tax planning allows us to predict a tax return’s outcome before preparation.
• It gives us some control over how much tax is due.
• It addresses short-term needs, like reducing tax bills.
• It covers intermediate goals, such as exploring capital gains treatment on business sales.
• It looks ahead to long-term strategies, including:
  • Transferring the business to the next generation, or
  • Selling the business outright.

Financial Planning

• We provide advice only—we do not sell financial products, ensuring no conflicts of interest from commissions or kickbacks.
• Our goal is to understand and support your financial objectives.
• Our expertise includes:
  • Retirement planning
  • Personal wealth management (ensuring you don’t outlive your resources)
  • Family wealth management (giving your children a financial boost)
  • Multigenerational wealth management

Multigenerational Wealth Management

• As a relatively new area for our firm, we’ve invested in legal expertise and established relationships with major financial firms. We’re actively learning the intricacies of this domain, and the insights have been valuable.

Specifics

Entity Formation and Growth
When a new business is formed, making sound decisions upfront is important. Historically, this was uncommon, but recently, our expertise in long-term tax planning has gained traction, leading to our involvement in mergers and acquisitions — a sector we thoroughly enjoy.

In the last decade, we have honed a method for carving out goodwill tied to intellectual property (IP). At the time of entity formation, it’s simple:

• Form an operating LLC to handle customers, revenue, and expenses.
• Form a separate property LLC to hold assets and IP rights.

There are no downsides to having multiple entities to operate one business. In fact, it provides liability protection, improves insurability, and eases transferability. In certain cases, more LLCs may be required to manage family or multigenerational wealth.

Managing Multiple Entities
For example, in the transportation business, a property LLC would typically own trucks, trailers, and equipment, which the operating LLC would lease. The same principle applies to intellectual property, where the operating LLC would pay royalties to the property LLC, establishing a valuable property right.

Growth Phase Structuring
Recently, a client in a similar industry sought our advice regarding a multi-location operation. With the profitability they’ve maintained, we helped them project tax savings of $8 to $10 million over the next five years.

In another similar case, we expect to save a multi-partner client in Georgia $5 to $8 million in taxes over five years. Both cases involve expansion plans designed for high tax leverage.

Extracting Wealth from Mature Businesses

Not all tax planning starts at the expansion stage. For established businesses, restructuring can still unlock significant value. Most new businesses aren’t structured ideally from the start. Carving out intellectual property later allows us to unlock the tax savings I mentioned. Recently, we have done this for a mature business in the transportation sector with excellent results.

While the examples above involve businesses with significant profitability, you don’t need to be a multi-million-dollar operation to benefit from smart tax planning. In fact, many of the most impactful strategies—like entity structuring, IP separation, and long-term planning—are scalable and beneficial even for businesses with more modest revenues. The key is profitability, consistency, and clean financial records.

Factors for Success
To achieve these outcomes, several key factors are essential:

• Taxpayer Integrity: This may seem obvious, but integrity is critical to long-term success.
• Business Profitability: Profits must be substantial and predictable—tax planning only works if you’re paying taxes.
• Quality of Books and Records: Your internal bookkeeping must be clean and understandable, with both management and outside parties, such as CPAs and the IRS, having confidence in your records.
• Communication: Clear, consistent communication is the foundation of effective tax planning.

Long-Term Tax Planning

A good tax plan is rarely short-term. Typically, it takes 3 to 5 years, or even up to a decade, to develop a solid plan. Quick fixes—such as buying assets to claim depreciation—are often just temporary deferrals that can cause issues as the deferrals expire.

Our Approach to Tax Planning

Our firm has earned a reputation for solid, long-term tax and financial planning. We work with clients across 35 states and 25 foreign countries, staying connected through email, phone, and MS Teams.

What’s changed, what hasn’t, and
what it means for your 2026–2027 tax planning.

The Big Beautiful Bill (OBBB) updated the charitable giving rules—but not in sweeping ways. Whether you give a little or give six figures, there’s something here for you. Below is a quick-scan guide by income level, with special notes on Donor-Advised Funds (DAFs) and Qualified Charitable Distributions (QCDs).

1. Non-Itemizers

Starting in 2026, you can take a new above-the-line deduction for cash gifts to public charities—even if you don’t itemize:

• $1,000 for single filers
• $2,000 for married filing jointly

Doesn’t qualify: Gifts to Donor Advised Funds (DAFs), private foundations, or non-cash contributions. These limits are fixed and not indexed for inflation.

