Toph Sheldon CPA for the Self-Employed ® - December 2019

A Client Success Story

A Major Tax Problem Turns Into a Major Refund

So, You Want to Launch a Podcast?

In a previous edition of Toph’s Tax Resolution Times, we published the following story (our update to this case is at the bottom of this article):

The client’s name and some of the details in this story have been changed to protect the identity of those involved. However, the tax results noted are 100% factual.

How to Get Quality for Less Than $200 Podcasting, once a niche medium, is now a towering feature of the audio media landscape. In 2019, a survey by Edison Research and Triton Digital estimated that over 30% of Americans tune in to podcasts each month, and that number is expected to grow. It’s no wonder business owners, hobbyists, storytellers, comedians, politicians, and even Dungeons & Dragons players have found their audience through podcasting. No matter your interest, if you want to break into this industry, you’ll need the right gear. Microphones Nothing will sink a podcast faster than poor audio quality. It doesn’t matter how great your content is — if your audience can’t hear it clearly, they’ll tune out. That’s why even low-budget podcasters should consider dropping a little extra cash for a good mic. A great starting option is the Rode PodMic. With an internal pop filter and built-in shock mount, this mic does a lot to clean up your audio on the front end. At $99, the PodMic is perfect for those who want to earnestly dip their feet in the recording world without breaking the bank. Headphones You need to hear how you and your guests are being recorded in real time, and you need to gauge sound quality while editing your episodes. Thus, having a decent pair of headphones is important, especially if you plan on interviewing guests over video chat. Generally, over-the-ear

Jane Bradberry of Cincinnati, Ohio, is a former real estate agent who now works as a sales and marketing executive. During her real estate career, she dealt with some medical issues, which caused her to fall behind on some of her bills. Among these were her tax return filings and payments to the IRS dating back to 2008. Due to the nature of being in real estate, Jane was considered self- employed in the eyes of the IRS and, thus, did not have any taxes withheld from her earnings. In 2014, the IRS decided they were tired of Jane ignoring the many letters they sent her over the years in an attempt to collect tax and reconcile her tax situation. As a result, they decided to contact Jane’s bank and issue a bank levy against her. Unfortunately for Jane, she had recently collected a few large commission checks and was sitting on a lot of cash at the time. So, the IRS walked out of the bank having levied $32,873 of Jane’s money! Imagine the emotional roller coaster Jane experienced when she learned the IRS had just dipped into her bank account and taken $32,873. Yikes! Here is where this story gets better. In 2016, Jane decided to hire Toph to help her get some resolution and final closure on her tax situation. After doing an investigation of Jane’s IRS account activity, Toph uncovered that the IRS had erroneously calculated Jane’s tax liability and incorrectly levied her for the $32,873. After discovering this, Toph and Jane strategized

the various methods they could implement to fight back against the IRS and began putting them into action.

headphones like Audio-Technica’s ATH-M30x model, which run about $70, are a better choice than earbuds for their superior sound quality, noise isolation, and comfort. Editing Software When it comes to audio editing software, great options are freely available. For example, if you’re a Mac user, you likely already have access to GarageBand, a highly user-friendly program that comes with pre-installed, royalty-free jingles you can use to spice up your content. PC and Mac users alike should also consider Avid’s Pro Tools | First — a free version of the sound mixing software used to make Hollywood movies! Learning to use this free software will save you plenty of money you can reinvest into your hardware.

After going back and forth with the IRS for 10 months, the IRS finally agreed with Toph and Jane and sent her a refund check for $16,185! Additionally, and as of this publication, Jane has another $10,000 refund pending from the IRS. Stay tuned for an update on this in a future issue of Toph’s Tax Resolution Times.

P.S. As of this publication, Jane finally received her additional $10,000 in refunds and her case is officially closed! Congrats, Jane, and thanks for letting us help you get even!

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