A ruling handed down by the U.S. Tax Court on May 11, 2017, indicated that the taxpayer in question could not blame their tax preparation software for improper deductions for alimony and interest. Barry Leonard Bulakites could be required to pay the IRS thousands of dollars in penalties and unpaid taxes as a result of errors he made when filing his taxes in 2011 and 2012.
In 2007, Bulakites took out a loan for $500,000 secured by his private residence to pay a judgment against himself and his employer. Unfortunately, the financial crisis of 2008 occurred soon after and created an unfavorable environment for repaying this loan. During this same time period, Bulakites and his wife divorced. Alimony was set at $2,000 per month; however, Bulakites asserted that he increased this amount to $5,000 by making an oral agreement with his ex-wife to that effect.
In 2011, Bulakites used TurboTax to file his income taxes. He attempted to claim over $185,000 in deductions for expenses. Additionally, over the two-year period encompassing 2011 and 2012, Bulakites claimed $130,000 in deductions for alimony paid to his ex-wife. The IRS argued that these deductions could not be substantiated and should be disallowed. Bulakites attempted to blame the TurboTax program, arguing that it had lured him into errors that he might not otherwise have made. The Tax Court did not agree with this argument and found for the IRS on both the penalties and the outstanding taxes owed by Bulakites, who represented himself during these proceedings.
Working with an experienced tax attorney can help you manage your issues with the IRS more effectively. The Law Offices of Daniel M. Silvershein can provide you with the expert representation needed to deal with your situation assertively and to protect your rights when dealing with the IRS. We will work with you to ensure that your deductions are supported by documentation and to provide you with the best options when dealing with tax problem. Call us today at 212-387-7880 to set up your free initial consultation with an expert tax attorney. We look forward to the opportunity to help you protect your assets and resolve your IRS issues quickly.