I will discuss Donor Advised Funds more in this newsletter.

Bottom line: Keep giving—now you can also shave up to $2,000 off taxable income.

2. Moderate-Income Itemizers (AGI under $250,000)

AGI (Adjusted Gross Income) is the IRS’s version of income. It’s used for taxes, student aid, insurance, loans, and more—but it’s not always a full or accurate picture of your finances. The AGI acronym pops up everywhere.

Under OBBB, a new “floor” applies: the first 0.5% of your AGI in charitable giving gets ignored. Example: With $200,000 AGI, the first $1,000 of donations gets no deduction.

• Cash gifts still deductible up to 60% of AGI
• Appreciated assets deductible up to 30%

Strategy tip: If the floor or standard deduction wipes out your deduction, consider bunching two years of giving into one.

3. Upper-Middle Itemizers (AGI $250,000–$750,000)

Same 0.5% AGI floor, just higher dollar impact. A $500,000 AGI household loses the first $2,500 of charitable deductions.

• 60%/30% caps still apply
• Phaseouts start to creep in
• Timing large gifts around stock sales or business income can help recover lost deductions

4. High-Income Donors (AGI over $750,000)

The rules get sharper as income climbs:

• 0.5% floor still applies (AGI $1.2M → $6,000 ignored)
• Cash and appreciated asset caps unchanged (60%/30%)
• New wrinkle: deductions capped at 35% tax savings, even if you’re in the 37% bracket

A $100,000 gift saves $35,000 in tax, not $37,000.

Strategy tip: Accelerate large gifts into 2025 to lock in the full 37% benefit.

🏛 Donor-Advised Funds (DAFs): Still Useful—With Limits

Many clients use a DAF at the National Christian Foundation or similar. The core benefits haven’t changed:

• Immediate deduction
• Flexible grant timing
• Easy record-keeping

What’s new under OBBB:

• Above-the-line deduction doesn’t apply to DAF gifts
• If you contribute to a DAF, you’re excluded from the $1,000/$2,000 deduction
• Treasury has been instructed to propose new rules for large DAFs and big contributions (expected in 2026)

Takeaways:

• Moderate donors can still use DAFs to bunch gifts into one year and spread grants out
• Higher earners should time DAF contributions to high-income years
• Stay flexible—we’ll revisit this as new rules emerge

🏆 Qualified Charitable Distributions (QCDs): Still the MVP

QCDs remain untouched—and still excellent:

• Available at age 70½+
• Annual limit: $105,000 in 2024 → $108,000 in 2025 (indexed going forward)
• Counts toward your RMD, and bypasses AGI completely

Also available: a one-time QCD (up to $54,000 in 2025) into a charitable remainder trust or charitable gift annuity

QCDs are still unbeatable for retirees who don’t itemize or who want to keep AGI low to avoid Medicare surcharges and Social Security taxation.

The Big Picture

The tools you know—DAFs, QCDs, direct giving—are still here. But timing now matters more. The AGI floor, the 35% deduction cap, and upcoming DAF regulations all call for smarter planning.

Let’s map out your 2025–2026 giving plan before December 31.

—
Steve Richardson, CPA
stever@srcocpa.com

General information only. Not personalized tax advice. Let’s talk before acting.

