Taxes and Missing Documentation

DOCUMENTATION

In my last blog I talked about the
“documentation” lesson that we encounter when trying to sort out a tax
situation. So what if you are in the middle of one of these situations – what
do you do? The first step is to document all the “known” facts that should not
be in dispute. This can involve such things as who signed certain documents as
well as where the “money” flowed. Here is what I see on a regular basis. You
can sign document in your own name and then the money flows into a corporation.
The debt in this case is a personal debt. If you look at the documents it will
be clear that the names of the borrowers are the individuals. Now comes the
tough part! The individuals never actually got the money but it was disbursed
for all sorts of reasons. Maybe there is a “direction” signed to give the
disbursing agent the authority to do this and maybe there isn’t. Sometimes
there is a disbursement to settle an entirely different transaction and there
is no paperwork. Ouch. My best advice in these situations is to construct a
“fact” sheet with the events that are based on “real” documents. From there the
interpretation of events can start and hopefully limit the actual solutions to
ones that can be supported. We can help you with this process – give us a call

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