Comments on: Cost Segregation: The Art of Converting Long Depreciation Terms into Short Ones http://www.pappasontaxes.com/index.php/2008/09/03/cost-segregation-the-art-of-converting-long-depreciation-terms-into-short-ones/ Pappas on Taxation Thu, 09 Feb 2012 04:09:25 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Tax Primer for New Landlords http://www.pappasontaxes.com/index.php/2008/09/03/cost-segregation-the-art-of-converting-long-depreciation-terms-into-short-ones/comment-page-1/#comment-1013 Tax Primer for New Landlords Sat, 04 Apr 2009 13:04:47 +0000 http://blog.pappastax.com/?p=547#comment-1013 [...] and washers and dryers along with the rental of the premises. These items, to the extent that their cost [...] and washers and dryers along with the rental of the premises. These items, to the extent that their cost

]]> By: Peter http://www.pappasontaxes.com/index.php/2008/09/03/cost-segregation-the-art-of-converting-long-depreciation-terms-into-short-ones/comment-page-1/#comment-150 Peter Wed, 10 Sep 2008 01:42:37 +0000 http://blog.pappastax.com/?p=547#comment-150 Good points, all. But I was referring to situations in which tax practioners yield to non-practioner's cost seg studies and rely on those studies when they prepare, sign and file the return. If you're going to take the responsibility of signing the return, you ought to have more involvement (and a larger share of the cost seg study fees) than the non practioner who doesn't sign the return. Good points, all.

But I was referring to situations in which tax practioners yield to non-practioner’s cost seg studies and rely on those studies when they prepare, sign and file the return.

If you’re going to take the responsibility of signing the return, you ought to have more involvement (and a larger share of the cost seg study fees) than the non practioner who doesn’t sign the return.

]]> By: Joey Palin http://www.pappasontaxes.com/index.php/2008/09/03/cost-segregation-the-art-of-converting-long-depreciation-terms-into-short-ones/comment-page-1/#comment-145 Joey Palin Tue, 09 Sep 2008 17:18:08 +0000 http://blog.pappastax.com/?p=547#comment-145 It's the opposite problem: I can't charge as little as the non-practitioners. Also, given the volume of competition, taxpayers prefer cost segregation consultants untrained in tax law because many routine positions could not reach MLTN or substantial authority, at least not without a wink and a nod to the audit lottery. We've all seen the problem firsthand: a non-practitioner takes a position based on a superficial similarity to the facts in a revenue ruling or a case without realizing that the determinative facts are against him or her. (We see the same thing from IRS engineers, but they're not practitioners either. ) A corollary problem involves non-practitioner consultants who take positions without adequately investigating the facts based on those same superficial similarities. All of this is great for me, because, once it is contested on audit, I can go in and properly develop the facts for the disputed items, subbing out the cost segregation study if the original engineering/valuation work was deficient. But, to return to your point on penalties, what most practitioners don't realize is that there is a large body of case law regarding on whom taxpayers can rely for accuracy-related penalties. Given where things are headed, it is unlikely that a non-practitioner, even with Big 4 experience, will justify a practitioner's reliance on legal tax questions or on mixed questions of fact and law. If you, (or someone else), can deliver a cost segregation study produced under the supervision of a competent practitioner for those legal and mixed issues at a price point that works in the market, more power to you. It’s the opposite problem: I can’t charge as little as the non-practitioners. Also, given the volume of competition, taxpayers prefer cost segregation consultants untrained in tax law because many routine positions could not reach MLTN or substantial authority, at least not without a wink and a nod to the audit lottery. We’ve all seen the problem firsthand: a non-practitioner takes a position based on a superficial similarity to the facts in a revenue ruling or a case without realizing that the determinative facts are against him or her. (We see the same thing from IRS engineers, but they’re not practitioners either. ) A corollary problem involves non-practitioner consultants who take positions without adequately investigating the facts based on those same superficial similarities.

All of this is great for me, because, once it is contested on audit, I can go in and properly develop the facts for the disputed items, subbing out the cost segregation study if the original engineering/valuation work was deficient.

But, to return to your point on penalties, what most practitioners don’t realize is that there is a large body of case law regarding on whom taxpayers can rely for accuracy-related penalties. Given where things are headed, it is unlikely that a non-practitioner, even with Big 4 experience, will justify a practitioner’s reliance on legal tax questions or on mixed questions of fact and law.

If you, (or someone else), can deliver a cost segregation study produced under the supervision of a competent practitioner for those legal and mixed issues at a price point that works in the market, more power to you.

]]> By: Peter http://www.pappasontaxes.com/index.php/2008/09/03/cost-segregation-the-art-of-converting-long-depreciation-terms-into-short-ones/comment-page-1/#comment-142 Peter Tue, 09 Sep 2008 12:47:30 +0000 http://blog.pappastax.com/?p=547#comment-142 Thanks for the comment, Joey. If you have the experience and the training, why not you? Maybe you aren't charging enough. Thanks for the comment, Joey.

If you have the experience and the training, why not you?

Maybe you aren’t charging enough.

]]> By: Joey Palin http://www.pappasontaxes.com/index.php/2008/09/03/cost-segregation-the-art-of-converting-long-depreciation-terms-into-short-ones/comment-page-1/#comment-133 Joey Palin Mon, 08 Sep 2008 20:24:40 +0000 http://blog.pappastax.com/?p=547#comment-133 I'm trained in law. I also have substantial experience in cost segregation issues. But I wouldn't hold myself out as working in the area because doing it and documenting it properly is cost prohibitive. When it gets kicked on audit, let me know. I’m trained in law. I also have substantial experience in cost segregation issues. But I wouldn’t hold myself out as working in the area because doing it and documenting it properly is cost prohibitive. When it gets kicked on audit, let me know.

]]>