A Hard Lesson
Two days of my life were spent helping with the defense of a former client we dismissed nearly a decade ago. Why we dismissed him will become obvious. Ten years later, he found himself in Tax Court facing federal tax fraud charges.
________________________________________
The Future of Tax Audits
There is a mistaken belief that President Trump is severely limiting the IRS’s ability to conduct tax audits. That’s not true. His administration is changing the future of tax audits to be more AI-driven.
More audits will be done by “remote control”—and that’s a scary thought. The IRS will be able to conduct more audits, better audits, at a much lower cost to the government.
There will be more audits in the future. We are already seeing some of these “remote-controlled” audits. So far, they are primitive to the point of being amusing, but they will improve quickly.
AI is now a fact of life for the IRS—and therefore for taxpayers.
Your defense, now and always, is the quality of your books and records.
The Facts
A routine IRS audit turned into allegations that the taxpayer had deliberately understated income over several years, triggering a criminal investigation. When it became clear the IRS was building a fraud case, we had no ethical choice but to withdraw as his CPA firm.
The criminal charges were eventually withdrawn—criminal charges are hard to prove—but the civil fraud charge remained. The unreported income, close to $1 million over multiple years, is not in dispute.
I can’t tell you how the Court will rule. To win, the IRS must prove intent—a high bar. The taxpayer might prevail on that point.
But what does “winning” really mean?
________________________________________
The Problem
The taxpayer’s books were pristine, but they hid substantial understatements of income for multiple years.
The core issue before the Court is this:
• Was the understatement of income intentional or accidental?
Or, put another way:
• Was the bookkeeping done with criminal or fraudulent intent, or was it simply lousy bookkeeping?
What bothers me most is the phrase “the taxpayer’s books were pristine.” Keeping “pristine” books while hiding income takes talent—and that’s not a compliment.
________________________________________
A Very Important Message!
Your books and records are critical in any matter before the IRS. They will either testify for you—or testify against you.
________________________________________
What Does “Winning” Really Mean?
Underreporting income is never worth it. The IRS doesn’t forget, and the bill grows while you wait.
Consider for example: $900,000 in unreported income amounting to $315,000 in tax grows to a bill of over $850,000 with penalties and interest—more than double the original tax. That’s not counting legal and CPA fees or the stress of living under a cloud for years. Legal fees alone will likely top $2 million.
And it’s not just about money. A fraud ruling reopens the statute of limitations, letting the IRS dig deeper and even revisit criminal charges. This can drag on for another decade, piling on more costs—and the risk of jail time.
Tax fraud simply isn’t worth it.
________________________________________
Why We Withdrew
When it became clear the IRS was developing a criminal fraud case, we withdrew to protect the client’s legal rights. He needed a criminal tax lawyer. That lawyer, in turn, needed to hire a different CPA firm to handle the audit.
We encouraged him to find a CPA firm to support a criminal tax defense. In this situation, that was not us.
We are often hired by attorneys to assist with criminal tax cases and are qualified to do so. But we could not serve in that role here.
If we believe a client is dishonest, we will withdraw. But the main reason we withdrew was to protect the client’s legal rights.
________________________________________
Legal Rights
When tax crimes are alleged, you need a lawyer more than a CPA. Attorneys can offer privileged communications; CPAs generally cannot during ordinary tax work.
However, if your lawyer hires us, our communications may become privileged because we work for the attorney, not directly for you. This legal right is essential.
We withdrew to protect that right. As his day-to-day CPA firm, we could not offer privilege. He needed a CPA hired by his attorney—and he got a good one.
Without that privilege, anything we learned could have been shared with the IRS.
________________________________________
Even When Lied To, We Protect Rights
Speaking generally, even if a client has lied to us—even if we are frustrated or angry—we still have an ethical obligation to protect that client’s legal rights. Our standards require us to act with integrity, objectivity, and respect for the law, even when clients fail to do so.
If a situation escalates into potential criminal tax charges, stepping aside allows the client to secure adequate legal counsel and privileged protection. Protecting legal rights isn’t about shielding wrongdoing; it’s about upholding our ethical duties while ensuring due process.
________________________________________
What is CID?
The IRS’s Criminal Investigation Division (CID) is its law enforcement branch. They carry badges—and guns.
________________________________________
Poor Records Are Your Worst Enemy
In an audit, poor records can cost you money. In a criminal investigation, they can cost you your freedom.
________________________________________
Why This Matters
You may think, “That could never happen to me.” I agree—most of our clients are honest and diligent. But the IRS doesn’t know you like I do. Poor records, ignored notices, or unreported income will make the IRS assume the worst. Good compliance protects you, your family, and your business.
________________________________________
Books and Records Matter!
Your best defense in any IRS interaction is high-quality books and records. In tax law, you must be able to prove that your reported income is accurate and your deductions are appropriate.
“Prove” is a high standard—and it’s on you, the taxpayer.
In a tax audit, it’s not inaccurate to say, “You are guilty until you prove your innocence.”
Only your books and records can prove your income and deductions.
________________________________________
How to Avoid This
Most IRS problems start as routine audits triggered by poor books and records. They escalate when notices are ignored, records are missing, or taxpayers try to “explain away” omissions.
Your best protection:
• Keep accurate records.
• Report income correctly.
• Respond to IRS notices promptly.
First rule: Never talk to the IRS without talking to me first.
If a situation calls for a tax attorney, I will refer you quickly.
________________________________________
What to Do if the IRS Knocks
If you receive an IRS letter, don’t panic—and don’t ignore it. Do not respond without talking to us first, and do not delay.
We will review your records, explain your rights, and help you respond appropriately. Minor issues can often be resolved quickly. If the IRS hints at criminal charges, we will bring in a qualified tax attorney to protect your rights.
________________________________________
We Are Here to Help
Our job is to keep you out of Tax Court. Good records, timely filings, and honest conversations give you peace of mind and protection if the IRS comes knocking.
Let’s keep it that way.
________________________________________
Closing
We work hard to keep you out of Tax Court. The best strategy:
• Maintain good records.
• Report your income accurately.
• Address tax issues early.
It’s July—now is the time to schedule your year-end planning. We can review your records, adjust your estimates, and position you well for year-end.
Good records, timely payments, and a clear plan protect you, your family, and your business.
That’s our job—and we’re here for it.
Call or email us this month to schedule your year-end planning appointment.

