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Comment by GalenErso | Hacker News Reader

> I have CPA's and lawyers

How complex are your taxes that you need more than one CPA and lawyers to do them?

There are a couple edge cases where CPAs are poorly equipped. ISOs are one of them. Out of state ISOs even more so.

I moved out of CA and had to pay taxes on my ISOs. Financially it was a good move as the market soured after I sold them. Even after paying taxes to two states, I came out ahead. However, my life was misery just trying to do the right thing.

It took three CPAs. One quit after he was sufficiently intimidated after calling the FTB for instructions, one just gave up, and the third told me correct enough instructions that I paid and filed. I apparently still did something wrong per California and had to write them another check. I have no idea if I overpaid or not. It’s simply not worth the fight but if I did think it was, in come the lawyers.

I just want to get to a point where I am not living with monthly taxation discussions so I’m ok with being done with it, whatever overpayment I may have made.

What's an ISO?

From context, I assume Incentive Stock Options

Yes, that’s correct.

Probably in this case "Incentive Stock Options"

I'm going to over-simplify the answer a bit, but without going into details the CPA's have to keep up to date on ever changing finance laws, deduction rule changes, etc... and much of the discovery process is on me. While this does not really change YoY the institutions I deal with also make mistakes, sometimes because of mergers and acquisitions and so I end up missing documents that somehow the IRS knows about but the institutions neglect to provide. The lawyers don't do my taxes so to speak but they review the work of the CPA and are supposed to help catch mistakes, but that is also not guaranteed for the institutional reasons I mentioned. It's more complicated than this but if I didn't need those people I certainly would not be paying for their services.

This is why I would love to see the IRS just show me what they think I owe and if I see any red flags I should be able to click a line item and dispute it, otherwise just click a button, do a wire transfer and be done with it. IRS gets their money and I get my time back for more important things like commenting on HN.

Someone might suggest that the lawyers should go after both the IRS and the institutions for their mistakes and the lawyers would totally agree with big dollar signs in their eyes. They've tried to egg me on in the past.

On the contrary, the IRS's interpretation of your income is going to be very uncharitable. My tax liability last year has 6 figures of variability depending on who you ask, and I assume the button-clicking machine will decide on the high end. That's what their automated letter-writing machine does too, and it's very annoying to get letters from it.

The last one I got claimed I owed $10,000 and I had to write a very nice letter back explaining that they actually owed me $45. I got my check 6 months later.

If your return is complicated enough that you need CPAs and lawyers to handle it, the IRS won't be able to give you a ready return of what it thinks you owe because it doesn't have access to all of the information it would need to do that.

I end up missing documents that somehow the IRS knows about but the institutions neglect to provide.

The IRS knows about these because your counterparties to these transactions filed their own documents, and you were reported in these documents in some fashion. If you are failing to file those documents, that is absolutely a failure of your tax advisors to properly handle your compliance, and you should absolutely demand they make you whole for penalties and interest owed on these failures, and sue them for malpractice if they do not. (99% of the time they will just pay you without needing a lawyer to get involved, though this might come in the form of a credit against current/future services if you are still a client.)

It CPAs are external they may not even be aware of said documentation.

That would literally be malpractice.

If the CPA is aware of the transaction, then they are aware that the documentation by the counterparties exists (or should exist), and of their client's legal responsibility to file similar documentation.

If they are not competent to handle the compliance associated with an M&A transaction, then they have no business providing accounting services to a client that engages in M&A transactions regularly.

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