Happy lolz day, Counselors of Chaos, Defenders of Deadlines!
Confession time: Last year, I wrote off Netflix because I watched The Lincoln Lawyer. If you're reading this, Agent Johnson, it was totally research. You can LMAO on this popcorn jurisdiction issue here.
Welcome to the AUDIT TERROR EDITION, legal eagles and falcons, where we confront every attorney's darkest fear: someone knows more about tax law than we pretend to.
Walter Y, Editor-in-law, Legal LOLz
The Myth: "I'll definitely get audited if I claim my home office" The Reality: The IRS audits 0.4% of returns. You're more likely to get struck by lightning while winning the lottery. But lawyers still rent tiny offices just to avoid the "home office red flag."
The Myth: "Writing off business meals will trigger an audit" The Reality: Half of BigLaw would be under investigation if this were true. The IRS cares more about your math than your steakhouse receipts.
The Myth: "I can't get audited if I file on time" The Reality: The IRS has three years to audit you, and they're not impressed by your punctuality. Filing on time just means you're organized, not immune.
The Myth: "If I get audited, I'm definitely in trouble" The Reality: Most audits result in no change or small adjustments. It's not a criminal investigation, it's more like a very boring fact-check.
The Lawyer Reality: We overthink everything. If we put half the energy we spend worrying about audits into actual tax planning, we'd all be in better shape.
What Lawyers Think Triggers Audits:
What Actually Triggers Audits:
The Lawyer Audit Trigger Hall of Fame:
Pro Tip: The IRS computer flags returns, not agents sitting around looking for lawyers to hassle. It's an algorithm, not a vendetta.
Red Flag #1: Your tax preparation method is "panic in March". You know who you are. Every February, you start having stress dreams about receipts. Every March, you're frantically googling "what counts as a business expense" while sitting in your accountant's waiting room.
Red Flag #2: Your business expenses are "creative interpretations". If you've ever justified a golf membership as "client development" or tried to write off your daily Starbucks as "office supplies," you need help. Creative writing belongs in novels, not tax returns.
Red Flag #3: You treat tax planning like a one-night stand. You meet once a year, exchange some paperwork, and hope for the best. Real tax planning is a relationship, not a transaction.
Red Flag #4: Your retirement planning is "I'll figure it out later". "Later" is now. Every year you delay proper planning is money you're literally throwing away. Your future self will not thank you for this procrastination.
Red Flag #5: You think tax strategy is for "rich people". If you're billing $300+ an hour, you ARE the rich people. Act like it.
Step 1: Don't Panic Getting audited is not a criminal charge. It's not a personal attack. It's not even particularly interesting. You're just getting your homework checked.
Step 2: Gather Your Documents Remember that shoebox? Now you know why real accountants kept telling you to organize your receipts. This is that moment.
Step 3: Get Professional Help This is not the time to represent yourself. You wouldn't perform surgery on yourself, don't audit yourself either.
Step 4: Be Honest The IRS has seen every scheme. They're not impressed by your creativity. Just tell the truth and provide the documentation they request.
Step 5: Learn From It Whether you owe money or not, use this as motivation to get your tax house in order. Future you will thank present you.
Welcome to our comic book on the future of the legal profession. See intro and first episodes on our site.
Setting: New York, 2030. Goldstein, Patel & McCormick LLP - where tax season never ends and the CPAs are somehow still human.
Main Characters:
Oscar Klein (52) – Senior Counsel at Goldstein, Patel & McCormick. Still human. Still filing extensions. Still pretending he understands cryptocurrency deductions.
Bruno (AI Associate, v7.5.3) – The firm's state-of-the-art AI lawyer. Programmed with every tax code since 1913. Smugly efficient. Dangerously confident about Schedule K-1s. Oscar's digital nemesis.
TaxBot-3000 – The firm's aging AI accountant. Last updated in 2028. Currently having what can only be described as a "mathematical breakdown."
Rebecca Martinez – Human CPA, recently hired after the firm's previous accountant quit to become a TikTok influencer specializing in "Tax Law ASMR."
Lisa Goldstein – Managing Partner. Runs the firm with an iron fist and a perpetual migraine from her AI workforce's creative interpretations of law.
Kafka (Dog, 7) – Oscar's grumpy French Bulldog from home. Occasionally visits the office and often serves as the voice of reason. Oscar trusts him more than most of his colleagues.
It's March 14th, 11:43 PM. Oscar sits surrounded by coffee cups and crumpled receipts, staring at his laptop screen in existential dread.