Steve Richardson, CPA
stever@srcocpa.com

Newsletter from
Steve Richardson & Company, Certified Public Accountants

May 29, 2025

The “Dirty Dozen”

Client Newsletter – May 2025
The IRS’s “Dirty Dozen” List of Tax Scams – My Take

To Our Clients and Friends:

Every spring, the IRS releases its “Dirty Dozen” list—a lineup of the year’s most common tax scams. Some are new. Most are just the same old con games with a fresh coat of paint.

These scams are fueled by social media nonsense, shady promoters, and straight-up crooks. Some want your refund. Some want your identity. A few want both.

Knowing what’s out there is your best defense. What follows is a rundown of what the IRS is seeing—and what I’m seeing. I’ve added my own commentary and plain-language advice (as you’ve come to expect).

Let me get this out of the way:
The IRS will rarely—if ever—call you.
If someone claiming to be from the IRS calls your cell, your landline, or your cousin’s cousin’s number… hang up and call me.

1. Phishing & Smishing – Don’t Take the Bait

If you get an email or text from the IRS, it’s fake. Period. The IRS doesn’t contact taxpayers that way. Ever.
Delete the message. Don’t click anything. Don’t reply. Forward it to phishing@irs.gov (email) or 7726 (SPAM) (text), then delete it.

2. Tax Tips on Facebook or TikTok – Please Stop

Videos with dancing cats are fine for entertainment—not for tax advice.
The IRS is getting swamped with bogus refund claims pushed by TikTok and other social media. If it sounds too good to be true—it is. Especially online.

3. Fake “Help” Setting Up an IRS Account

Scammers offer to “help” you create your IRS online account, then use your info to file a fraudulent return and steal your refund.
Set up your own account at irs.gov. It’s easy. If you need help, we’ll walk you through it.

4. Fake Charities – Tug at the Heart, Steal from the Wallet

After disasters, scammers pop up posing as charities. They want your money—and your personal data.
Before you give, verify. Use the IRS site, Charity Navigator, GuideStar, or just call us. We’re happy to help you check.

5. Fuel Tax Credit – For Tractors and Bulldozers, Not You

This credit is for off-road fuel use—think farmers and construction equipment.
It’s not for regular folks. We’ve seen it abused, and yes—it gets flagged in audits.

6. Family Leave & Sick Leave Credits – Expired in 2021

These credits were for self-employed folks during the pandemic. They don’t apply to W-2 employees, and they don’t apply anymore.
If someone tells you otherwise, they’re either confused or dishonest. Call us.

7. The “Self-Employment Tax Credit” – Doesn’t Exist

This one is pure fiction. If someone promises you a $32,000 refund because you’re self-employed or a gig worker, walk away.
It’s a made-up credit, often based on a twisted version of the expired COVID credits.

8. Fake Household Employees – Don’t Get Cute

Some taxpayers are inventing “household employees” to claim refundable credits.
Let me be clear: this is fraud. Don’t do it. Not worth the risk.

9. Overstated Withholding – Make-Believe W-2s

This one involves making up big income and withholding on fake W-2s to get a refund.
The IRS is watching this one closely. If they can’t verify your info, your refund is frozen and you’re in hot water.

10. Ghost Preparers – If They Won’t Sign, You Shouldn’t Either

If your preparer won’t sign your return or won’t give you their PTIN, run.
Also, if they charge based on the size of your refund, that’s a red flag. You’re legally on the hook for what’s filed—choose wisely.

11. Offer in Compromise Mills – Selling False Hope

Yes, you can settle with the IRS. But real Offers in Compromise are for people in serious financial distress—not everyone.
Some companies charge thousands to “help” when you don’t even qualify. Use the IRS’s free tool first—or call us before you call them.

