Tax

I prepare your tax returns with care, transparency, and integrity. I do not commit fraud, and I never cut corners. Still, I want you to understand a growing risk that affects taxpayers everywhere: dishonest tax preparers exist, and their misconduct can haunt clients for decades.

Recent court cases show a troubling reality: When a tax return contains fraudulent items inserted by a tax preparer, some courts allow the IRS to audit that return forever. The three-year statute of limitations may never start. Even worse, the IRS can apply this rule even when the taxpayer had no knowledge of the fraud and relied in good faith on a licensed professional.

In one case, the IRS audited returns that were more than 25 years old because it uncovered fraud by a tax preparer. The taxpayer did nothing wrong, but the courts still held her responsible for what appeared on her returns. In those jurisdictions, the law places full responsibility on the taxpayer to review and stand behind every number.

This reality does not mean you should distrust your advisor. It does mean you should stay engaged. You should read your return before you sign it. You should ask questions about deductions, credits, or strategies you do not understand. If something looks unusually large or too good to be true, you should press for an explanation and documentation.

I encourage this level of involvement. An informed client strengthens the process and reduces risk for everyone. Fraud thrives in secrecy and indifference. Transparency, documentation, and communication shut that door.

My goal is not to alarm you, but to empower you. Awareness remains your best protection in a system that ultimately holds taxpayers accountable for their returns.If you want to discuss the recent cases mentioned above, please call me on my direct line at 408-778-9651

• By Leon Clinton
• February 13, 2026

Many married couples form an LLC to own rental property to obtain liability protection. After they create the LLC, they often ask an important tax question: Does the LLC force them to file a partnership return? 

The answer depends largely on where they live and how they own the property.

Federal tax rules treat any unincorporated business with two owners as a partnership by default. When a husband and wife form a two-member LLC, the IRS normally requires a partnership return on Form 1065. Some exceptions exist, but most couples do not qualify for them.

Tax law allows “mere co-ownership” of real estate without creating a partnership. This rule applies only when individuals own property directly as tenants in common and simply maintain and rent it. Once spouses place the property inside a multi-member LLC, they move beyond co-ownership and create a separate tax entity. At that point, the partnership rules apply.

Spouses sometimes ask about the qualified joint venture election. That option lets qualifying couples file a single Schedule E instead of a partnership return. Unfortunately, the election does not apply when spouses operate a rental through an LLC or any other state-law entity.

Spouses who live in community property states have more flexibility. In those nine states, married couples may treat an LLC-owned rental as a single disregarded entity and file one Schedule E. The other 41 states do not offer this option.

In those 41 states, the husband-and-wife LLC result stays clear: they must file a partnership return and issue Schedule K-1s. 

Before forming an LLC, couples should weigh the liability protection against the added tax filing complexity.

If you want to discuss an LLC, please call me on my direct line at 408-778-9651

• By Leon Clinton
• February 10, 2026

For decades, taxpayers trusted a simple rule: if you mailed a tax return or payment by the deadline, the IRS treated it as timely filed. Recent U.S. Postal Service (USPS) practices have changed that reality and created a serious trap for anyone who relies on last-minute mailing.

Today, the USPS often applies postmarks at regional processing centers instead of at your local post office. Those centers may be many miles away, and reduced truck schedules can delay transport. 

As a result, a return you drop off on April 15 may receive a postmark dated April 16 or later. The IRS will then treat your filing as late, even though you acted responsibly. Being one day late can trigger penalties and interest equal to 5 percent of the tax due.

Sometimes, USPS postmark machines don’t even apply a postmark.

You also cannot rely on postage labels printed at home or at self-service kiosks. Those labels only show when you bought postage, not when the USPS accepted your mail.

You can protect yourself by taking control of the mailing process. Present your return at a post office retail counter and ask the clerk to apply a manual postmark. For stronger protection, use certified mail. Certified mail provides a postmarked receipt that serves as legal proof of mailing and delivery.

You also have legal proof by filing and paying electronically or by using an IRS-approved private delivery service. Electronic filing provides an electronic postmark and removes uncertainty.

If you plan to file by mail, choose your method carefully. A small decision can prevent an expensive and frustrating surprise. If you want to discuss your tax filings, please call me directly at 408-778-9651

• By Leon Clinton
• February 6, 2026