Spidell's Tax Season Tribune

You’re on hold with the IRS. What will you do with your time?

Mike Giangrande, J.D., LL.M.

Federal Tax Editor

There’s about a month of tax season left, so when you end up on hold with the IRS, there’s no time for idly staring into space while you wait hours for them to get on the line. Instead:

Drink a 32oz coffee.
Try to run to the bathroom and back before the IRS picks up.
Watch the voicemails pile up while the phone is in use.
Wonder if I should have just used the call-back feature instead of waiting on hold, then remember that I don't have a direct-dial line in my office, so when the IRS calls back, I have to hear my secretary run down the hall asking who called the IRS before the agent gets tired of waiting and hangs up.
Dream of killing the person who came up with the IRS’s hold music that hasn’t changed in my entire 23-year career.
Rethink my life choices as I try to figure out how to bill my client for this colossal waste of my time (see “Sample client letter: Why your bill just went up 1000%” in the February 27 issue).
Try to get other work done.
Pray that the IRS picks up and will be able to handle my issue before my next client appointment — three hours from now.
Secretly binge-watch Breaking Bad, season 3… again.
Write Spidell’s entire fall update manual.

Do you have this essential wardrobe piece?

Nope, not the green visor, the sleeve garter.

Garters worn on the sleeve of a shirt came into wide use, especially in the U.S., in the second half of the 19th century. Men’s ready-made shirts came in a single extra-long sleeve length, so the garter allowed individuals to customize sleeve lengths and keep their cuffs from becoming soiled while working or at the correct length when worn under a jacket.¹

Among the professions using garters to keep their sleeves out of their work were accountants and bookkeepers, whose sleeves otherwise could become soiled with ink.

Gotta know when to fold ’em

Kathryn Zdan, EA

Editorial Director

A taxpayer who won $850,000 in the California Mega Jackpot in 2015 claimed $750,000 in gambling losses, $450,000 of which were incurred playing casino games (slots, poker, blackjack, and roulette).¹ The FTB whittled the losses down to a little over $300,000, and the taxpayer took the case in front of the Office of Tax Appeals (OTA), hoping to increase the allowed loss amount.

But the taxpayer didn’t have contemporaneous records. He argued that he was “new to gambling” and didn’t know about the recordkeeping requirements, and that he had used a system of keeping money in a safe deposit box which he used for gambling, hence there were no receipts. He said he had been keeping a gambling diary, but had lost it.

The statements from the casino reported only $18,814 in losses. However, the FTB did allow a loss of $316,665: They accepted $193,695 of cash and check withdrawals for the casino gambling, and accepted gambling losses from scratch-offs, lottery ticket purchases, and horse betting.

The OTA declined to use the Cohan rule² to estimate further losses.

¹ Appeal of Raien and Taverdyan, 2022-OTA-037
² Cohan v. Comm. (1930) 39 F.2d 540

A few fun facts about this week’s writers:

Kathryn Zdan, EA, spends her non-Spidell hours on photography and watching horror films (and then sleeping with the light on). She also enjoys hiking, biking, and watching foreign films.

Mike Giangrande, J.D., LL.M., is an Orange County native, and you can find him around his backyard smoker, working in his garage, or sipping lemonade at either a baseball or soccer game for this three children.