12. Bottom Line – If It Feels Wrong, Call Me

You’re responsible for what’s on your tax return. If you follow bad advice—even in good faith—you could still be on the hook.
When in doubt, don’t click, don’t call back, and don’t reply. Call me instead.

IRS scams are a billion-dollar industry. But with a little caution and a healthy dose of skepticism, you can stay out of their sights.

We’re here to help you stay safe, compliant, and out of trouble.

Sincerely,
Steve Richardson
Certified Public Accountant
stever@srcocpa.com

Newsletter from
Steve Richardson & Company, Certified Public Accountants

May 5, 2025

US Priority Mail is no guarantee!
Checks to the IRS and for State Taxes are a BAD idea!

To Our Clients and Friends:

A client just told me—literally five minutes ago—that Virginia lost his tax payment. He mailed his check to the Virginia Department of Taxation using Priority Mail, following my instructions because it’s a trackable method. We know the check was delivered. But Virginia simply lost it.

Unfortunately, this is not unusual.

A few months ago, during a seminar, my colleague Amy and I heard a representative from the IRS say something startling:

“If you mail us a paper check, and it actually arrives (which is doubtful), there’s still an 85% chance it will be either miscoded or lost.”

That statement stuck with us—and now, this incident with Virginia confirms it again.

Please hear this clearly:
Do not mail checks to tax authorities—ever.

Instead, always use a secure online portal to pay your taxes. These systems are faster, safer, and provide instant confirmation.

Here are the official sites for a few key tax authorities:

• IRS:                 www.irs.gov
• Alabama:    myalabamataxes.alabama.gov
• Virginia:      individual.tax.virginia.gov

Every state has a similar online system that allows you to pay taxes and manage your account securely. If you need help accessing yours, let us know—we’re happy to walk you through it.

Newsletter from
Steve Richardson & Company, Certified Public Accountants

July 1, 2024

Investing in Farmland

To Our Clients and Friends:

Recently, one of our clients made a significant investment by purchasing a substantial tract of farmland. Just yesterday, I had the pleasure of touring half of this expansive property by ATV—it was quite an adventure! This vast piece of land is truly impressive, and our client, along with his family, has every reason to be proud of such a notable acquisition.

Many of our clients are farmland owners. Additionally, some of the nation’s wealthiest individuals, such as Bill Gates and Jeff Bezos, along with various investment funds, have also chosen to invest in farmland. While this can be a wise choice for some, it’s essential to remember that farmland ownership isn’t suitable for everyone. The carrying costs, including property taxes, maintenance, insurance, and potential mortgage and interest payments, must be carefully considered. Especially if borrowing is required for the purchase, which might not be advisable for most.

Farmland can be an excellent component of a multigenerational wealth management plan, but any decision to purchase must be part of a well-thought-out investment strategy. From my perspective, reducing and eliminating debt should be a cornerstone of any investment plan.

A comprehensive investment strategy typically includes retirement funds, mutual funds, brokerage accounts, and both residential and commercial real estate. The way these assets are invested and their ownership structure—such as family LLCs or trusts—play crucial roles in a long-term strategy. If your plan aims for multigenerational wealth, farmland can be a valuable addition.

Here are a few reasons why farmland attracts competent and successful investors:

• Inflation Hedge: Farmland is generally a good hedge against inflation.
• Limited Downside Risk: The downside risk of farmland is relatively limited.
• Carrying Cost Reduction: There are multiple ways to reduce the carrying costs of farmland through leases and farm production.

One crucial recommendation I made to my client was to hire a professional farm manager. This turned out to be extremely beneficial. The farm manager recommended several government reforestation and timber programs, as well as comprehensive land management plans. He also arranged for substantial farm rental income, significantly offsetting the carrying costs.

Additionally, the farm boasts nine recreational fish ponds. While not currently suitable for fish farming or aquaculture, these ponds enhance the property’s value. The ponds, along with the entire property, are extremely well maintained, adding to the overall appeal and worth of the land.

The farm is also teeming with wildlife, including turkey, deer, dove, and all sorts of wild game native to Alabama. While this wildlife cannot be commercially exploited, it certainly adds a fun aspect for family and friends to enjoy. It’s important to remember that having fun with your farm does not make your farm a hobby.

If you have a farm property, use it! Many of my clients retreat to their farms for periods of rest, reflection, and recreation.

