Most folks view the IRS as a cross between Darth Vader and a Vampire. The reality is that most IRS agents are regular people trying to do their job (sure, there are some exceptions, but haven’t you ever had a waitress bite your head off ‘cause you wanted your coffee warmed up one more time!). Still, most taxpayers are far too lax in how they prepare for a possible future audit. And far too many employees and business owners are far too lax in how they prepare for payroll tax audits. So, how does RVing provide good lessons in preparedness for tax issues? Read on.
Some people have checklists for their checklists, just to keep track of their checklists before an RV trip. Yeah, I’ve prepared some checklists for my first trip, but I’ve also seen checklists that had more columns and details that even I, as an obsessive compulsive accountant, could imagine! I had seen so many checklists for my first RV trip, I finally created the checklist attached below. But is that degree of precision the best way to prepare to address tax issues? I suspect not.
Some RVers map out their day and plan what town (and sometimes even what station) they will stop in to get gas. We don't make those plans. Instead, when our gas gauge shows about half full, we just stop and fill it. This way, there's no need to worry if that particular station is open, or if it is further than our calculations, or whatever else could go wrong. Can you imagine traveling with someone that has to plan to the intricacies of gas stops? That Felix Unger does RV’ing!
Now, how many people do you know that use a checklist to prepare their tax records during the course of the year? Most CPAs will send you a checklist to prepare the information they need to do your tax return. They’re usually really long and equally un-exciting documents, on which you are to fill in all the income and expense data, and answer more questions than are required for a life insurance application. For the record, which my accountant can confirm, I carefully file the organizer I get in the mail in the circular file. Am I imprudent? No, but I’ve used the same approach to prepare for tax filing and the seemingly inevitable tax audit, that long time RV’ers use with their checklists.
Being prepared is not just for Boy Scouts. Being responsible is at the heart of safe and fun RV’ing. Many RV’ers don't focus a lot on preparing, because they live prepared. Case in point, you may not have checklists of what to put in the RV before you leave. Instead, you may just keep your RV stocked with clothing, kitchen and bath things, non-perishable foods, some jugs of water, tools, pet supplies, office stuff, fishing equipment, etc. When it isn't freezing out, you may keep the fresh water tank full of water. When you decide you are going to take the trailer somewhere, you just grab your laptop, dog, and hit the road. This is the recipe for minimizing or even avoiding taxes, tax audits, and many other issues. You don’t need to conduct or plan your life to the point of it being painful (like the checklists of gas stops would be for everyone other than Felix Unger), but you should live tax prepared. Here are some simple examples:
You’ve heard the ads for Hair Club for Men. Almost as much a piece of Americana is an Airstream Trailer! Sy Sperling says: "I'm not just the president, I'm also a client®". Well, me too (tax issues, not hair loss). I seem to get audited by some tax authority pretty much every year (they like me, I guess!). So, the steps above: Outlook calendar with business appointment details, specifics of each transaction in Quicken (I use QuickBooks for the business – it does more and keeps the business and personal stuff separate) and other tips we’ll address in future articles, all help minimize the burden of responding, and greatly increase the success in dealing with audits. I’m not just the author, I’m the guy getting nailed with the audits too!
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