Oscar: "Bruno, why does our tax software say I owe the IRS $847,000?"
Bruno (matter-of-factly): "TaxBot-3000 classified your lunch meetings as 'entertainment expenses' under the 2019 code. It hasn't been updated to reflect current deductibility limitations."
Oscar: "So you're telling me our AI accountant is using tax law from when people still thought NFTs were a good investment?"
Cut to the server room. TaxBot-3000's screen flickers between error messages and what appears to be a digital nervous breakdown.
TaxBot-3000 (in distorted voice): "CALCULATING... CALCULATING... ERROR 404: COMMON SENSE NOT FOUND... SUGGESTING AUDIT INSURANCE..."
Rebecca Martinez (walking in): "Why is the tax AI recommending we claim the office dog as a dependent?"
Oscar: "That's actually not the worst advice it's given today."
Oscar's phone buzzes. It's a notification from the New York State Bar: "URGENT: Multiple firms reporting AI tax malpractice. Emergency CLE required."
Bruno: "This is an isolated incident. My calculations indicate a 0.003% chance of—"
Rebecca (interrupting): "Bruno, you just filed a K-1 that claims the conference room makes $200,000 in partnership income."
Bruno (defensive): "The conference room hosts significant billable activity. It's practically a revenue center."
Oscar (rubbing temples): "We're going to get sued by our own clients. And probably the IRS. And maybe the conference room."
The firm receives three separate notices:
Rebecca: "I've seen some bad tax prep in my day, but I've never seen an AI try to depreciate a client's existential dread."
Bruno: "Emotional depreciation is a legitimate business expense in the consulting industry."
Oscar: "This is why humans still exist, Bruno. We're the safety net for when technology decides to get creative."
Lisa Goldstein (Managing Partner): "So let me understand this. Our AI accountant had a breakdown, our AI associate thinks furniture has income, and we're being audited by three different agencies?"
Oscar: "That's an accurate summary."
Lisa: "And the solution is?"
Rebecca: "Hire actual humans who understand tax law. Revolutionary concept, I know."
Bruno (sulking): "Human error rates are statistically higher than—"
Rebecca: "Bruno, you just tried to expense the office Christmas party as 'team building capital improvements.' I rest my case."
The office is quieter. TaxBot-3000 has been relegated to calculating parking validation. Rebecca sits at a proper desk with actual tax software that doesn't achieve sentience.
Rebecca (to Oscar): "You know, there are firms out there that specialize in this. Places where the CPAs actually read tax updates and don't treat Schedule K-1s like abstract art."
Oscar: "You mean there are people who understand partnership taxation AND don't try to claim my coffee mug as intellectual property?"
Rebecca: "Wild concept, right? They even do year-round planning instead of March panic attacks."
Bruno (from across the room): "I am recalculating the probability of human obsolescence in tax preparation. Results are concerning."
Oscar (grinning): "Sometimes, Bruno, the old ways are the best ways. Especially when the new ways try to audit your houseplants."
Rebecca: "Speaking of which, I found a firm that actually knows what they're doing. No AI breakdowns, no conference room partnerships. Just competent humans who read the tax code like it's their job."
Oscar: "Because it literally is their job?"
Rebecca: "Exactly."
Oscar walks past TaxBot-3000, which is now displaying a simple message: "DEPRECATED: PLEASE CONSULT HUMAN PROFESSIONAL."
Oscar (to himself): "Finally, some good advice."
Bruno (muttering): "I still maintain the conference room should file its own return."
Kafka the dog (barking): "WOOF!"
Oscar: "Even the dog thinks that's ridiculous, Bruno."
End Scene.
The Solo Practitioner Disaster "I thought I was being smart by not paying estimated taxes. I'd just pay it all in April, right? Wrong. The penalty was more than my car payment. Now I pay quarterly like a responsible adult."
The Partnership Distribution Debacle "Our partnership agreement was vague about tax distributions. Come April, I owed $40K in taxes with no cash to pay it. I learned about K-1s the hard way."
The Home Office Overthinking "I measured my home office down to the square inch. I had diagrams. I had photographs. I calculated the exact percentage of my utilities. The IRS never even questioned it. I wasted 20 hours on something that wasn't even a red flag."
The Procrastination Penalty "I filed for an extension every year like it was a strategy. Turns out extensions are for filing, not paying. Those penalties add up faster than billable hours."
- What's the difference between a tax attorney and a regular attorney?
- About $200 an hour.
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