Due to these farm rentals, there is a possibility that the farm may show a profit in the year of acquisition. In subsequent years, it is almost certain that the farm will show a profit based on timber and farm rentals.

It’s important to note that the IRS is very suspicious of farm losses, especially for high-income individuals, as these often trigger tax audits. However, there are simple steps you can take to minimize the risk of a tax audit related to farm operations:

• Show a Farm Profit in 3 of 5 Years: Demonstrating a profit in three out of five years can help avoid IRS scrutiny.
• Maintain Business-Like Books and Records: Keep comprehensive and accurate records of all income and expenses related to the farm.
• Develop a Business Plan: Have a clear business plan that shows how you intend to make a profit from the farm operations.

With proper tax planning, individuals can optimize both income and capital gains tax outcomes. Tax planning for farmland is unique to each investor’s situation. Typically, incomes or losses from farmland investments are considered “passive,” and understanding the specific tax considerations for passive income or losses is crucial in farmland tax planning.

As always, if you have any questions about incorporating farmland into your investment strategy or need assistance with tax planning, feel free to reach out.

Steve Richardson

Certified Public Accountant
Steve Richardson & Company

Newsletter from
Steve Richardson & Company, Certified Public Accountants

June 6, 2024

Urgent! I do not like that word at all.

To Our Clients and Friends:

“Urgent” is a word that I rarely use, but in this situation, it is merited.

In the recent past, I have written newsletters about the problems and issues with the US Mail and the theft of checks being sent through the mail. This problem is reaching epidemic proportions. One of the biggest and fastest growing issues in the US banking system is check fraud and theft.

Our clients have experienced check theft firsthand. Yesterday, Todd showed me a large estimated tax check that was taken out of an envelope addressed to the IRS and cashed by a fictional person. A few months ago, a client sent in a church tithe check by US Mail for $40,000 that was stolen. The church’s name was washed off; the check was cashed by a criminal. Fortunately, the church had a hidden camera that proved helpful in recovery and prosecution.

But they wash off the name!

Current chemical technology allows a check thief to wash off the name to whom the check was written and write in any name they choose. The technology is so good that it does not fade the ink on the check itself, only the ballpoint pen.

These are not isolated incidents.

Our clients have had hundreds of thousands of dollars of checks stolen. So far, the banks are making these stolen checks good. The largest bank expense in recent years is the cost of stolen checks. This is a very big deal.

What Should You Do?

Never send money to any tax authority by US Mail. This is the most common target of check thieves. Almost every tax authority has an electronic method that will allow you to make secure tax payments online. When we do tax returns, we have the option on the federal tax return to pay any federal taxes due by allowing the IRS to direct draft your bank account. It is safe and secure. It may sound a little scary, and it took a while for the IRS to win me over. Additionally, the IRS has an excellent method that will allow you to make estimated tax payments in the same way.

Most states have similar capabilities. Not all states allow estimated tax payments as part of the tax return processing, but all the states that I am familiar with have a method of allowing online tax payments. Alabama, for example, has their own tax site, www.myalabamataxes.alabama.gov. It’s not a bad site. It could be better, but it is safe!

It’s Not Just Taxes

When and where possible, instead of sending checks, use available electronic payment methods. There are many such methods, some customized for personal transactions, others for business transactions. Interestingly, the legendary accountant’s “paper trail” is better with electronic payments than with traditional checks.

Do Not Use the US Mail Unless You Have No Choice

Three years ago, I received a package of tax data by US Mail that took two years to arrive. It aggravated both me and my client. That was three years ago. In 2024, late arriving or lost packages in the US Mail are a daily occurrence. By late arriving, I mean months or years late. Do not use US Mail unless you have no choice. There are certain IRS addresses that have only PO Boxes. With PO Boxes, you have no choice but to use US Mail. If you have a choice, don’t.

The Need to Send Documents is Rapidly Diminishing

Most of our client documents arrive by electronic means. Our firm has multiple secure portals that will allow you to upload documents. Converting your documents to PDF format will allow you to email these documents to us. There are many ways to send documents without using US Mail or using no common carrier at all such as Zip.files.

There Are Reliable Common Carriers When You Must Send Documents

UPS and FedEx are well-known common carriers that do a good job of making on-time deliveries. They are not alone.

Thank you for your attention to this important matter. Please feel free to reach out if you have any questions or need assistance with setting up electronic payments.

Sincerely,

Steve Richardson

Certified Public Accountant

Newsletter from

Steve Richardson & Company

Certified Public Accountants

June 16, 2023

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