Is this normal? Expenses are deducted twice in tax form

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by a searcher from Marymount University
in Charlotte, NC, USA

1mo ago

Is this normal? Expenses are deducted twice in tax form

Is this normal? Expenses are deducted twice. Looks like tax fraud to me redacted

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101 Views

reply by a professional 1mo ago
from Liberty University in Fort Myers, Florida, United States

From the information you sent, it does look like they have deducted their expenses twice. While not common, I do see issues like this on the QoE reports we do from time to time. I saw a deal recently deduct the full inventory balance from their return each year, with no adjustment for the starting inventory balance (while they had purchases flowing through the P&L). Effectively reducing their tax burn by 90%+ each year.

reply by a professional 1mo ago
from University of Massachusetts Amherst in Hartford, CT, USA & Chicago, IL, USA

At a high level, if you can reconcile YoY retained earnings per Sch. L, Book income per Sch. M-1 agrees to your R.E. roll forward and taxable income per Sch. K agrees to Sch. M-1, then that's one way you can confirm if it's being double deducted on the return, or if the SDE calc is not right.